Court Stikes Out Oando’s Suit against SEC over Forensic Audit, Shares Suspension
Oando Plc has suffered a major setback in its effort to stop the Securities and Exchange Commission (SEC) from conducting a forensic audit into its affairs, as a Federal High Court in Lagos, on Thursday, declined the jurisdiction to entertain the suit brought before it by the embattled oil firm.
The presiding judge, Justice Mohammed Aikawa struck out the suit, which also sought an order of the court directing the lifting of a technical suspension on Oando shares and advised the oil firm to take its case to the Investment and Securities Tribunal (IST). The ruling was sequel to a preliminary objection filed by Counsel to SEC, George Uwechue, SAN, challenging the jurisdiction of the Federal High Court to entertain the suit.
In striking out the suit, the judge held that: “the subject matter of this issue falls within the exclusive jurisdiction of the Investment and Securities Tribunal (IST) and not this court.
Reacting to the ruling, Uwechue, said the judge upheld SEC’s argument that the court lacks the jurisdiction to hear capital market matters because there is a special tribunal set up for such cases.
Oando had approached the court for an order to lift the suspension of its shares as well as to stop an impending forensic audit after SEC, on October 18, directed the Nigerian Stock Exchange (NSE) to place trading of its shares on full suspension for 48 hours and on technical suspension from Friday, October 20. The suspension, according to SEC, was to enable it conduct a forensic audit into the affairs of Oando Plc following alleged breach of the provisions of the Investments & Securities Act 2007; breach of the SEC Code of Corporate Governance for Public Companies; suspected insider dealing; suspected related party transactions not conducted at arm’s length and discrepancies in the shareholding structure of Oando Plc, among others.
The commission, in the memo said these findings were weighty and therefore needed to be investigated further.
“To ensure the independence and transparency of the exercise, the forensic audit shall be conducted by a consortium of experts made up of auditors, lawyers, stockbrokers and registrars,” the regulator had stated. Trading in Oando’s shares were also suspended by the Johannesburg Stock Exchange (JSE) in October.