Oando stock freeze and audit stopped

Oil and gas company Oando says that it has obtained court orders against the Nigerian Stock Exchange to stop it suspending its shares indefinitely and against Nigeria’s Securities and Exchange Commission (SEC) to stop it conducting a forensic audit.

In May, Gabriele Volpi and his company Ansbury, an indirect shareholder in Oando, and Nigerian businessman Alhaji Dahiru Mangal laid complaints with the SEC about corporate governance breaches at Oando.

Mangal claims a 17.9% shareholding in Oando, but Oando says he only owns 4%.

Late last week, trading in Oando shares was suspended in Lagos and Johannesburg.

Ansbury’s and Mangal’s complaints prompted a probe, which Oando insisted in July was merely a call for documents, not an investigation.

The SEC has now raised a range of issues, which Oando responded to in a detailed stock exchange statement.

The company said the SEC’s actions prejudiced Oando’s ability to conclude business transactions and affected the confidence of stakeholders. Oando would have to pay 160-million naira (R6.1m) for the SEC’s audit, which was “onerous, unnecessary and irresponsible”.

The breaches identified by the SEC include that Oando had not sought SEC permission for, and had given misleading information to the public about, its 2013 sale of Oando Exploration Production Limited to Green Park Management.

Oando denies this charge, saying that because it had not secured ministerial permission for the deal, it had not sought SEC permission and had corrected its 2013 and 2014 financial statements.

THE STEPS PREJUDICE OANDO’S ABILITY TO DO BUSINESS AND AFFECT THE CONFIDENCE OF STAKEHOLDERS

Other SEC charges are that there was insider trading ahead of the release of the 2014 financial statements and that relatedparty transactions occurred.

The insider-trading issue, Oando said, should be taken up with the party responsible, not Oando. It said there was nothing wrong with related party transactions as long as they were disclosed, which Oando had done.

The SEC also queried the discrepancy between Mangal’s claim of his stake in Oando and what Oando said he held. Oando said its information was based on its share register and it was up to Mangal to explain his claim of a higher stake.