The Securities and Exchange Commission (SEC) and Nigerian Stock Exchange (NSE) again threw the financial markets into confusion following what could be categorically described as a show of regulatory shame displayed by both institutions on Wednesday over the technical suspension on Oando Plc stock and earlier purported lifting.
The NSE had in the letter signed by Tinuade T. Awe, Executive Director, Regulation notified Oando Plc of the lifting of Technical Suspension on trading in its shares.
The NSE letter was dated April 10, 2018 and addressed to Ayotola Jagun, Company Secretary, Oando Plc.
“We refer to all prior communication regarding the technical suspension of trading in the shares of Oando Plc (Oando) implemented on the directive of the Securities and Exchange Commission (Commission) on 23 October 2017”.
“Please be informed that further to a 9 April 2018 directive of the Commission, The Exchange lifted the technical suspension placed on Oando’s shares after the close of trading today, 10 April 2018. Consequently, there will be no impediment to price movement in the shares of Oando when the market opens for trading (tomorrow), 11 April 2018,” NSE stated.
As directed, trading in the company’s shares began Wednesday morning to the excitement of the market. On receipt of the Commission’s directive, The Exchange put the process in place to lift the Technical Suspension, including testing on its trading system.
The share price had risen to N6.30 a 5.8percent increase from N5.99 in less than three hours of trading. As at 11:20am on Wednesday April 11, 2018, Oando Plc shares was on demand (bid) of 95 million units with 80 million units queued at the limit up of N6.60.
To the disappointment of the general public, there was a reversal of the lifting of the technical suspension on Oando Plc share for absolutely no reason. The share price remains at N5.99 position as at the time of filing this report. A market source said the NSE also reversed all transactions done on Oando shares.
This development in Nigeria’s capital market is raising questions on who is controlling the Nigerian financial market –individuals or the institutions.
“Both the NSE and SEC owe it to the general public to give us good reason why this has happened,” an informed market source said Wednesday.
According to our source, “This level of indecision with the financial gate keepers of the country is disgraceful! The international market is watching, foreign investors are watching and once again, the NSE and SEC have made a mockery of the market.”
No reason was given by the NSE for the continuous placing of the company shares on technical suspension even after early trading yesterday.
Several calls and messages to personnel in the communications department of Nigerian Stock Exchange (NSE) were neither returned nor replied as at press time.
“We don’t know what is going on again. We woke up this morning and were very happy but all of a sudden the story changed. But the NSE is not saying anything. It is causing a lot of confusion. The social media is agog,” an investor in Oando Plc told BusinessDay.
Meanwhile, a top executive at the SEC who spoke to BusinessDay simply said “We directed for the lifting of technical suspension on the shares of Oando Plc so investors can trade their shares while the forensic audit is going on. If they said we have suspended it again, did you see another letter to that effect? As far as we are concerned technical suspension on Oando Plc shares have been lifted. Wait till tomorrow morning (Thursday morning) and see. Maybe they have their own in house issues at the NSE”.
Currently, Deloitte is carrying out a forensic audit of Oando under the instructions of SEC.
In a letter on the Nigerian Stock Exchange dated April 11, 2018, Oando Plc informed the public and its stakeholders that its Board of Directors held a meeting on Tuesday, April 10, 2018 and approved the 2017 Audited Financial Statements (the Accounts).
Oando Plc expects to be in a position to file the accounts by the second week in May 2018 “as previously communicated”.
Meanwhile, there was a fresh twist, Wednesday, to the forensic audit of Oando, after one of the firms charged with the task of carrying out the audit said the process was yet to commence, thereby contradicting an initial guidance by SEC that the audit commenced in March.
In a text response to BusinessDay questions, Nasir Muhammad, a principal partner in Nasiru Muhammad and Co, one of the five firms engaged by SEC for the audit on Oando, said “To date, our firm has not been notified to move to Oando site yet, either by SEC or the lead consultant, Deloitte.
“And our engagement letter has not been vacated/withdrawn to our knowledge at the moment,” Muhammad said from Port-Harcourt on Wednesday.
The five firms engaged by SEC for the Oando audit are TJADAF Consulting, the stockbrokers engaged to review the allegations of insider dealings; Akintola Williams Deloitte and Touche, the forensic auditors engaged to review the allegation of financial misappropriation; Nasiru Muhammad and Co, joint forensic auditors; SP Ajibade and Co, the legal counsel engaged to review all the legal documents; and United Securities Plc, the registrars engaged to review and authenticate the register of the company with a view to ascertaining the true shareholding position of the shareholders.
Olukoju Anthony, a managing partner at Deloitte, did not answer two phone calls seeking clarification over the matter.
Akintunde Odunsi, the managing director at TJDAF consulting, another of the five firms tapped by SEC for the Oando audit referred our reporter to the SEC. A source at SEC claimed the audit was on and that Deloitte was currently on site.
On October 18, 2017, the SEC ordered a forensic audit of Oando’s affairs following petitions from two of the company’s shareholders over alleged insider dealings and manipulation of the company’s shareholding structure allegedly in breach of the Investments and Securities Act 2007 and the SEC Code of Corporate Governance for Public Companies.
The Oando crisis thickened and soon led to the suspension of former Director General of SEC, Mounir Gwarzo.
Gwarzo’s temporary replacement, Abdul Zubair, said last month that the commission has transmitted its directives to Oando for the commencement of the forensic audit.
Zubair said at the time that “the SEC has duly informed the firm of Akintola Williams Deloitte and Touche to proceed with the audit. He also stated that the “audit will proceed immediately in a transparent and thorough manner.”
Minority Shareholders Association of Oando Plc under the aegis of Proactive Shareholders Association of Nigeria (PROSAN) sent a petition to the House Committee on Capital Market accusing the SEC of shielding Oando Plc from the audit exercise.
The petition was signed by Taiwo Odeninde and Barrister Nnodu Okeke as National coordinator and Treasurer, and the petition was captioned “Dangerous and malicious and deliberate attempt by the Acting DG of SEC, Abdul Zubair to cover up Oando plc and protect the company from the forensic audit.
Another group of Concerned Shareholders of Oando Plc also on Tuesday April 10, 2018 called on President Muhammadu Buhari; Vice President Yemi Osinbajo; Senate President Bukola Saraki; Speaker, House of Representatives, Yakubu Dogara and other well-meaning Nigerians to prevail on the Nigerian Stock Exchange (NSE) and the Securities & Exchange Commission (SEC) to lift the technical suspension placed on the shares of Oando without any further delay.
Patrick Ajudua, head of the Concerned Shareholders of Oando said the continued suspension of Oando shares was sending wrong signals to the global community about the seriousness of the Federal Government in attracting foreign direct investments (FDIs) to bolster the economy.
Ajudua, while advancing reasons for the immediate lifting of the Technical Suspension, noted that the Federal Government must protect a prosperous company like Oando from going down if it wanted to demonstrate to the investing world about its seriousness to attract investors to the country.
Iheanyi Nwachukwu and Lolade Akinmurele
