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Auditors worry over Oando as AGM holds amid protest

Auditors worry over Oando as AGM holds amid protest

It was a battle of wits at the annual general meeting (AGM) of Oando on Monday in Uyo, Akwa Ibom State as various shareholders’ groups raised contending voices about the affairs of the indigenous oil and gas group.

While some shareholders’ groups rooted for the change of management and resignation of the Group Chief Executive Officer of Oando, Mr Wale Tinubu, others rose in support of the current management against what they described as hostile takeover bid and campaign to take over what the management had labored to build over nearly two decades.

The board of directors and management of Oando however succeeded in pushing through the proceedings of the annual general meeting amidst protests from many shareholders’ groups.

The external auditors to Oando, Ernst & Young, meanwhile left a major scar on the records of the company as they raised concerns over the ability of the company to continue as a going concern.

“We drew attention to note 45 in the financial statements, which indicates that the company reported a comprehensive loss for the year of N33.9 billion ( 2015: loss N56.6 billion) and as at that date, it’s current assets exceeded current liabilities by N14.6 billion (2015: N32.8 billion net current liability). The group recorded a comprehensive income of N112.4 billion for the year ended December 31, 2016 (2015: loss N37.8 billion) and as at that date, its current liability exceeded current assets by N263.8 billion (2015: N260.4 billion). As stated in the notes, these conditions, along with other matters, indicate that a material uncertainty exist that may cast significant doubt on the company (and Group’s) ability to continue as a going concern,” Ernst & Young stated.

With placards, some group of shareholders stormed the meeting demanding for the resignation of Tinubu. The protesters whose aim was to stop the AGM from holding accused Tinubu of mismanagement and lack of full disclosure.
Tinubu, in his response, said that the protests were uncalled for as the Securities and Exchange Commission (SEC) had approved that the AGM after examining the petition written by two shareholders.

He called on shareholder to have faith in the company as management is doing what it can to turn the company around.

According to the leader of protesting shareholders under the aegis of “Oando Shareholders’ Solidarity Group”, Mr. Francis Michael said they were protesting in order to change the management of the company over gross mismanagement and abuse of corporate governance.

According to him, they have read several reports on the gross mismanagement of Oando by the present management of the company.

“We therefore, call on the present CEO of Oando, Mr. Wale Tinubu to step down and allow a competent hand to manage the affairs of the company to save millions of Nigerians from further loss of their hard earned money. We are also calling on the Securities and Exchange Commission (SEC) and Nigerian Stock Exchange (NSE) to commence the immediate investigation of the company to determine the true state of the financial position and corporate practice.

“We also demand the rejection of proposal concerning the remuneration of the CEO and directors of Oando Plc and rejection of 2016 annual report and accounts and the need to convene an Extra-ordinary General Meeting within the shortest possible time to address the issue of current mismanagement and abuse of corporate governance of the company,” Michael said.

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However, some other shareholders demanded that the management reconcile with the aggrieved stakeholders so as not to kill the company.

According the National Coordinator of Progressive Shareholders Association of Nigeria (PSAN), Mr Boniface Okezie, reconciliation provided a better way to resolve the disputes between the major stakeholders in the company.

“We are aware of the petition written to the Securities and Exchange Commission (SEC) by the majority shareholders of this company. We demand that the management reconcile with them and give them the three vacant positions on the board. This will save this company from collapse,” Okezie said.

Ansbury Investment Incorporated had petitioned SEC citing gross abuse and mismanagement by the management of Oando. Two petitioners had alleged gross abuse of corporate governance and financial mismanagement. The petitioners, Alhaji Dahiru Mangal and Ansbury Inc, further requested a postponement of the company’s 40th Annual General pending the close of the SEC investigation.

However on conclusion of its initial finding, the SEC saw no material evidence that would warrant a postponement of the AGM, further reiterating the company’s position that the petitions lacked merit.

Mr Adeleke Oladimeji, a shareholder of Oando, expressed concern on how media reports are gradually eroding shareholders’ confidence in the company. He explained that the media were sub-consciously doing more damage than good to the investment of many Nigerians by reporting news without verification from parties involved.

Another shareholder, Mrs. Bisi Bakare, advised that shareholders resolve their disputes with the company in private to avoid unnecessary sensationalism which would in turn result in loss of money for the company and shareholders.

Shareholders voted unanimously to all resolutions, expressing confidence in the management team, led by the Group Chief Executive Officer, Wale Tinubu, and retaining the company’s board of directors.

Shareholders requested a quick resolution to the issues with the petitioners to enable Oando’ management focus on building the brand.

Speaking on the petitions, Tinubu said that as a reputable company, the company’s approach is not to respond to every allegation in the media as allegations need to be delivered to the company in a particular format before it can respond.

“The petitioners requested a postponement of our AGM, but we provided the SEC with all the information required and we were cleared to hold the AGM,’’ Tinubu said.

“We reacted to the 2014 fall in oil price by providing a detailed restructuring plan which saw us reduce our overall debt by over 40 per cent. Following the completion of our strategic deleveraging initiatives, we have evolved into a leaner but more focused organization with two core dollar earning entities,” Tinubu said as he assured the shareholders of returns in the near future.

He thanked the shareholders for their continued support of the company in the challenging times and assured them that the management team will focus on sustaining the company’s profitability and ensuring returns to shareholders.

“As your management team we assure you that our main focus will continue to be geared towards sustaining your company’s profitability and ensuring adequate return for you our esteemed shareholders. Our story has always been one of resilience, innovation and growth, and I assure you that we are fully committed towards positioning your company towards sustained growth moving forward,” Tinubu said.

 

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