By Modupe Gbadeyanka
News of an investigation into the financial statements of Oando Plc by the Securities and Exchange Commission (SEC) has left operators in the Nigerian stock market, especially investors, asking few unanswered questions.
Last week, Channels TV reported that the capital market regulator was looking into petitions filed by some foreign investors in Oando Nigeria Plc in relation to shareholding structure following the $1.65 billion cash the firm paid in June 2014 to acquire the oil production assets of Conoco-Phillips in Nigeria.
Oando acquired ConocoPhillips’ Nigerian business in 2014 aimed at moving the business upstream into oil exploration and production from being a petroleum products retailer.
But high financing costs coupled with lower oil prices have hit profits.
In last week’s report, it was disclosed that SEC would likely decide on the next line of action on Oando Nigeria this week, depending on the response from the company.
Oando, in a statement issued on Saturday, confirmed being investigated by the market regulator, but frowned at the “unsubstantiated, misleading and defamatory claims with respect to various matters that had already received board, shareholder and where required SEC approval.”
The oil firm said it was “fully co-operating with the SEC in the discharge of its duties as the capital markets regulator by providing all appropriate clarifications and rebuttals on the matters raised in the said correspondence.”
“Oando will be happy to provide full disclosure of the outcome as soon as the SEC review is completed,” it promised in the statement last Saturday.
But as capital market observers await outcome of the said probe, investors are left wondering what punishment would be meted out on the oil firm if found culpable.
Some investors fear that the capital market regulator may suspend the company from carrying out any trading activities at the stock market, others fear the share price of Oando may suffer hugely for it.
According to Reuters, shares of Oando fell close to a one-month low on Monday on news of the SEC probe.
Its share value fell 9.54 percent in Lagos, down for the second session in a row, to a level last seen in June, the reputable news platform said in a report today.
