A Federal High Court sitting in Lagos on Monday restrained the Securities and Exchange Commission (SEC), from taking over the operations of Oando oil Plc.
Also, the trial court in its injunction order barred SEC from appointing an interim management to run the affairs of Oando pending the determination of the motion on notice brought before it.
In the suit no FHC/L/CS/910/19 brought against SEC and Mutiu Olaniyi Adio Sunmonu by motion ex-parte dated 3rd June, 2019 by Messers Jubril Adewale Tinubu and Omamofe Bayo, they further requested the court to impose on the commission a fine of over N91 million for barring them for a period of 5 years from heading any corporate position.
In an affidavit sworn to by the Deputy Group Executive Officer of Oando Plc Mr Omamofe Boyo,the deponent averred that by letter dated 18th of May 2017 Securities and Exchange Commission SEC wrote to Oando requesting for a response to allegations in petition written by Asbury Inc. Investment company and Alhaji Dahiru Mangal dated 2nd May 2017 alleging abuse of corporate governance and purported mismanagement of Oando ‘s business.
Oando duly address all the allegations in the petition through its letter dated 24th of May, 2017. Other letters written by SEC concerning this issue was equally addressed.
Thereafter SEC suspended trading on Oando shares, however due to the negative effects of the suspension, the company instituted a legal action against SEC to challenge SEC’s decision,the matter was later taken to court of appeal when the case was struck out for lack of jurisdiction by the Federal High Court in Lagos.
Following discussions with SEC, it was agreed that the suspension be lifted whilst Oando withdraw its appeal against the ruling of the Federal high court, while Akintola Deloitte was retained as sole forensic auditor to conduct the forensic audit of the company.
The company did not received any further communication from SEC until 31st of May,2019 when it received SEC’s letter informing it of the conclusion of Deloitte’s audit.
In its letter SEC decided and stated thus :
Mr Tinubu pay the sum of N91,125,000.00, to SEC for breaching section 60(2)of the investments and securities Act 2017 for certification of untrue statements of material facts in Oando 2013,2014 and 2015financial statements,and,
2.Mr TINUBU and Boyo be barred from being Directors of public companies for 5 years for improper conduct in managing the affairs of Oando.
Mr Boyo averred further that the SEC letter is devoid of material or particulars which would provide them with information, reasons, grounds or specific actions alleged to have been taken by them which constitute wrong doing under the law,neither were they interviewed by either Deloitte or SEC nor invited to appear before SEC to defend or respond to SEC’s findings as SEC’s letter which convey its findings also imposed sanctions on him and Tinubu.
Despite not providing them with opportunity to respond to the Deloitte audit report and the allegations contained therein, SEC proceeded to purportedly appoint Mr Mutiu Adio Sunmonu as head of interim management of Oando. They verily believe that his appointment would interfere with their management of Oando.
Mr Boyo contended that if the injunctive orders being sought are not granted and SEC continues with its actions irreparable loss would be caused to Oando through the collapse of its share price. SEC’s actions, if not restrained would also lead to an erosion of the company’s Shareholders funds thereby jeopardising the investment of thousands of Nigerians who are shareholders of Oando.
Mr Boyo averred further that the SEC letter is devoid of material or particulars which would provide them with information, reasons, grounds or specific actions alleged to have been taken by them which constitute wrong doing under the law,neither were they interviewed by either Deloitte or SEC nor invited to appear before SEC to defend or respond to SEC’s findings as SEC’s letter which convey its findings also imposed sanctions on him and Mr. Tinubu.
Despite not providing them with opportunity to respond to the Deloitte audit report and the allegations contained therein, SEC proceeded to purportedly appoint Mr Mutiu Adio Sunmonu as head of interim management of Oando. They verily believe that his appointment would interfere with their management of Oando company.
Mr Boyo contended that if the injunctive orders being sought are not granted and SEC continues with its actions irreparable loss would be caused to Oando through the collapse of its share price. SEC’s actions, if not restrained would also lead to an erosion of the company’s Shareholders funds thereby jeopardising the investment of thousands of Nigerians who are shareholders of Oando.
SEC said in a statement on Sunday, “Further to our press release on Oando Plc, dated May 31, 2019, the commission hereby informs the public of the constitution of an interim management team headed by Mr Mutiu Olaniyi Adio Sunmonu CON, to oversee the affairs of Oando Plc, and conduct an Extraordinary General Meeting on or before July 1, 2019 to appoint new directors to the board of the company, who would subsequently select a management team for Oando Plc.
SEC had on Friday announced the conclusion of the investigation of Oando and ordered the GCEO of the company, Tinubu, and other affected board members to resign.
The apex capital market regulator also said it barred Tinubu and the Deputy Group Chief Executive Officer of the company, Mr Omamofe Boyo, from being directors of public companies for a period of five years.
The commission said 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, among others.”
Justice Mojisola Olatoregun the presiding judge further directed SEC to suspend the execution or enforcement of its decisions contained in its letter of 31st May, 2019.
“An order of interim injunction restraining the 1st Respondent, its servants and its agent from directing, requesting any agency of government to act upon its decision contained in its letter of 31st May 2019 pending the hearing and determination of the applicant motion on notice”‘ Justice Olatoregun added.
The court has fixed 14th June, 2019 for hearing on the motion on notice.
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