Oluchi Chibuzor
Minorityshareholdersin Oando Plc are presently in an unenviable position. This is as a result of the abrupt suspension of the company’s Annual General Meeting (AGM) last week by the Securities and Exchange Commission (SEC). Some analysts believe the suspension of the AGM has created more uncertainties around the company and would further dampen investor confidence. Section 81 of the Companies & Allied Matters Act ascribes to every member of an incorporated company, who has fully paid for his or her shares, a right to attend all the shareholders’ meetings of such a company; and to speak and vote at such shareholders’ meetings. The mode of proving membership of a company is by the possession of a share certificate and the tendering of a certified true copy of the register of members, should such a matter go to litigation. This right is clearly what the apex capital market regulator has denied the minority shareholders of the company.
SEC’s Reasons
SEC had announced the suspension of theAGM in furtherance of an ex parte order of the Federal High Court, Ikoyi, Lagos in Suit No: FHC/L/ Cs/910/19 in Mr. JubrilAdewale Tinubu &Anor V Securities & Exchange Commission & Anor. According to the commission, the AGM was suspended till further notice, based on a court order. SEC said the action was taken to allow the parties to maintain status quo, adding that it would update the public on the outcome of the ongoing litigation. SEC had on May 31, 2019, announced the conclusion of investigation of Oando Plc and directed among others the immediate resignation of its Group Managing Director, Mr. Wale Tinubu, his deputy, Mr. Mofe Boyo and other directors. The apex regulator also barred Tinubu and Boyo from being directors of public companies for a period of five years. The commission followed later with the constitution of an interim management team led by Mr. Mutiu Sunmonu. But Oando challenged the decisions in court and got the Federal High Court, sitting in Lagos, to issue orders restraining the commission from implementing any of its May 31 decisions. But in a ruling on Monday by Justice Mojisola Olatoregun, the Federal High Court barred SEC from giving effect to the decision pending the determination of a suit filed by Tinubu and Boyo. Justice Olatoregun had ordered the parties to maintain status quo. The judge made the interim order following an ex parte application taken before her and argued by Mr. Tayo Oyetibo (SAN), accompanied by Mr. Yele Delano (SAN) and Motunrayo Akinyemi. She ordered that the interim order along with the motion on notice filed by Tinubu and Boyo should be served on SEC and Mr. Mutiu Sunmonu, who was joined as second respondent in the ex parte application.
Who Has Power to Suspend AGM, SEC or CAC?
However, a source at the Corporate Affairs Commission (CAC), faulted the action of SEC regarding the AGM. She cited a case in 2017, whereby SEC had requested that Oando postpone its 40th AGM whilst the commission addressed allegations raised by petitioners. Oando had then promptly responded that it had responded to all of SEC’s enquiries and it would also not be in the interests of its shareholders to postpone the AGM and had proceeded with the meeting. Oando had then written to SEC saying: “You have repeatedly referred to the provision of s.213 of CAMA, which grants the Registrar General of the Corporate Affairs Commission (and not the DG of SEC) the power to extend the time, by a period not exceeding three months, within which a company may hold its annual general meeting, as part of the SEC’s justification for requesting the Company to postpone its AGM. Not only is this extension not automatic, it is within the discretion of the directors of the company whether or not to apply for this extension and will only be granted at the sole discretion of the Registrar General of the Companies.” The oil and gas company had said there was no power in the Investment and Securities Act that gives SEC such powers.
Order to Seek Review
Also, a Federal High Court, sitting in Lagos last week, has granted Tinubu and Boyo leave to file a motion for a judicial review of the sanctions of SEC. Tinubu and Boyo, through their counsel, had approached the court for an order to review their ban from being directors of public companies for five years and the additional imposition of N91,125,000 on Tinubu. Justice Ayokunle Faji granted the order of certiorari following an application filed by Tinubu and Boyo seeking a review of the decision of SEC. An order of certiorari is a writ or order by which a higher court reviews a case tried in a lower court or administrative agency. In a separate ex parte application filed through their counsel, Olasupo Shasore (SAN), Tinubu and Boyo prayed for an order of certiorari to quash SEC’s purported imposition of N91,125,000 fine on Tinubu. They sought an order of certiorari to quash SEC’s purported decision to bar them from being appointed as directors of public companies for five years. They further prayed for an order of certiorari to quash SEC’s purported appointment of an interim management team to be headed by Sunmonu (the second respondent) to oversee Oando’s affairs. Justice Faji, last Tuesday, granted the application as prayed. He granted an “order of certiorari bringing up to the Federal High Court for the purpose of being quashed, the decision of the first respondent contained in its letter of 31st May 2019 at Page 6 Paragraph 5 thereof, which purported to bar the applicants from being directors of public companies for a period of five years.” He also granted an order prohibiting SEC, whether by itself or agents, from enforcing or seeking to enforce its purported decisions contained in the May 31 letter. He also ordered the restraining of SEC from implementing its purported decisions contained in a statement it issued on June 2 and from interfering with, taking over or usurping the management of Oando’s affairs either by itself, agents or through the purported interim management team. The court restrained Sunmonu from purporting or continuing to act as head of the interim management team in place of the applicants. Justice Faji made “a declaration that the first respondent (SEC) acted ultra vires and without jurisdiction in making its decision as contained in its letter of 31st May, 2019 which conveyed the imposition of a fine of N91,125,000 on the first applicant and purported to bar the first and second applicants from being directors of public companies for a period of five years… and appointing an interim management team to be headed by the second respondent.” “The motion or summons for judicial review shall be filed and served within seven days,” the judge ruled Justice Faji adjourned until June 21 for hearing.
Shareholders React
Also, some shareholders of Oando Plc protested the action by SEC. In addition, some minority shareholders of Oando called on the federal government to save the company from its current crisis. But while some of the shareholders said the suspension of the AGM was neither in favour of the investors nor the capital market, others lauded the regulator for its action. In fact, the minority shareholders urged the federal government to intervene and stop further value erosion in the company’s shares. Chairman, Progressive Shareholders Association of Nigeria (PSAN), Mr. Boniface Okezie, said the regulator should have allowed the AGM to hold. “I think SEC has not done the right thing because the AGM has been approved before now. Suspending it will lead to loss for the company, which has also booked for the venue and paid for other things necessary for the meeting to