Oando shareholders kick as company seeks peace accord with Mangal

The move by Oando’s management to reach an accord with one of its major shareholders, Dahiru Mangal and Ansbury Inc is being kicked by the company’s majority shareholders.

This is despite the intervention of the Emir of Kano, Muhammadu Sanusi II at a meeting where Alhaji Dahiru Mangal and Wale Tinubu, Chief Executive Officer of Oando were in attendance.

Oando’s management spent the better part of 2017 defending the Company’s business and reputation following the Securities and Exchange Commission’s (SEC) investigation into its affairs on petitions raised by two shareholders, Alhaji Mangal and Ansbury Inc.

According to a press statement issued by Oando, ‘Alhaji Mangal has confirmed his status as a substantial shareholder in the Company and all the issues he raised in his petition to the SEC have been successfully addressed and clarified.’  This action is in line with the Company’s promise at the end of last year where it committed to the successful conclusion of the SEC investigation so that it could refocus its energy on managing the business optimally. 

Oando’s Tinubu said:  “I am pleased we have been able to reach an amicable agreement with Alhaji Dahiru Mangal and successfully address the concerns he raised in his petition to the SEC.”  

Commenting further Mangal said: “Following the clarification I have received from Oando’s management team, I have withdrawn my petition to the SEC.”

During the mediation, Sanusi  said: “The development of the Nigerian economy is hinged on local participation; it is therefore an imperative that as a people we come together to make indigenous participation and success a reality.  I have watched Wale Tinubu from his days in Ocean and Oil and I am extremely proud of his growth and the company he has built.  Oando is proudly a Nigerian company whose impact has been positively felt by every Nigerian.  The Company is evidence of the progress we have made from an IOC led sector to one that is thriving with a mix of indigenous and international players.  I call on Alhaji Mangal and Wale Tinubu to see themselves as partners focused on achieving one goal; attainable only if they have confidence and trust in one another.’’

Following the Peace Accord and declaration of his substantial shareholding, the Company has encouraged him to exercise his rights as a shareholder by having more oversight of the Company’s affairs; the belief is that this will enable him gain a better understanding of the Company’s business development plans, initiatives and operations.

“We encourage him to exercise his rights as a substantial shareholder and be more involved in the affairs of the Company. Shareholders must be confident in the operations of the company they are invested in; this can only occur through dialogue and active participation,’’  Tinubu said.

 In addition, subject to the provisions of the SEC Code, Companies and Allied Matters Act (‘CAMA’) and Oando’s Board Appointment Process, Oando’s Board of Directors will consider the appointment of representation for Alhaji Mangal to the Board.  Oando has reinforced its stance that its business is run above board by publicly inviting Alhaji Mangal to have more oversight of its operations and exercise his rights as a shareholder which include the right to share in the Company’s profitability, as well as have a degree of control over the selection of the Company’s management team and General Meeting voting rights.

 This commendable development comes in the wake of minority shareholders expressing displeasure at the public nature of the investigation and the negative impact it has had on the Company’s reputation and to a degree operations. Oando took on the advice of its shareholders who requested the Company concentrate on reconciling with the disgruntled parties, and get back to the creation of value for its shareholders. This Peace Accord will see many of these shareholders breathing a sigh of relief and looking forward to a stronger balance sheet following the continued upward trajectory in the price of oil.

An anonymous shareholder lauded Oando’s resilience over the last few years especially over the last year. “I don’t know many companies that could have withstood the pressure Oando has been through over the last few years.  Last year was a tough year, to me the toughest the company has ever had. Their shares were suspended and market value dropped. Despite all of this, Oando still made a profit in every quarter of 2017. This has gladdened the hearts of us shareholders who have been with the company since its Unipetrol days. We pray 2018 is even better for the company and inevitably, us.”

But the mediation by Sanusi seems not to be satisfactory to the shareholders who said it cannot stop the planned forensic audit of the Nigerian energy firm as directed by the Securities and Exchange Commission (SEC).

The Oando Shareholders’ Solidarity Group (OSSG) has said through its coordinator, Clement Ebitimi, said in a statement on Tuesday that while the group was not against the “peace accord” reached by the management of Oando with Alhaji Mangal, as brokered by Sanusi, the issue of the forensic audit has to do with financial mismanagement, insider dealings, abuse of corporate governance tenets and infractions with regards to the Investment and Securities Act (ISA).

Ebitimi said: “For the avoidance of doubt, the forensic audit of Oando ordered by SEC is not about Alhaji Dahiru Mangal. The audit is about the series of infractions of the Investment and Securities Act (ISA) 2007 uncovered in the company by a preliminary investigation ordered by SEC.

“SEC’s preliminary findings established serious infractions to the existence of corporate governance, gross abuse of corporate governance, and a series of manipulations and financial mismanagement in Oando Plc.
“The alleged infractions include breach of the SEC Code of Corporate Governance; breach of ISA 2007 on disposal of Oando Exploration & Production Limited (OEPL) by Oando Plc 2013; breach of ISA 2007: misstatements in the 2013 and 2014 audited financial statement of Oando Plc arising from the OEPL transaction; breach of ISA on misleading information contained in Oando Plc’s 2014 rights issue circular; breach of SEC rules and regulations on payment of dividends; and the auditor’s doubt over the ability of Oando to continue as a going concern.

“SEC’s preliminary investigation also unearthed suspected insider dealing, in which the commission observed that certain persons classified as insiders within the provisions of Section 315 of the Investment and Securities Act (ISA) 2007 and who were in possession of confidential price sensitive information not generally available to the public, had between January and October 2015, traded on Oando Plc shares prior to the release of the company’s 2014 financial statement, where the company reported a loss of N183 billion.”

Ebitimi said a letter written by SEC to Oando on October 17, 2017 also established instances of related party transactions where the commission identified certain related party transactions and observed that they were not conducted on an arm’s length basis as required by law.
“According to SEC’s findings, Oando also declared dividends in 2013 and 2014 from unrealised profits,” the OSSG coordinator said.

He added that the allegations against the company were weighty and not about a shareholder.
His words: “The House of Representatives has issued a clear directive to SEC to investigate these infractions.

“The Minister of Finance, Mrs. Kemi Adeosun, in exonerating herself from attempts to stall the forensic audit, has also stated that the Oando management has a case to answer with regards to infractions of the ISA 2007.
“We hereby call on Emir Muhammadu Sanusi not to interfere in the legitimate process of instilling sanity in Oando and in the capital market.

“When he meted out severe disciplinary measures against some bank CEOs in the banking industry during his tenure as Central Bank of Nigeria governor in 2009, no one interfered with his job.”

On SEC, Ebitimi further stated that its primary role as the apex regulator of the Nigerian capital market is to regulate market participants and protect the investing public.

He said: “This must not be compromised by any means. The commission rightly noted that its earlier findings were weighty and therefore need to be further investigated to ascertain their veracity or otherwise; hence the forensic audit.

“Shareholders deserve to know the true state of affairs of their company. Investors are watching, the world is watching and we will not allow this matter to rest until the right thing is done.”