Oando Gets Court Order to Stop Forensic Audit, Share Price Suspension
By Modupe Gbadeyanka
The last may not have been heard about the issues Oando Plc has with the capital market regulator, the Securities and Exchange Commission (SEC).
This is because the oil firm has approved the court to stop the suspension placed on its share price by the apex market regulator.
Last week, SEC directed the Nigerian Stock Exchange (NSE) to stop trading on the shares of the energy firm.
But on Monday, it relaxed the suspension, allowing trading of Oando stocks, but without price movement.
According a report by Reuters on Tuesday, the Nigerian oil company has obtained a court order to lift the suspension of trading in its shares and halt a forensic audit planned by SEC.
Reuters, which said it saw court documents on Tuesday regarding this, quoted an Oando spokesman as describing “the actions taken by the SEC, the suspension of the shares of the company and the initiation of a forensic audit [as] prejudicial to the company.”
Oando’s share price was frozen at N5.99k on Monday until further notice.
The Nigerian Stock Exchange said it was reviewing the court processes to provide an appropriate defence against the court order. The SEC declined to comment, saying that it was yet to receive the court order.
By 1236 GMT, only 42,923 shares at the firm’s fixed share price of N5.99k had traded. 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 an SEC letter to Oando dated October 17, 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 on the ownership of some Oando shares bought through an investment vehicle at the time the company acquired the Nigerian subsidiary of U.S. oil company ConocoPhillips for $1.65 billion in 2014.
Oando has said it was aware that the regulator had received petitions but 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’s share price fell close to a one-month low after the regulator said it was investigating the firm’s shareholding structure following the ConocoPhillips acquisition.
Trading in Oando’s shares has also been suspended in Johannesburg, where it has a secondary listing.