- Firm rejects verdict, mulls court action
Nigeria’s Securities and Exchange Commission disclosed on Friday that it has barred the Group Chief Executive Officer of Oando Plc, Wale Tinubu and his Deputy, Omemofe Boyo from being appointed directors of public companies for a period of five years.
The commission said the duo and the oil company committed, among other infractions, “false disclosure” and “mis-statements in financial statements”.
The commission therefore said it will refer “possible criminality to the appropriate criminal prosecuting authorities.”
SEC also directed the two to resign from the board of the oil company immediately.
The directors must be replaced through an extra-ordinary general meeting on or before July 1, 2019, the commission maintained.
The disciplinary actions followed the investigations of two petitions by the commission in 2017 about “certain infractions of securities and other relevant laws” perpetrated by Oando.
SEC said it engaged Deloitte & Touche to carry out a forensic audit of Oando’s books.
“The findings from the report 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,” SEC said in a statement published on its website on Friday.
Tinubu, Boyo and Oando are also expected to suffer monetary penalties and also refund ” improperly disbursed remuneration.”
The commission said it is confident that the implementation of punitive measures and introduction of some remedial measures will reduce “unwholesome practices by public companies.”
Meanwhile, operators on the nation’s bourse said the suspension of two directors of Oando Plc from public companies for five years 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 Securities and Exchange Commission (SEC) forensic audit of Oando Plc.
The SEC had in March 2018 announced the commencement of audit of Oando Plc’s account.
Commenting on the development, Mr Ambrose Omordion, the Chief Operating Officer, InvestData Ltd., said the suspension would send a signal to other managing directors and executives in the market.
Omordion said the outcome of the forensic audit showed that SEC could bite and not only bark.
He said 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 qouted companies and increase investors’ confidence,” Omordion said.
Malam Shehu Mikail, National President, Constance Shareholders Association of Nigeria, also expressed satisfaction at the commission’s decision.
Mikali said the ban would instill transparency and corporate governance in the nation’s capital market.
The shareholder activist said the outcome shows that nobody is above the law in the market.
He said some companies had collapsed due to lack of transparency and corporate governance.
But Tinubu promptly rejected the conclusion of the financial watchdog which barred him from directing public companies for five years over a series of financial infractions.
According to him, the company reserved the right to take legal action against the regulator – Security and Exchange Commission (SEC).
Oando Plc said on Friday that it would challenge the Securities and Exchange Commission (SEC) ruling on the outcome of its forensic audit.
The company made the disclosure in a statement issued in Lagos by its Head of Corporate Communications, Mrs Alero Balogun.
Balogun said the company would take all legal steps to protect its business and assets, while remaining committed to act in the interest of its shareholders.
“The company reserves the rights to take all legal steps to protect its business and assets whilst remaining committed to act in the best interest of all its shareholders,” she said.
Balogun, however, described as unsubstantiated, the commission’s call for resignation of affected board members of Oando Plc and convening of an extra-ordinary general meeting on or before July 1, 2019, to appoint new directors.
According to her, payment of monetary penalties by the company and affected individuals and directors, refund of improperly disbursed remuneration by the affected board members to the company are also unsubstantiated.
Balogun said the company’s attention had been drawn to a statement issued by the commission on Friday, barring its GCEO and DGCEO from being directors of public companies for a period of five years.
She said that Oando is of the view that the alleged infractions and penalties were unsubstantiated, ultra vires, invalid and calculated to prejudice the business of the company.
“The company 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,” she said.