Court Stops SEC’s Removal of Oando’s Directors, Interim Management Team

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•Police lay siege to company’s headquarters
•Share price drops

Davidson Iriekpen, Goddy Egene and Peter Uzoho

The swirling crisis rocking Oando Plc took a new dimension yesterday as the Federal High Court sitting in Lagos, halted the decision by the Securities and Exchange Commission (SEC) to appoint an interim management team for the oil firm.

Also on the same day, a detachment of policemen laid siege to the Lagos head office of the oil and gas company to enforce SEC’s removal of the Group Chief Executive Officer, Mr. Wale Tinubu, and his deputy, Mr. Omamofe Boyo, that was announced last weekend.
The crisis took a toll on Oando’s share price on the Nigerian Stock Exchange (NSE) yesterday as it fell by 9.52 per cent to close lower at N3.80 per share. This was against the N4.65 per share it closed last Friday.

SEC, in the aftermath of the sacking of Tinubu and Boyo last Friday, had constituted an interim management headed by Mr. Mutiu Sunmonu, to oversee the affairs of Oando Plc and conduct an Extra Ordinary General Meeting on or before July 1, 2019.

The regulatory commission not only barred Tinubu and Boyo from holding director positions of public companies for a minimum of five years, it also ordered other directors of the company to resign their positions immediately.

But yesterday, following an ex-parte motion filed by Tinubu and Boyo, through their lawyer, Mr. Tayo Oyetibo (SAN), Justice Mojisola Olatoregun of the Federal High Court in Lagos ordered SEC and Sunmonu to maintain the status quo.

The judge said the order to maintain the status quo would remain pending the determination of the motion on notice.
She ordered that the order be served on the commission alone with the motion on notice, as well as other processes.

The judge directed the applicants to file an undertaking indemnifying the commission in case it later turns out that the orders ought not to have been made.
The judge adjourned the case till June 14 for further hearing.
The respondents in the suit are SEC and Sunmonu as the first and second respondents respectively.

Tinubu and Boyo had approached the court for an interim injunction restraining SEC, its servants, agents, employees or privies from taking any step concerning or acting on its decisions.

They said the decisions, as contained in SEC’s letter dated May 31, 2019, imposed a fine of N91,125,000 on Tinubu and barred he and Boyo from being directors of public companies for a period of five years.

They sought the suspension of the orders pending the hearing and determination of the applicants’ motion for interlocutory injunctions.

They also sought an order of interim injunction restraining Sunmonu from acting as the head of the interim management of Oando Plc pending the hearing and determination of their motion for interlocutory injunction.

The applicants asked for an order staying and or suspending the execution or the enforcement of SEC’s decision imposing a fine of N91,125,000.00 on Tinubu and barring he and Boyo from being directors of public companies for a period of five years, pending the hearing and determination of the motion for interlocutory injunction.

They equally asked the court for an interim injunction restraining SEC, its servants and its agents from directing, requesting any agency of government to act upon its decision contained in its letter dated May 31, 2019 pending the hearing and determination of their motion on notice.

Police Lay Siege

When THISDAY visited the company’s headquarters yesterday morning, it saw a detachment of armed policemen, who came in two patrol vans, guarding the entrance of the office complex.

It was also gathered that operations at the oil and gas company were shut down as Oando staff, who came to work in the morning, were not allowed to enter the office by the police. One of the security guards at the gate of the complex, who refused to disclose his identity, told THISDAY that the head office had been shut since morning.

“Oando is not open for work today. You can see the police there; they will not allow you to enter there. So, I advise you to leave now before they will harass you,” he said.

When asked who sent the police to the complex, the guard said he had no idea.
Also, when THISDAY asked one of the receptionists at the ground floor of the complex, who also refused to disclose her identity, she said: “Oando is not working today (yesterday). I don’t work for Oando; we came here this morning and discovered that they were not open for work. Their office has been shut since morning. I think that is why the police are here. They will not allow you to access their floor. The whole place is locked right now.”

SEC on Sunday constituted the Interim Management Team (IMT), headed by Sunmonu, to oversee the affairs of Oando Plc and conduct an Extra Ordinary General Meeting (EGM) on or before July 1, 2019.

Although other members of the IMT were not disclosed, SEC said in a statement that the team was to also appoint new directors to the board of Oando Plc, who would subsequently select a management team for the company.

The head of Oando Plc IMT was the Managing Director of Shell Petroleum Development Company of Nigeria Limited (SPDC), from 2004 to March 1, 2015.
In sacking Tinubu and Boyo, which led to the setting up of the interim management team, SEC had said the findings from a forensic report it ordered into the management of the company had revealed serious infractions.

It listed the infractions to include 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, and related party transactions not conducted at arm’s length, among others.

The development followed the conclusion of investigations into the activities of Oando Plc, following petitions from two shareholders of the company in 2017.
The commission said other aspects of the findings would be referred to the NSE, Federal Inland Revenue Service (FIRS) and the Corporate Affairs Commission (CAC) for necessary action.

Share Price Drops

In a statement by the company’s Chief Compliance Officer and Company Secretary, Mr. Ayotola Jagun, last night, it said Tinubu and Boyo, by the court interim orders, remain in charge.

Meanwhile, the share price of Oando Plc fell to N3.80 per share yesterday. Investors traded 27.145 million units of the stock valued at N103.269 million. Year-to-date, Oando Plc shares have suffered a decline of 24 per cent.

Market operators said the ruling by the SEC on the outcome of the forensic audit of activities of Oando sent mixed feelings among shareholders and other stakeholders.
Analysts at CSL Stockbrokers Limited, a Lagos-based financial advisory and research company, welcomed the action by SEC.

They expressed confidence in the newly appointed IMT.
An analyst said: “We believe his (Sunmonu) vast experience in the upstream oil and gas sector bodes well for Oando despite rumours of a close relationship between himself and the ousted Wale Tinubu. The interim management is charged with the responsibility of convening an extra-ordinary general meeting on or before July 1 2019 to vote new directors, who would subsequently select a new management for Oando.

“We view this development as positive for the equities market. In our opinion, the SEC’s hard stance on Oando provides confidence for the investment community that corporate malpractice offenders would be brought to book while ensuring public investments are safeguarded. Though we expect a series of legal battles to ensue as Wale Tinubu has promised to contest his removal, we believe he has a very slim chance of winning any suit filed by him, considering the depth and rigour of the forensic audit.”