Oando saga: SEC slams five years ban on Tinubu; Operators say suspension will bring sanity

By Chinyere Joel-Nwokeoma

Lagos, May 31, 2019

After over a year of forensic audit, the Securities and Exchange Commission (SEC) has concluded investigation of Oando Plc and barred the Group Chief Executive Officer, Mr Wale Tinubu , from being a director of a public company  for five years.

In a statement signed by its Head of Corporate Communications,  Mrs Efe Ebola, SEC said it also barred Oando’s Deputy Group Chief Executive Officer (DGCEO) from being a director of a public company for five years.

The DGCEO is Mr Omamofe Boyo.

The News Agency of Nigeria (NAN) reports that SEC in March 2018 announced the commencement of audit of Oando’s  account.

The commission said that it appointed Deloite Nigeria to proceed with the forensic audit.

In the statement, the commission also directed resignation of the affected board members,  and called on the company to convene an extra-ordinary general meeting on or before July 1, to appoint new directors.

The commission said that these and others were part of measures to address identified violations in the company.

“Following the receipt of two petitions by the commission in 2017, investigations were conducted into the activities of Oando Plc (a company listed on the Nigerian and Johannesburg Stock Exchanges).

“Certain infractions of securities and other relevant laws were observed.

”The commission further engaged Deloitte & Touche to conduct a forensic audit of the activities of Oando Plc.

“The general public is hereby notified of the conclusion of the investigations of Oando Plc,” it said.

According to SEC, findings from the audit revealed infractions such as false disclosures, market abuses, misstatements in financial statements, internal control failures and corporate governance lapses stemming from poor board oversight, among others things.

It  added that the forensic audit showed irregular approval of directors’ remuneration, unjustified disbursements to directors and management of the company, related party transactions not conducted at arm’s length, amongst others.

The SEC also directed the payment of monetary penalties by the company and affected individuals and directors, and refund of improperly disbursed remuneration by the affected board members to the company.

As required under Section 304 of the Investments and Securities Act, 2007, the commission said it would refer all issues with possible criminality to the appropriate prosecuting authorities.

The commission said that other aspects of the findings would be referred to the Nigerian Stock Exchange, Federal Inland Revenue Service and the Corporate Affairs Commission.

“The commission is confident that with the implementation of the above directives and introduction of some remedial measures, such unwholesome practices by public companies would be significantly reduced.

“Therefore, in line with the Federal Government’s resolve to build strong institutions, boards of public companies are enjoined to properly perform their  duties as required under extant securities laws,” it said.

It said that SEC, as the apex regulator of the Nigerian capital market, would maintain zero tolerance to market infractions.

It also reiterated commitment to ensuring fairness, integrity, efficiency and transparency of the securities market, thereby strengthening investor protection.

Meanwhile, operators on the nation’s bourse on Friday said that the suspension of the two directors would bring sanity to the capital market.

They spoke with the News Agency of Nigeria (NAN) in Lagos in reaction to the outcome of the SEC forensic audit.

Commenting on the development, Mr Ambrose Omordion, the Chief Operating Officer, InvestData Ltd., said that the suspension would send a signal to other managing directors and executives in the market.

Omordion said that the outcome of the forensic audit showed that SEC could bite and not only bark.

He said that the investing public had been calling for change in the company’s management for a long time.

According to Omordion, there will be sanity in the company when the new management takes over in July.

“Other companies and their directors will sit up, seeing how Oando management and its directors ended up.

“SEC decision will further boost corporate governance and transparency in quoted companies and  increase investors’ confidence,” Omordion told NAN.

Malam Shehu Mikail, National President, Constance Shareholders Association of Nigeria, also expressed satisfaction at the commission’s decision.

Mikali said that the ban would instill transparency and corporate governance in the nation’s capital market.

The shareholder activist said that the outcome showed that nobody was above the law in the market.

He said that some companies had collapsed due to lack of transparency and corporate governance.