Court Nullifies SEC’s Suspension of Oando’s AGM

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By Obinna Chima

A high court at the Federal Capital Territory yesterday nullified Security and Exchange Commission’s (SEC) indefinite suspension of Oando Plc’s Annual General Meeting (AGM), two years ago, ruling that shareholders of the company have the rights of association as well as to assemble and hold an AGM.

The judgment followed a suit filed by Mr. Patrick Ajudua, an Oando shareholder, who challenged SEC’s suspension order.

The disgruntled shareholder had filed that the directive of the SEC suspending Oando’s AGM was in breach of his rights to freedom of association as guaranteed under Section 40 of the Nigerian Constitution and Articles 9, 10 & 11 of the African Charter on Human and Peoples Rights.

A statement by the company stated that Ajudua has since been hailed as a saviour of Oando’s shareholders following his big win.

In a hearing presided by Justice O. A Musa, all pleadings filed were granted in favour of Ajudua.

Justice Musa ordered: “[Mr.] Patrick as a member and shareholder of Oando has a right and freedom of association and assembly with other shareholders and right to receive information at the AGM; [and I] declared the May 31, 2019 letter of SEC to Oando sanctioning its management, as unconstitutional, null and void, and violation of Engr. Patrick’s fundamental right to fair hearing and his human right to receive information on the affairs of Oando and his interest and shares in Oando.”

In addition, the judge declared an order, “setting aside the directive of SEC suspending/postponing indefinitely the AGM of Oando in violation, breach and contravention of Patrick’s right and freedom of association and assembly with other shareholders and right to information from other shareholders and Oando Plc, an order restraining SEC and Oando from interfering with, disrupting and or interfering with the Engr. Patrick’s constitutional right of association, assembly and right to receive information from other shareholders and members of Oando Plc at the postponed 2019 AGM.”

Furthermore, the judge ruled that, “an order of injunction restraining SEC from acting and /or taking any steps pursuant to its letter of 31st May 2019 or interfering in any manner whatsoever with Directors lawfully appointed by the Engr. Patrick and shareholder; and an order directing Oando to convene and hold AGM of Oando plc within 90 days of the order of the Court in compliance with the provisions of CAMA.”

AGM’s are an important platform for the protection of the shareholders of a company. They are also a legal requirement for all publicly listed companies the world over. Usually the main agendas for an AGM include a review of a company’s affairs and financial statements, shareholder engagement with Directors of the company to review performance, the appointment of auditors, to name a few.

By being listed on the Nigerian Stock Exchange (NSE) a company is by virtue owned by her shareholders, thus ultimate control and the destiny of a company should lie in the hands of said shareholders. Section 81 of the Companies & Allied Matters Act ascribes to every member of an incorporated company, who has fully paid for his or her shares, a right to attend all the shareholders’ meetings of such a company; and to speak and vote at such shareholders’ meetings.

According to Ajudua, SEC denied him these rights over the last two years.

Commenting on the outcome of the suit, Ajudua said: “A win for me is a win for all shareholders. The lingering delay in resolution of the conflict have brought untold hardship, financial difficulty & loss of capital appreciation on our investment.

“Therefore, the shareholders received this judgment with high sense of humility & praying that all hands must be on deck to move the company forward. We plead with the regulators & others to give peace a chance & allow for harmonious resolution of the conflict. The shareholder community will continue to protect their investment, ensure high compliance with code of corporate governance & ensure integrity of company operating in the capital market.”
Since the suspension of Oando’s 2019 AGM shareholders have been kept in the dark on the company’s affairs – specifically corporate initiatives and financials.

According to a July 2020 statement issued by Oando, the suspension of the AGM had also resulted in the inability of the company’s Directors to lay before the shareholders for approval, the Company’s 2018 Audited Financial Statements; inability to appoint auditors to hold office for the 2019 financial year; and the inability of the Company to meet its FYE 2019 NSE Filing of Accounts obligation due date of March 31, 2020; amongst others.

The 2019 suspension of Oando’s AGM by SEC was not the first time as the regulator had in 2018, taken same actions but the oil and gas company had fought back and the suspension was dropped, and the AGM held then without a glitch.