Economy
Full Details of SEC Investigation into Oando Affairs
By Modupe Gbadeyanka
Business Post has seen details of an investigation carried by the Securities and Exchange Commission (SEC) on affairs in Oando Plc over petitions filed against the energy firm alleging gross financial misconduct.
In a letter dated October 17, 2017, and sent to the Group Chief Executive Officer of Oando Plc, Mr Adewale Tinubu, a copy seen by Business Post, the capital market regulator said Oando Plc violated different laid down rules and even misinformed the investing public on its actions.
The letter, signed on behalf of the Director-General of SEC, Mr Mounir Gwarzo, by the Head of Legal Department at the agency, Mrs Braimoh Anastasia, said after its investigation, it found out that Alhaji Dahiru Barau Mangal is a shareholder of Oando Plc, while the second petitioner, Ansbury Incorporated, is only a whistleblower.
The letter titled RE: SERIOUS CONCERN TO CORPORATE GOVERNANCE EXISTENCE. GROSS ABUSE OF CORPORATE GOVERNANCE AND FINANCIAL MISMANAGEMENT IN OANDO PLC said it was discovered that the Corporate Governance return submitted by Oando for the period ended December 31, 2016, the remunerations of the Group Chief Executive Officer (GCEO) and the Deputy GCEO were approved by the Board, while the CCEO was responsible for fixing the remuneration of other Executive Directors, which it said violates Part B, 14.3 of the SEC Code of Corporate Governance.
Also, SEC said it found out that the last Board evaluation of Oando Plc was done by KPMG in 2012, a violation of Part B, 15.1 of the SEC Code of Corporate Governance.
The letter stated that Oando is invited to note the violations and henceforth ensure compliance with the SEC Code of Corporate Governance.
According to the letter, SEC said the disposal of Oando Exploration Production Limited (OEPL) to Green Park Management Limited in 2013 was done without the prior approval of the Commission, which violates ISA 2007.
Furthermore, the agency noted that “following the structuring of the OEPL transaction in contravention of the ISA 2007, Oando Plc recorded a profit of about N6 billion from the sale of OEPL that erased the operating loss of N4.68 billion leading to a profit of N1.4 billion for the year 2013.
“The company subsequently declared dividends from the profit. Having admitted that the action was in breach of the ISA 2007, Oando Plc restated its 2013 & 2014 Audited Financial Statements which contained material false and misleading information contrary to Section 60(2) of the ISA 2007.”
SEC further stated in the letter that “the 2014 Rights Issue Circular of Oando Plc contained information relating to the profit reported by Oando Plc in 2013 arising from the sale of OEPL.
“Consequently, the said Rights issue circular contained material misleading information. This action amounts to a violation as contained in Section 85(1), 86(1) and 87(1) of the ISA 2007.”
The capital market regulator stated that Oando breached its Rules and Regulations on Payment of Dividends by remitting in 2014, dividends to the Registrar in piecemeal in violation of Rule 44 (1) of the SEC Rules and Regulations.
“The Commission notes the Report of the Independent Auditors of Oando Plc, Ernst & Young, which is contained on Pages 63-68 of the 2016 Annual Reports & Accounts of Oando Plc, more particularly in Paragraph 1 of Page 64 where the independent auditors reported the going concern status of the Company.
“The Commission observed that certain persons classified as insiders within the provisions of Section 315 of The Investment and Securities Act (ISA), 2007 and who were in possession of confidential price sensitive information not generally available to the public, had between January-October 2015 traded on Oando Plc shares prior to the release of the company’s 2Ol4 Financial Statement, where the company reported a loss of N183 billion.
“On the allegation of insider dealing made by Oando Plc against Alhaji Dahiru Mangal, although investigation was initiated by the Commission, the attention of the Commission was drawn to a letter dated September 21, 2017 from Oando Plc, informing it that a suit had been filed in court in that regard, and that the matter was now sub-judice.”
“The Commission identified certain related party transactions and observed that they were not conducted on arm‘s length
“The Committee noted that Oando Plc declared dividends in 2013 and 2Ol4 from unrealized profits.
“The Commission observed discrepancies in the shareholding structure of Oando Plc. While Alhaji Mangal’s status as a shareholder in Oando Plc is not in contention or dispute, the exact units of shares held by him requires reconciliation.
