Oando con­firms be­ing in­ves­ti­gated

The Star Early Edition - - COMPANIES & NEWS - Ka­belo Khu­malo

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.”

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