SEC to Resume Oando Forensic Audit from Wednesday

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Kemi Adeosun, Finance Minister

• House seeks Gwarzo’s reinstatement pending investigation

James Emejo in Abuja

In a nod to the U-turn made by the Minister of Finance, Mrs Kemi Adeosun, to allow the forensic audit into the activities of Oando Plc to go ahead, the Securities and Exchange Commission (SEC) Tuesday said that the audit will resume from Wednesday in the company’s office.

SEC in a terse statement reiterated its commitment to go ahead with the forensic audit, saying: “This commitment is contained in a letter dated December 5, 2017, addressed to Oando Plc.”
The commission also assured the general public of its zero tolerance to infractions in the Nigerian capital market.

The letter, which was signed by the acting Director-General of SEC, Dr. Abdul Zubair, said the forensic auditors would be at the premises of Oando from Wednesday to undertake the audit.
Zubair was appointed by the federal government last Thursday, following the suspension of the DG of SEC, Mounir Gwarzo, the day before.

The Letter titled, “Re: Forensic Audit into the Affairs of Oando Plc,” read: “Further to our letter to you dated November 27, 2017 and another letter to your lawyers dated November 28, 2017, wherein the Commission had notified Oando Plc of its decision to go ahead with the Forensic Audit, the Commission in the light of recent developments wishes to reiterate the following:

• That the Commission is aware that Suit No: FHC/L/CS/1601/17: OANDO PLC V. SEC & ANOR was struck out on November 23, 2017 by his Lordship Hon. Justice Aikawa of the Lagos Division of the Federal High Court.

• That the Commission is not aware of the existence of any valid or subsisting Order of Court restraining the Commission from proceeding with the Forensic Audit.

“While we acknowledge that a Notice of Appeal has been filed to challenge the judgment of the Federal High Court, this notice does not serve as an Order of Court restraining the Commission from conducting the exercise.

“We wish to restate that our forensic auditors had been directed to commence work since November 27, 2017 and as a result shall be at your premises on any date from Wednesday, December 6, 2017.
“Kindly accord them the necessary assistance.”

But prior to SEC’s announcement Tuesday, its attempt to resume the forensic audit was interfered with by Adeosun last week, when she ordered Gwarzo to discontinue the audit, which he objected to.

Gwarzo’s refusal and subsequent letter that she put her verbal instruction in writing, in her capacity as the chairman of the board of SEC, led to his suspension exactly 48 hours after her meeting with him and 24 hours after being in receipt of his letter.
In announcing his suspension, Adeosun said Gwarzo had been asked to step aside to make room for a probe into allegations of financial impropriety levelled against him.

The forensic audit of Oando followed two petitions SEC received from a concerned shareholder, Dahiru Mangal, and an indirect shareholder, Ansbury Incorporated, over alleged mismanagement of the company’s financial affairs and distortion of its shareholding structure.
Following the petition, SEC said it conducted a comprehensive review, which revealed massive breaches of the provisions of the Investments & Securities Act and the SEC Code of Corporate Governance for Public Companies.

Consequently, the commission announced the appointment of a consortium of experts, consisting of auditors, lawyers, stockbrokers and registrars, to conduct the forensic audit, while the shares of Oando the Nigerian Stock Exchange (NSE) were placed on a technical suspension.
But even as SEC said the forensic audit on Oando would go ahead, the House of Representatives Tuesday passed a resolution directing the minister to reinstate the suspended SEC boss.

The House, in a motion, moved under matters of urgent public importance by Hon. Diri Douye (PDP, Bayelsa) on the need to intervene in the conflict between Adeosun and Gwarzo, directed its Committee on Capital Market and Institutions to probe the allegations and report to the House within two weeks.
It also directed all parties to maintain the status quo, pending the outcome of the investigation by the House.

It remains to be seen whether the House resolution is heeded, given that government agencies have a penchant for disregarding parliamentary motions that don’t have the backing of law, and given that an acting director-general has been appointed to superintend the commission, pending the findings of the administrative panel of inquiry set up by the minister to probe Gwarzo for alleged financial impropriety.
The House noted that the conflict between Adeosun and Gwarzo arose over the Oando forensic audit and the allegations of financial impropriety levelled against the latter.

It further noted that the conflict appeared to have been lingering for several months but was only brought to public light as a result of the disagreement on the Oando forensic audit.
Douye said there were further allegations of interference by the Ministry of Finance in the discharge of SEC’s mandate, particularly in the area of the Oando forensic audit, which he noted was largely the basis for Gwarzo’s suspension.

He said the intervention of the House was critical in putting the matter in proper perspective and the amicable resolution of the conflict in order to protect the image of the commission in the interest of both local and foreign investors.
He argued that neglecting the issues arising from the Oando forensic audit could have dire implications for the capital market going forward.

