The shares of Oando Plc rose 10 per cent yesterday on the first full trading day after the Nigerian Stock Exchange (NSE) lifted the 176 days technical suspension placed on the stock. The appreciation in the share price, which was due to high demand by investors, came just as the Securities and Exchange Commission (SEC) explained that the prolonged suspension was because there were lawsuits initiated by parties against the planned forensic audit of the company.
The SEC, in a statement, said: “Share of Oando Plc were placed on technical suspension in October 2017 upon the announcement of forensic audit which aimed to protect investors as a short term measure. Suspensions are typically intended for a short period to ensure market stability and thereafter lifted to allow market dictates.â€
“However, the suspension of the shares of Oando Plc was prolonged due to several litigations by Oando and other shareholders contesting the propriety of the forensic audit and technical suspension. All litigations have now been withdrawn, the independent forensic audit by Deloitte is ongoing and the preliminary result is expected.”
NSE had initially lifted the suspension on Wednesday based on a request SEC but later re-imposed the suspension on same day.
Explaining the reversal, the NSE said subsequent to the lifting of the technical suspension, on 11 April 2018, it received another communication from SEC to maintain the status quo prior to the Commissionâ€™s letter of 9 April 2018, (the technical suspension of trading in Oandoâ€™s shares.)
â€œIn the overall interest of investors in Nigeriaâ€™s capital markets, and following consultation with the Commission please be advised that at the start of trading tomorrow(Thursday), 12 April 2018, trading in Oandoâ€™s shares will resume without any impediment in price movement consistent with the NSEâ€™s market structure.
And when trading resumed, the stock recorded the highest price rise of 10 per cent, from N5.99 to close at N6.60 per share.
Reacting to the development, the company said lifting of the technical suspension is good news all its stakeholders and will restore and boost investor confidence in the market.
According to the Chief Compliance Officer and Company Secretary, Oando Plc, Ms. Ayotola Jagun, â€œOn day one, 178 million Oando shares were on bid with only 5.5 million available for sale. The companyâ€™s share price hit the NSE daily price ceiling of 10 per cent by 10.45 a.m further evidence that there is a lot of interest in Oando shares and that the general mood around the market and our shares is positive.â€