Oando has taken the Nigerian Stock Exchange and Securities and Exchange Commission to court and has secured an injunction to stop the suspension placed on trading of its shares and the planned forensic audit of its account by Nigerian Capital Market regulatory authorities. Oando Plc shares were placed on technical suspension at N5.99 pending the outcome of the investigation to be conducted on the company by SEC. It will be recalled that the Nigerian Stock Exchange took the action after the Securities and Exchange Commission (SEC) ordered a forensic audit of Oando’s operations.
The SEC suspended trading in the stock saying it was investigating complaints of insider trading abuse and discrepancies in its ownership structure. “The actions taken by the SEC, the suspension of the shares of the company and the initiation of a forensic audit, are prejudicial to the company,” an Oando spokesman told Reuters. The company recorded no trades on Monday. A regulatory source said the freeze aimed to avoid volatile trading pending the outcome of the audit.
In a SEC letter dated October 17 to Oando the regulator accused Oando of corporate governance abuses and financial mismanagement, basing its allegations on two petitions received from Dahiru Barau Mangal and Ansbury Incorporated. It added that it would engage accountancy firm Deloitte to lead the audit together with lawyers and stockbrokers, at a cost of 160 million naira, which would be borne by Oando.
A company source has said the petitions centred around the ownership of some Oando shares bought through an investment vehicle at the time the company bought the Nigerian unit of U.S. firm ConocoPhillips for $1.65 billion in 2014. Oando has said it was aware the regulator had received petitions and said the allegations were “unsubstantiated, misleading and defamatory”.
However, it had not received any notification from the regulator querying its compliance until the recent letter, adding that it has been cooperating with the SEC since the start of its investigation in May. In July, Oando shares fell close to a one-month low after the regulator said it was investigating the firm’s shareholding structure following the ConocoPhillips unit acquisition. Trading in Oando’s shares have also been suspended in Johannesburg, where it has a secondary listing. Oando has gained 27 percent this year after a sharp fall last year. It last traded at N5.99.
