The embattled management of Oando Plc has accused the Securities and Exchange Commission (SEC) of not giving the company fair hearing before dissolving its board of directors and appointing an interim management to oversee its operations. In its complaints to SEC, Oando claimed that the industry regulator did not give its management fair hearing in arriving at the decision. SEC had said that following the receipt of two petitions by the commission in 2017, investigations were conducted into the activities of Oando (a company listed on the Nigerian and Johannesburg Stock Exchanges). The regulator said that certain infractions of securities and other relevant laws were observed. The commission added that it further engaged Deloitte & Touche to conduct a forensic audit on the activities of Oando.
But in its reaction yesterday, Oando called on SEC for more engagements on the matter. In a press statement issued on its website, the oil firm said that “Oando is of the view that these alleged infractions and penalties are unsubstantiated, ultra vires, invalid and calculated to prejudice the business of the company. The company has not been given the opportunity to see, review and respond to the forensic audit report and so is unable to ascertain what findings (if any) were made in relation to the alleged infractions and defend itself accordingly before the SEC.
“The company reserves its rights to take all legal steps to protect its business and assets whilst remaining committed to act in the best interests of all its shareholders. The severity of the penalties and the timing of the release have roused public curiosity as to the motive and the basis for the penalties,” it said.
Also, at a press conference in Lagos, the chief operating officer, Oando Energy Resource, Dr. Alex Irune, said: “We were not given a chance to review and respond to the outcome of the report. You do not sentence a person to death without giving him or her the chance to defend himself or herself. In this instance we have been sentenced to death without knowing what our crime is or being given a chance to defend ourselves.
At the barest minimum, best practice requires that you give the person a chance of a fair hearing. We have not been accorded this opportunity.” Irune explained that when the company made the decision to drop its court case challenging the SEC’s decision to carry out a forensic audit, it was assured that they could trust the system for an independent investigation that would be fair and follow due process.
He reiterated that it was in the spirit of transparency, cooperation and full disclosure that they agreed to the forensic audit. “Echoes of Oando’s sentiments are resounding across the country with everyone wanting to know what exactly have the Oando management team done to warrant such steep penalties,” he said.
A source at Oando claimed the forensic audit report was ready and submitted by Deloitte & Touche as far back as December 2018 and queried why SEC decided to sit on it for six months without engaging the company where necessary.
According to the source, “it also brings to mind the famous quote: ‘power corrupts, but absolute power corrupts absolutely’. Is this a case of abuse of power, or has someone been put under duress to release the report without any regard for due process? What are the details of the infractions as opposed to a summary and what are the associated penalties for each infraction according to the SEC rule book?”
On the damage done to the brand since the inception of the investigation, the chief finance officer of Oando, Olufemi Adeyemo said: “The damage cannot be quantified. We require credit to run our business and this has come at an extra cost, one that we would ordinarily not have incurred.
“Despite these challenges, we have kept making milestones and running the business as usual. “As a nation, we must align our operations with global standards and like the developed world be deliberate in building homegrown businesses as opposed to tearing them down,” he said. The company noted that “businesses such as Oando have contributed immensely to boosting the Nigerian capital market index since its inception as well as attracting foreign direct investments (FDIs) into the country. “The company’s contribution to the economy under the leadership of the said management which has been advised to resign cannot be overlooked,’’ it said. However, SEC said that as the apex regulator of the Nigerian capital market, it maintains its zero tolerance for market infractions and reiterated its commitment to ensuring the “fairness, integrity, efficiency and transparency of the securities market thereby strengthening investor protection.”