Oando heads to court, kicks against forensic audit

Oando Plc says it has asked a court to restrain the Nigerian Stock Exchange (NSE) and Security Exchange Commission (SEC) from further suspending its shares.

NSE and Johannesburg Stock Exchange had suspended trading of Oando shares, citing an advice from SEC.

On Monday, the NSE partially lifted the suspension on the shares, meaning that the shares can be traded but there will be no change in price.

SEC had accused the company of infractions, including the alleged declaration of false profits and insider trading.

But in a nine-page statement released by the company and signed by Ayotola Jagun, chief compliance officer and company secretary, Oando said it would make amends in areas where it was wrong.

Jagun did not disclose the location of the court the company approached.

“Our 2016 Corporate Governance report filing dated January 31, 2017 contained an error which can be seen when compared to our previous filings, including the H2 2015 report sent to the SEC under cover dated August 31, 2016,” the company said, responding to the allegation that it had different approval standards for remuneration.

“Both Oando’s Delegation of Authority Document and the Remuneration Policy, approved by the board of directors in October 2011, provide for the remuneration of all executive directors to be approved by the board upon the recommendation of the governance and nominations committee with input from the group chief executive.

“The company informed the SEC that the error in our 2016 filing would be rectified in subsequent filings.”

Oando said it was not given a chance to respond to allegations about breaching SEC’s rules on dividend payments.

“Any investigation into whether or not there has been a breach of insider trading rules is a question of fact which would be better addressed through an inspection of trading records of the Exchange rather than through a forensic audit of the company,” it said about the insider trading allegation.

“If Alhaji Mangal claims he holds more shares in the company than is stated in the register of members, then it is for him, directly, or through his brokers to seek a reconciliation of the register, providing evidence of the number of shares that he acquired in the company and when he acquired those shares.

“We do not see how this ‘discrepancy’ should therefore require a forensic audit to ascertain its veracity when the burden is on Alhaji Mangal to show that he acquired those shares.”