Oando confirms being investigated
DUAL-listed Oando yesterday confirmed that it was under investigation by Nigeria’s Securities and Exchange Commission (SEC) over alleged malpractices in its financial statements, but said the claims were “defamatory and unsubstantiated”.
At the heart of the allegations against the Lagos-based integrated energy solutions group is the alleged disgruntlement by some of the company’s investors in relation to changes in the shareholding structure following the 2014 acquisition of the Nigerian assets of US-based ConocoPhillips.
Ayotola Jagun, Oando’s chief compliance officer and company secretary, said the complaint against it was devoid of facts and was confident the SEC would dismiss it.
“The company understands that the SEC is in receipt of correspondence containing (in our opinion) unsubstantiated, misleading and defamatory claims with respect to various matters that had already received board, shareholder and where required SEC approval.
“The company is fully co-operating with the SEC in the discharge of its duties as the capital markets regulator by providing all appropriate clarifications and rebuttals on the matters raised in the said correspondence,” Jagun said.
The two investors who are said to have approached the SEC to launch an investigation into Oando are said to be Nigerian businessman Dahiru Mangal and Italian businessman Gabriel Volpi.
In 2014, Oando, which is listed on both the Nigerian and Johannesburg stock exchanges, bought ConocoPhillips Nigeria’s upstream business for $1.5 billion (R19.52bn), at the time the biggest acquisition in the upstream oil and gas sector by a Nigerian company.
The company had said it plans to increase its oil production capacity to 100 000 barrels per day (bpd) over a five-year period, up from 42 500 bpd after buying ConocoPhillips’ Niger Delta assets.
The company earlier this year recorded a profit after-tax of 3.5bn naira (R144m) in the year ended December, marking a return to profitability after a two-year loss. In December the company completed a partial divestment of its 49 percent stake in its subsidiary Oando Gas and Power to Helios Investment in a deal worth $115m.
Shares in the company closed on a one-month low yesterday on news that the Nigerian regulator was looking into the affairs – they fell 9.5 percent in Nigerian bourse, while its shares saw no movement on the local bourse, with its share price stagnant at 25 cents a share.
Jagun said that media reports on the case had hurt the company.
“Any damaging information in the public domain could have a material impact on Oando.”