James Emejo in Abuja
The House of Representatives Committee on Capital Market and Other Institutions on Tuesday handed a two-week ultimatum to the Securities and Exchange Commission (SEC) to resolve the impasse with Oando shareholders.
The meeting which was attended by the management team of SEC, was held behind closed doors.
The Deputy Chairman of the committee, Hon. Â Tony Nwulu, who chaired the meeting, threatened to conduct an investigative public hearing should the commission fail to resolve and reconcile the parties within the timeline.
Shareholders partly blame the problem on regulatory lapses by SEC and the Financial Reporting Council of Nigeria for turning a blind eye to alleged lax corporate governance in the capital market.
They, however, Â expressed optimism that the intervention by the legislature would resolve the impasse.
A shareholder said: â€œThe strict timeline that the committee has given for the enquiry to be concluded is another positive as this case has dragged on for nearly five months and played out in the media for three months, in that time Oando shareholders have seen a significant loss in the value of their shares. The lawmakers must be applauded for intervening.
â€œWe are very hopeful that this new development will help resolve the issue in favor of all shareholders of the company, as we all want to see a conclusion that is in the interests of both we the shareholders and the future of the company.â€
The President of Rennaisance Stakeholders Association of Nigeria, Olufemi Timothy, who brought a six-page petition against Oando, alleged flagrant disregard for corporate governance and insider abuse.
He said: â€œThe group has negative working capital of over N263 billion consequence of current liabilities above, lighter than current assets, meaning that the management was unable to service its obligations financially.
â€œClaim of creditors is higher than the owners, shareholders equity, meaning thatÂ the Â groupÂ could beÂ liquidated by the creditors anytime if urgent action is notÂ taken.
â€œWith accumulated losses of over N159 billion, shareholders could not get a dime as cash dividend.Â No hope of redeeming these reserved losses.
â€œCourt cases as projected by the management may take claims of over N608 billion which is for greater the assets of the entire group, meaning that the group is at a very high risk of liquidation if the court cases against the company succeeds.
â€œCost of litigations is very high.Â Litigation has damaging consequence on our companyâ€™s reputational risk under the current management. Management was increasing entitlements, remunerations despite lack of working capital.
â€œBoth current liabilities and long term liabilities stood at over N799 billion. Management wasÂ selling Â assetsÂ of the company, especially money-spinning assets such as downstream (Marketing) business without meaningful improvement in debts situation.Â It was planning to sell its share in OER which unfortunately is the last asset belonging to the company,â€ the petition read in part.
The shareholders called on the House to â€œas a matter of urgency save our investment in OandoÂ Plc, look into these matters, cause an action to intervene in OandoÂ PlcÂ by ordering/remove the present management, to vacate office, allowing for proper investigation of the corporate governance abuses, financial mismanagement as noticed in the published full year audited financially statement.â€