“The Commission‘s primary role as the apex regulator of The Nigerian capital market is to regulate market participants and protect the investing public. The Commission notes that the above findings are weighty and therefore needs to be further investigated to ascertain their veracity or otherwise.
“After due consideration, the Commission believes that the engagement of a Forensic Auditor to conduct a forensic audit info the affairs of Oando Plc has become necessary. This is pursuant to the statutory duty of the Commission enshrined in Section T3 (k) and (r) of The ISA 2007.
“To ensure the independence and transparency of the exercise, the forensic audit shall be conducted by a consortium of experts, the consortium is composed of the following institutions:
Akintola Willians Deloitte (Team Lead); United Securities Limited; SPA Ajibade & Co; TJADAP Consulting & Associates; and Nasir Muhammad & Co.
“The cost implication of the exercise is N160 million and shall be borne by Oando Plc.
“To ensure that the interest of all shareholders, especially the minority shareholders of Oando Plc are preserved during the course of the exercise, the Commission hereby places the shares of Oando Plc on Technical Suspension.
“The Commission expects Oando Plc to give all the necessary support and co-operation to ensure the success of the forensic audit.
“Please accept the assurances of the Director General’s highest regards.”
Meanwhile, effort made by Business Post to get comment of Oando Plc on this issue failed as an e-mail sent to the firm on Monday, through its media department, was not replied to as at the time of publishing this report on Tuesday.
By Aduragbemi Omiyale
Stanbic IBTC Nominees Limited has been commended for its critical role in the Nigerian capital market, especially for safely keeping non-pension assets.
For the past 30 years, the company has provided custody services in Nigeria, and to celebrate this milestone, it was honoured with a closing gong ceremony at the Nigerian Exchange (NGX) Limited.
The milestone reflects the institution’s longstanding contribution to investor confidence and the continued development of the nation’s capital market.
Welcoming the organisation to Customs Street, the chief executive of NGX, Mr Jude Chiemeka, commended its three decades of custody services, recognising the firm’s role in strengthening investor confidence and enhancing market safety.
He highlighted NGX’s continued investment in technology, which he said has enabled over 2.6 million active retail investors to trade on the platform.
“Technology continues to be at the heart of our strategy,” Mr Chiemeka said, noting that a vibrant and secure marketplace remains essential to investor participation.
In his remarks, the chief executive of Stanbic IBTC Bank, Mr Wole Adeniyi, thanked NGX for its continued partnership, saying, “We are thrilled to be here today, commemorating not just our journey, but also the remarkable progress made by the NGX.”
He noted that the collaboration between the two institutions has continued to drive innovation, product development and thought leadership across the industry.
“We are dedicated to raising standards within the industry as part of Standard Bank Group. Our focus remains driving the growth and development of Nigeria’s capital market. Indeed, Nigeria is our home, and we drive her growth,” he added.
The chief executive of Stanbic IBTC Nominees, Mr Babatunde Majiyagbe, reflected on the evolution of the business from the era of physical share certificates stored in fireproof vaults to today’s fully dematerialised market, where securities are held electronically.
“We started with holding custody of physical certificates, investing in vaults with fire and dust protection, so those certificates could be presented when needed,” Mr Majiyagbe recalled, noting that while the market has evolved significantly, the commitment to service excellence has remained unchanged.
“What has endeared a lot of investors to the market is that they are dealing with a reputable organisation like ours. We are high on good governance, and high on technology, making the process of investment in Nigeria easier,” he said.
Mr Majiyagbe added that Stanbic IBTC Nominees’ role goes beyond just attracting foreign portfolio investment (FPI) and capital.
“For us, it’s not just about FPI; but also about the value we have delivered over 30 years. Stanbic IBTC Nominees continue to be the eyes and ears of foreign and domestic investors in our market,” he stated.
Mr Majiyagbe added that the firm has also supported the development of market rules and safeguards, noting: “We have, over the years, advocated for growth, change, transformation and stability in our capability to provide services to domestic and foreign portfolio investors continuously.”
The deputy chief executive of Stanbic IBTC Bank and Chairman of Stanbic IBTC Nominees, Mrs Bunmi Dayo-Olagunju, said the next phase of growth will build on the institution’s legacy of trust.
“For 30 years, we’ve delivered growth, security, and client confidence. That’s why investors have stayed with us and why new business keeps coming.
“Our target for this new phase of growth is simple: build on that trust and ride the acceleration in Nigeria’s economic activity.