Also contributing to the debate, Hon. Tobi Okechukwu (PDP, Enugu) recalled the incident in the 7th Assembly when the House intervened in the probe of the near collapse of the capital market.
He said the suspension of Gwarzo had raised questions begging for answers.
He wondered why the alleged infraction by Oando should be swept under the carpet, adding that “Nigerians will want to know how the company has been run”.

According to him, a comprehensive inquiry was required to get to the root of the matter and queried why Adeosun did not allow the Oando forensic audit to go ahead?
Hon. Ahmad Babba Kaita (APC, Katsina) said it was worrisome that after the court had ruled against Oando, the minister still went ahead to suspend Gwarzo over the forensic audit of the company.
He warned that sweeping the alleged infractions committed by Oando under the carpet has the potential to eroding the confidence of both local and foreign investors in the capital market and the economy at large.

Hon. Karimi Sunday (PDP, Kogi) said the whole issue bordered on attempts by some highly placed people, who he did not name, to cover up the alleged fraud perpetrated by Oando.
He expressed concern that Gwarzo was suspended while doing his job, adding that he should be reinstated while the matter is investigated.

After debating the matter, the House passed the motion unanimously directing the finance minister to reinstate the suspended SEC DG, pending the investigation of all the issues pertaining to the Oando forensic audit and the allegations of financial impropriety levelled against him.

  • John Paul

    The SEC should not be playing politics. Their Forensic Audit should not only be on OANDO.

    They should also conduct a Forensic Audit on Union Homes Plc, Dunlop aka DN Tyres and many other public companies that are not in compliance with SEC rules and their obligation to their shareholders

    Did the SEC not grant approval for Aso Savings and Loans Plc to purchase Union Homes Savings and Loans Plc, under the pretext that Aso Savings and Loans Plc will inject billions into Union Homes. Which led to the shares of the original shareholders of Union Homes to be watered to one (1) share for every forty (40) shares owned. Only for Aso Homes to fail to inject the amount that SEC guaranteed that they were going to inject in Union Homes

    The SEC is becoming incompetent. They need more competent hands

  • Ekun

    Wale Tinubu, after the forensic exam by SEC and the completion of court case against Oando, should be punished by the SEC and the federal govt. He should never sit on the board and managed a public coy in Nigeria for 30 years also he should never be considered or appointed to head or work in any public agency in all ties of the govt for 50years.

    Oando manipulation of its books is a classic case of enron /world com fraud in the states in the early 2000s. The management was paying dividend from unrealized profits.

    In a civil country with respect for rule of law. A CEO 9 times out of 10 is fired from its post when the price of coy shares price decrease. What is the excuse of Wale for still occupying that seat after 2 yeas of share price decrease and decrease market capitalization of the coy.

  • bashkano

    With the lost of huge investments incurred by the shareholders of Oando and the need to investigate the circumstances surrounding the loss why is the Minister trying to play a role that is full of suspicious undertones. We have lost our money and attempts are being made to find a way out of the quagmire and the Minister is trying to be a cog in the wheel of progress. For goodness sake, Madam, please do not politicise this vital issue and let the forensic auditing continue.

  • John650

    If Wale Tinubu and his cohorts at Oando have nothing to hide, why are they affraid of a forensic audit?

    I just hope the SEC does a good job and don’t get sidelined by politicians like the dishonourable minister has been attempting to do. I thought this Finance Minister grew up and schooled in England where they adhere to the rule of law. It is a shame that she has already been corrupted by our people. Her integrity is going to the dogs.

  • Naija United

    Nobody cares about the damage to the economy / loss of confidence in the capital market and big time losses which hundreds of thousands of OANDO shareholders have suffered since Wale Tinubu took over the company. The OANDO i bought at N82 is today trading at paltry N5 with no tangible dividend within 8 years i have held the shares and someone is trying to cover up this open robery. The Billion Naira fraud and mismanagement going on at OANDO is horrendous and affects many families and institutions, but Adeosun and co-travellers are only interested in pursuing vendetta against SEC DG who dares to open OANDO can of worms and stop the 419 going on there. We are also not ignorant of the minister & Buhari’s attempt to placate the Tinubus by initial attempt to stop the probe in order to gain BAT support during 2019 elections. But if you say you are fighting corruption why should fraud and looting of shareholders funds at OANDO be swept under the carpet?

    • Fula

      All you have noted above are shareholder issues. The abuse of corporate governance in publicly quoted coys is alarming to say the least. The house should not limit itself to just the Oando plc matter. Let them expand the scope of their investigation.

  • Daniel Obior

    Great news. A white washed report can now be guaranteed. Why would Gwazo be allowed to spoil the Oando ‘ariya’ (enjoyment), which a juju music artist says has no end? There are sure some smart elements in this incompetent government that know how to get what they want and when they want it. How else can the APC of incompatible bedfellows be otherwise explained? Tiwa n’tiwa o jare (what is our is sure ours).