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Fears of Gwarzo’s exit derailing Oando probe eased, as SEC notifies oil firm of forensic audit

Oando concludes divestment of equity stake in downstream operations

Fears that the suspension of Munir Gwarzo, Director-General of the Securities and Exchange Commission (SEC), would derail the probe of Oando’s alleged grievous infractions, have been eased as the commission has written a fresh letter to the oil firm notifying it of upcoming forensic audit.

Following Gwarzo’s suspension, some reports had claimed that he was only a casualty of his defiant position to pursue the Oando probe against the opposite directive of the Minister of Finance, Kemi Adeosun.

Read also: Following Gwarzo’s suspension, FG appoints Abdul Zubair acting DG of SEC

But in a letter to the Group Chief Executive Officer of Oando, Wale Tinubu, SEC insisted on a foresnsic audit. Its letter said that the forensic auditors “shall be at your (Oando) premises on any date from Wednesday, December 6, 2017.”

Only a day earlier, an acting Director-General of the commission, Abdul Zubair, had been appointed to hold the fort in the absence of a substantive head.

In a statement by Head of Corporate Communications, Securities and Exchange Commission (SEC), Bagudu Waziri, the Commission reiterated its commitment to undertake a thorough investigation into the allegations against Oando.

The Commission reiterated its zero tolerance to infractions in the Nigerian capital market.

In the letter addressed to the Group Managing Director of Oando and titled: ‘Re: Forensic Audit into the affairs of Oando Plc’, SEC noted that it had in its earlier letter dated November 27, 2017 to the GMD and another letter to Oando’s lawyers dated November 28, 2017, the Commission had notified the company of its decision to go ahead with the forensic audit.

“That the Commission is aware, that suit no: FHC/L/CS/1601/17: OANDO PLC V. SEC & ANOR was struck out on November 23, 2017 by his Lordship Hon. Justice Aikawa of the Lagos Division of the federal high court. That the Commission is not aware of the existence of any valid or subsisting order of court restraining the Commission from proceeding with the forensic audit. While we acknowledge that a notice of appeal has been filed to challenge the judgment of the federal high court, this notice does not serve as an order of court restraining the Commission from conducting the exercise,” SEC stated in the letter.

The Federal High Court (FHC) in Lagos had on November 23, 2017 removed the temporary reprieve that it granted Oando by declining jurisdiction on the case instituted by Oando seeking to stop capital market regulators from investigating the company.

At the court hearing in the suit-Oando v SEC and others (FHC/L/CS/1601/17), Honourable Justice Aikawa of the Lagos Division of the Federal High Court declined jurisdiction on the matter and consequently struck out the suit. The court also awarded a cost of N20,000 against Oando in favour of Securities and Exchange Commission (SEC).

The Nigerian Stock Exchange (NSE) had on Monday October 23, 2017 placed the shares of Oando on technical suspension, “thus, the shares will be available for trading but there will be no price movement while the technical suspension subsists”. The technical suspension was part of directives from the Securities and Exchange Commission (SEC), which ordered suspension of trading on the shares and forensic audit of the operations of Oando.

A source at SEC said the apex capital market regulator was ready to commence its audit of Oando as the dismissal of the case technically voided the ex parte injunction obtained by Oando.

Oando obtained an interim court order on Monday October 23, 2017, restraining the NSE and any other party working on their behalf from giving effect to the directive of the SEC to implement a technical suspension of the shares of the company pending the hearing and determination of the motion for injunction and also an order restraining the SEC and any other parties claiming through or working on behalf of the Commission from conducting any forensic audit into the affairs of the company pending the hearing and determination of the motion for injunction.

However, both the NSE and SEC were served with the enrolled court order on Tuesday, October 24, 2017 after the technical suspension was carried out by the NSE on Monday, October 23, 2017.

Documents obtained by Ripples Nigeria have however outlined preliminary findings by SEC, showing how Oando allegedly manipulate its share prices through creative accounting profits amidst several contraventions of the extant rules and laws at the capital market.

 

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