“With custody, settlement, capital raise, and advisory integrated on one platform, we’re not just a custodian. We’re an infrastructure. We look forward to building on that trust for generations to come, serving both local and international clients. Hopefully, we’ll have another 100 years of maintaining that trust with local and international markets,” Mrs Dayo-Olagunju said.
By Dipo Olowookere
The positive market breadth index recorded by the Nigerian Exchange (NGX) Limited could not save it from further claws of the bears on Friday.
The major performance indicators, the All-Share Index (ASI) and the market capitalisation, depreciated by 0.03 per cent and 0.01 per cent, respectively.
The ASI was down by 78.58 points to 245,283.68 points from the previous day’s 245,362.26 points, and the market capitalisation receded by N14 billion to N158.326 trillion from Thursday’s N158.340 trillion.
Business Post reports that market participants traded 943.0 million equities valued at N46.7 billion in 55,480 deals compared with the 2.1 billion equities worth N230.8 billion transacted in 48,231 deals a day earlier.
This implied that the trading volume shrank by 55.10 per cent, the trading value reduced by 79.77 per cent, and the number of deals surged by 15.03 per cent.
An analysis of the sectoral performance showed that the consumer goods space crashed by 0.60 per cent and the energy index went down by 0.09 per cent.
However, the banking sector improved by 1.90 per cent, the insurance counter expanded by 0.75 per cent, and the industrial goods segment soared by 0.10 per cent.
There were 33 appreciating stocks and 29 depreciating stocks during the last trading session of the week and month of July, indicating bullish investor sentiment despite the poor outcome.
CAP lost 9.97 per cent to trade at N128.25, Veritas Kapital depreciated by 9.49 per cent to N1.43, Vitafoam Nigeria slipped by 7.70 per cent to N179.80, The Initiates dipped by 6.67 per cent to N28.00, and NAHCO crashed by 6.63 per cent to N155.00.
Conversely, Eterna gained 10.00 per cent to sell for N33.00, Consolidated Hallmark also grew by 10.00 per cent to N8.36, McNichols expanded by 9.52 per cent to N5.75, Honeywell Flour increased by 8.96 per cent to N18.25, and First Holdco chalked up 8.00 per cent to quote at N129.55.
By Adedapo Adesanya
The NASD Over-the-Counter (OTC) Securities Exchange extended its bullish run on Friday, July 31, by 0.99 per cent.
This raised the NASD Security Index (NSI) by 43.54 points to 4,431.71 points from 4,388.17 points, and lifted the market capitalisation by N26.13 billion to N2.659 trillion from N2.633 trillion.
The growth came amid a significant decline in the activity level, as the volume of securities decreased by 73.0 per cent to 690,990 units from 2.6 million units, the value of securities slid by 15.0 per cent to N75.0 million from the preceding session’s N88.3 million, and the number of deals contracted by 31.6 per cent to 26 deals from the 38 deals recorded a day earlier.
The most active stock by value on a year-to-date basis remained Great Nigeria Insurance (GNI) Plc, with a turnover of 3.4 billion units valued at N8.4 billion, trailed by Infrastructure Credit Guarantee (Infracredit) Plc with 2.3 billion units sold for N6.5 billion, and Central Securities Clearing System (CSCS) Plc with 76.6 million units exchanged for N5.5 billion.
The most active stock by volume on a year-to-date basis was also GNI Plc, with the sale of 3.4 billion units worth N8.4 billion, followed by Infracredit Plc with 2.3 billion units transacted for N6.5 billion, and Resourcery Plc with 1.1 billion units traded for N415.7 million.
Investor sentiment was bullish yesterday after a positive market breadth index triggered by five price gainers and two price losers, led by 11 Plc, which gave up N14.99 to close at N225.01 per share versus the previous day’s N240.00 per share, and MRS Oil Plc, which shed N14.55 to settle at N132.00 per unit versus N146.55 per unit.
However, Nipco Plc gained N41.50 to sell at N456.50 per share compared with the preceding session’s N415.00 per share, FrieslandCampina Wamco Nigeria Plc appreciated by N12.93 to N147.93 per unit from N135.00 per unit, Nitrox Industrial Gases Plc improved by N1.00 to N20.00 per share from N19.00 per share, CSCS Plc soared by 54 Kobo to N102.00 per unit from N101.46 per unit, and Industrial and General Insurance (IGI) Plc jumped by 1 Kobo to 50 Kobo per share from 49 Kobo per share.
