The Securities and Exchange Commission (SEC) yesterday ordered the immediate suspension of trading on the shares of oil marketing firm, Oando Plc., on the floor of the Nigerian Stock Exchange (NSE) till tomorrow when they could go on technical suspension pending the outcome of an investigation into an allegation of corporate governance abuse levelled against some directors of the company.
The suspension order was to protect investors against dwindling share value while the forensic audit lasts. The order, in a circular yesterday in Abuja, explained that the action followed the outcome of two petitions from Alhaji Dahiru Barau Mangal and Ansbury Incorporated.
“The commission carried out a comprehensive review of the petitions and made the following findings amongst others: Breach of the provisions of the Investments & Securities Act 2007 for Public Companies Suspected insider Dealing Related party as well as transactions not conducted at arm’s length; discrepancies in the shareholding structure of Oando Plc. e.t.c.,”the document reads.
It noted that SEC was to regulate the market and protect the investing public. Accordingly, it said the findings were weighty and, therefore, need to be further investigated, hence a forensic audit of Oando Plc.
SEC went on: “This is pursuant to the statutory duties of the commission as provided in Section 13(k), (n), (r) and (a) of the ISA 2017. To ensure the independence and transparency of the exercise, the forensic audit shall be conducted by a consortium of experts made up of auditors, lawyers, stockbrokers and registrars. To further ensure that the interest of all shareholders of Oando Plc. are preserved during the course of the exercise, the commission directed the NSE to place the shares of the company on technical suspension.”
The commission, however, explained that it was not technologically feasible for the bourse to effect a technical suspension earlier than 48 hours.
It noted: “Effective for 48 hours from today (yesterday), October 18 to 20, 2017, the Nigerian Stock Exchange should implement a full suspension in the trading of the shares of Oando Plc. and from October 20, the exchange should implement a technical suspension on the shares of the company.”
However, shareholders have welcomed the move, saying it would protect investors from incurring further losses.
Specifically, the president, Constance Shareholders Association of Nigeria, Shehu Mallam Mikail, said the audit would enable shareholders to ascertain the real state of the company and afford investors to make informed decisions.
He stressed the need for the regulator to employ the services of professionals to ensure a high level of corporate governance.
“The audit should be handled by professionals and first-class auditing firms with high level of corporate governance to enable investors make informed investment decisions. The management should be asked to step,” Mikail stated.
To the president, Progressive Shareholders Association, Boniface Okezie, the development would “give room for thorough investigation and help investors not to suffer more losses.”