WALE TINUBU, GROUP CHIEF EXECUTIVE OFFICER OF OANDO PLC
Controversy trails take-over by the Nigeria’s Securities and Exchange Commission (SEC) of Oando Plc as it bars the Group Chief Executive Officer, Wale Tinubu and his deputy Omamofe Boyo from being appointed directors of public companies for a period of five years.
The commission made it known that the two executives of the oil company committed, among other infractions, false disclosure and misstatements in financial statements hence they are not fit to manage helms of affairs of the company.
It said it will refer possible criminality to the appropriate criminal prosecuting authorities and also directed them to resign from the board of the oil company immediately.
The directors must be replaced through an extraordinary general meeting on or before July 1, 2019, the Commission said.
The disciplinary actions followed the investigations of two petitions by the commission in 2017 about certain infractions of securities and other relevant laws perpetrated by Oando.
In its reasons and explanation, SEC disclosed that it engaged Deloitte & Touche to carry out a forensic audit of Oando’s books.
According to SEC, shocking findings from the report revealed serious infractions such as “False disclosures, market abuses, misstatements in financial statements, internal control failures, and corporate governance lapses stemming from poor board oversight, irregular approval of directors’ remuneration, unjustified disbursements to directors and management of the company, related party transactions not conducted at arm’s length, amongst others.”
SEC added that Tinubu, Boyo and Oando also expected monetary penalties and refund improperly disbursed remuneration.
The Commission said it was confident that the implementation of punitive measures and introduction of some remedial measures will reduce unwholesome practices by public companies.
In a swift action, SEC named Mr. Mutiu Sunmonu, former Managing Director of Shell Petroleum Development Company (SPDC), also an Independent Non-Executive Director of Unilever Plc, and the Chairman of Julius Berger Nigeria Plc. Sumonu is believed to have had a successful career with the multinational oil company to head an interim management team which has been constituted to oversee Oando Plc.
SEC also mandated members of the interim team to conduct an Extra Ordinary General Meeting to appoint new directors to the Board of the company.
SEC Head of Corporate Communications, Mrs. Efe Ebelo submitted that the new board would subsequently select a management team for Oando Plc.
Responding to the new development, Oando Plc said, it would challenge SEC ruling on the outcome of its forensic audit.
The company made the disclosure in a statement by its Head of Corporate Communications, Mrs Alero Balogun.
Balogun said that the company would take all legal steps to protect its business and assets, while remaining committed to act in the interest of its shareholders.
According to Balogun, “The company reserves the rights to take all legal steps to protect its business and assets whilst remaining committed to act in the best interest of all its shareholders.”
Balogun described as unsubstantiated, SEC’s call for resignation of affected board members of Oando Plc and subsequent convening of an extra-ordinary general meeting.
She revealed that payment of monetary penalties by the company and affected individuals and directors, refund of improperly disbursed remuneration by the affected board members to the company were also unsubstantiated.
She said that Oando was of the view that the alleged infractions and penalties were unsubstantiated, ultra vires, invalid and calculated to prejudice the business of the company. “The company has not been given the opportunity to see, review and respond to the forensic audit report and so is unable to ascertain what findings (if any) were made in relation to the alleged infractions, and defend itself accordingly before the SEC,”
However, what seems to be a new twist in the take-over saga is a court injunction by a Federal High Court in Lagos restraining SEC from its action.
Wale Tinubu and his deputy, Omamofe Boyo were granted the injunction by the High Court, restraining SEC from executing the sanctions.
The injunction also restrains SEC and all of its agencies from acting upon decisions as well as preventing Mr. Mutiu Sunmonu from acting as the head of the interim management of Oando. The injunction further explicitly states that Omamofe Boyo and Wale Tinubu are barred from acting on any of the sanctions stated by SEC, meaning that the two business moguls are allowed to continue in their respective roles till the case is heard by the Federal High Court in Lagos.
It is not known yet where the final judgment will swing to including the future reaction of SEC, if the commission will appeal in case it didn’t get a favourable judgment. Therefore, a protracted legal battle might ensue from both parties that will eventually lead to logical conclusion.