$680m London Judgment: We Were Not Party To Arbitration- Oando Plc

Nigeria’s integrated energy giant, Oando Plc, on Monday night allayed the fear of its stakeholders over the reported order of the London Court of International Arbitration (LCIA) that it pays Ansbury Investment Incorporated (a company registered in Panama) the sum of $680m.
Decrying the statement by Adrea Moja, lawyer and legal counsel of Ansbury Investment Inc., following the LCIA’s ruling, as calculated misinformation, Oando cited “public documents” showing that Gabriel Volpi’s shareholding in Oando as false.

Genealogy Of Oando Plc
According to statement by the management of Oando Plc, corporates involved in the lingering battle are: Whitmore Asset Management Limited, (owned jointly by Oando’s Group Chief Executive, Adewale Tinubu and his deputy, Omamofe Boyo); Ansbury Inc. (which has Volpi as beneficial owner).
The statement hinted that while the going was good, Ansbury and Whitmore Limited incorporated a joint venture investment vehicle in the British Virgin Islands called Ocean and Oil Development Partners (OODP BVI), which owns a 99.99% stake in Ocean and Oil Development Partners (OODP Nigeria).
It is OODP, rather than its parent (OODP BVI) that therefore owns 57.37% stake in Oando PLC, making it the majority shareholder in the company at the moment and not Volpi, the statement further argued.
The LCIA ruling, Oando’s management continued, follows months of arbitration on a loan repayment dispute between Tinubu, Boyo and Volpi, dating back to 2017 when “Volpi allegedly attempted to breach a loan repayment agreement between him and Whitmore Limited in the British Virgin Island.
Contrary to media speculations, the statement added that OODP BVI of which Volpi owns a 60% stake, was actually directed to pay Ansbury (his own company) a total of $600m, and Whitmore, the remaining $80m.
It then follows, the statement continues, that although payment terms are yet to be released by the LCIA, going by the ownership structure, Volpi, while not being one Oando Plc’s 270,000 shareholders, would “be paying himself $360m.”

The Trouble
Continuing, the statement recalled that the dispute “between Ansbury and the Whitmore principals arose when Volpi called in his loan repayment before the January 1, 2018 due date. This, he allegedly, invested $750m used for Oando’s purchase of ConocoPhillips Nigeria assets.
“He further breached the jurisdiction of the law governing OODP BVI by petitioning the Nigerian Securities and Exchange Commission accusing Oando PLC of ‘financial mismanagement and cooked books, a company his counsel claims he has a majority shareholding in, all a bid to recoup his loan from the principals.”

Reputational Damage
Oando said it has successfully navigated the difficult waters of the reputational damage and financial losses arising from Volpi’s petition to the SEC dated May 2, 2017, where it expressed fears of strong uncertainty regarding the going concern status of the group, based on disclosures in the 2015 and 2016 audited financial reports. One of such was the consistent operating losses, while profit resulted from asset stripping by the group, besides the negative working capital and burgeoning debt level, as well as various governance abuses.
Ansbury therefore sought the intervention of the SEC to its investor protection role by convening an Extra-ordinary General Meeting (EGM) of Oando Plc to change the board and management, while allowing shareholders reconstitute the management team. Ansbury sought permission to take over the management of Oando Plc by moving its team and consultants, or in the alternative, be permitted to investigate the activities of Oando Plc without hindrance, being an indirect majority shareholder. The company also wanted the SEC to subject the Tinubu/Boyo management team to appropriate regulatory action.
Rather than Oando and its principals being brought to their knees, the statement said it kicked off 2018 by reaching a peace accord with one of its petitioners, Alhaji Dahiru Bara’u Mangal in a bid to restore shareholder confidence in the brand.

Brighter Tomorrow
As a sign of the new dawn, the statement noted that Oando has so far recorded six consecutive quarterly profits since after the 2016 financial year’s results.
“In 2017, the company recorded profits in all four quarters and more recently Oando recorded a N4.2bn PAT in Q1 2018 and N19.8bn PAT in its FYE 2017 financial results.”
Furthermore, recalled that Oando Plc, in conjunction with its midstream affiliate, Axxela Limited (formerly known as Oando Gas & Power) and Oilserv Limited, were in April awarded the Engineering, Procurement, Construction (EPC) mandate for the Ajaokuta – Abuja portion (Lot 1) of the Ajaokuta-Kaduna-Kano Pipeline system by the Nigerian National Petroleum Corporation (“NNPC”).
Recently also, Oando said it joined Nigeria Agip Oil Company (NAOC), Shell Petroleum Development Company (SPDC), other indigenous and international oil companies in partnership with the Nigerian National Petroleum Corporation (NNPC) to sign an agreement for implementation of Gas Projects worth $3.7bn.
The gas projects tagged ‘Seven Critical Gas Development Projects (7CGDP)’ is expected to bridge the nation’s gas supply shortfall as an integral part of the gas development strategy. The project is designed by the NNPC to leverage the full potential of gas to meet the target of generating at least 15 gigawatts (GW) of electricity by 2020. The agreement includes the development of the 4.3 trillion cubic feet (TCF) Assa North/Ohaji South field, the development of the 6.4 TCF Unitized Gas fields (Samabri-Biseni, Akri-Oguta, Ubie-Oshi and Afuo-Ogbainbri) and the development of 7 TCF Nigerian Petroleum Development Corporation’s (NPDC) OMLs 26, 30 and 42.