Shareholders of Oando Plc on Thursday commended the Securities and Exchange Commission (SEC) resolve to investigate allegation leveled against the management of the company.
Reacting to the development, National Coordinator Progressive Shareholders Association of Nigeria, Mr. Boniface Okezie said the decision will restore investors’ confidence in the capital market.
SEC had of Wednesday directed the Nigerian Stock Exchange (NSE) to halt trading in the shares of Oando.
According to him, it’s imperative that SEC investigate and make observations public without delay.
“All bottleneck must be blocked. Thorough investigation is necessary. All decision must be made public.
Another shareholder, Chief Stephen Ozoloka, said the move by SEC has further given the needed impetus for the capital market to thrive based on its zero tolerance for infraction.
He noted that the prompt decision of the commission to put on hold trading in the shares of Oando will guide against a possible run on the value of the shares of the company, which would have been detrimental to members of the company interms of value of their holdings.
He reiterated that by virtue of the SEC’s decision, hope has been further restored to the market. “My hope is that the commission should be however be careful not to abuse its regulatory role. They should be firmed in taking whatever decision once they conclude with their findings”, he added.
It would be recall that some shareholders of the company had said penultimate week that, “We have observed for three good years now that the financial operations of Oando Plc was of worrisome critical matters that affect our investment. No dividend was paid since 2013 financial year. Critical financial management concern on our investment areas follows:
“External auditors of Oando Plc reported strong doubtful going concern of the group annual financial statement. The group has negative working capital of over N263billion with current liabilities exceeding current assets. The petition further stated that the management of Oando was unable to service its financial obligations. The group has accumulated losses of over N159 billion in its balance sheet as at 2016 year end, “he said.
On his part, President of Renaissance Shareholders Association, Ambassador Olufemi Timothy alleged that the management of Oando is currently selling critical assets of the company.
He therefore called on SEC to do what is needful to restore investors’ confidence in the capital market.
“Management had been selling assets of the company, especially money-spinning assets such as downstream (Marketing) businesses without meaningful improvement in debts situation. It is planning to sell its share in OER which unfortunately is the last asset belonging to the company. We note that all actions were not enough to fully repay the outstanding debts. Management closed the year 2016 with consistent loss of over N768 billion; significantly worse than the year-end 2015.
“The net loss for the year from continuing operations in 2016 amounts to N25.8billion as reported in the annual audited financial statement. We wish that you use your good offices, as a matter of urgency to save our investment in Oando Plc by looking into these matters, and cause an action to intervene in Oando Plc by removing the present management to allow for proper investigation of the corporate governance abuses and financial mismanagement as noticed in the published full year audited financial statement.
“We believe in the interest of fairness, justice and equity, the CEO, Mr. Wale Tinubu must vacate his seat to allow for proper investigation of all these allegations, corporate governance abuse and financial mismanagement. An independent new management must step in to save our investment in the interest of the integrity of the capital market and investor’s confidence, “he said.