Ordinary shareholders who still had some faith left in the management of Oando PLC are having a rethink as fresh battles face its management over the conclusion of the Securities and Exchange Commission’s (SEC) investigation on the company.
While a cross section of shareholders heaved a sigh of relief over the sale of their previously owned stock of the company, others who spoke with Platinum.ng stated that holding on to the stock will be bad investment as the market is bound to react negatively to the decisions the SEC has taken on Oando.
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With investors itching to dispose the stock and supply outweighing demand, share price of Oando Plc could significantly decline from the N4.20 it closed on Friday May 31, when trading opens on Monday, June 3rd.
The stock closed as Friday’s biggest loser with a 9.7% decline. It also currently has a negative year-to-date return of 16%.
The SEC had on Friday released a statement which noted that investigations into Oando revealed serious infractions such as “false disclosures, market abuses, misstatements in financial statements, internal control failures, and corporate governance lapses stemming from poor board oversight, 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.”
Following its findings, the SEC notified the public, barring Oando’s Group CEO, Wale Tinubu and Deputy Group Chief Executive Officer from being directors of public companies for 5 years, following conclusion of its investigation.
The SEC also directed the resignation of the affected Board members, and the convening of an Extra-Ordinary General Meeting on or before July 1, 2019, to appoint new directors.
The capital market apex regulator further 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, (ISA) 2007, the Commission said it would refer all issues with possible criminality to the appropriate criminal prosecuting authorities.
In addition, the SEC stated that other aspects of the findings would be referred to the Nigerian Stock Exchange (NSE), Federal Inland Revenue Service (FIRS), and the Corporate Affairs Commission (CAC).
These among others, are part of measures to address identified violations in the company, the SEC stated.
Meanwhile, Oando has challenged the SEC’s findings and decisions in a statement released to the press.
According to the statement from Oando, “these alleged infractions and penalties are unsubstantiated, ultra vires, invalid and calculated to prejudice the business of the Company.”
Oando claimed it has not been given the opportunity to see, review and respond to the forensic audit report and so is unable to ascertain what findings (if any) were made in relation to the alleged infractions and defend itself accordingly before the SEC.
“The Company reserves its rights to take all legal steps to protect its business and assets whilst remaining committed to act in the best interests of all its shareholders,” the oil and gas firm stated.