Investors Bid 178m Units, As NSE Again Lifts Oando Suspension

For the second time in 48 hours, management of the Nigerian Stock Exchange (SE), on Thursday lifted the technical suspension placed on the share price of energy giant- Oando Plc
This once more enabled price discovery on the shares after 176 days of suspension, when the price was frozen at N5.99 each on the directive of the Securities & Exchange Commission (SEC), in what it said was to allow for forensic audit that was delayed by a string of litigations by the various stakeholders.
There was confusion during Wednesday’s session, when the suspension was lifted by the NSE, via a letter by Ms. Tinuade Awe, Executive Director, Regulations, on the order of the SEC. The lifting was reversed after the NSE said the SEC gave a counter directive to maintain status quo ante after just three hours, meaning that the price movement and shares traded during the period were cancelled.
By Thursday morning however, the NSE, once gain announced that the suspension had been lifted, “in the overall interest of investors in Nigeria’s capital markets, and following consultation with the Commission.”
According to the statement, “please be advised that at the start of trading, 12 April, 2018, trading in Oando’s shares will resume without any impediment in price movement consistent with the NSE’s market structure.”
Reacting, an obviously excited Ms. Ayotola Jagun, Chief Compliance Officer and Company Secretary of Oando Plc noted that “178m Oando shares were on bid with only 5.5m available for sale.”
Expectedly also, “the company’s share price hit the NSE daily price ceiling of 10% by 10.45am; further evidence that there is a lot of interest in Oando shares and that the general mood around the market and our shares is positive.”
She noted that the 176-day price-pause on Oando Plc, reflected “negatively on the credibility and competence of the country’s capital market regulators. It has also hit hard Oando’s over 270,000 shareholders, investors, partners, management, staff and everyone who owes their livelihood directly or indirectly to the company.
“The true beneficiaries of the technical suspension are in fact those large investors with substantial shareholdings who have the deep pockets and were able to take advantage of the state of affairs to buy-out the minority shareholders at a discount to the true value of the shares, whilst also creating a black market for the company’s shares. Shareholders were denied the opportunity of benefitting from Oando’s positive performance and gains spurred by higher crude prices over the last months six months,” she added.
Commenting on the lifting of the technical suspension, Bismark Rewane, managing director of Financial Derivatives said: “The way we handle these matters also sends a clear signal to potential, existing and international investors that this market is transparent, accountable and is there to protect all interests and not to be used for punitive purposes.”
He urged market regulators to learn from their mistakes in handling the Oando issue to avoid a repeat in future and that the commission should commit the resources needed to conclude the forensic audit on Oando as the market cannot wait indefinitely.
Meanwhile, the management of Oando said the forensic audit into the affairs of the company by Deloitte Nigeria (Deloitte) is ongoing, assuring that its management “has been fully cooperative with both the SEC and Deloitte.
“In the spirit of goodwill, transparency and full disclosure, we will continue to cooperate with the SEC and its nominated parties in the discharge of their duties as the Capital Markets regulator during this exercise,” Oando added.
Also, Oando is set to publish its audited financials for the year ended December 31, 2017 in the coming weeks. But according to the Q3 score-card, the company declared a profit after tax of N7.1bn for the period ended September 30, 2017.
The company also noted that it reached an amicable settlement with Alhaji Dahiru Mangal, one of those who petitioned the SEC alluding to regulatory and governance infractions against the management of Oando Plc.
Another icing on the cake was the recent announcement of a consortium consisting of Oando PLC and OilServe Limited by the Nigerian National Petroleum Corporation (NNPC) announced as one of the awardees of the Engineering, Procurement, Construction (EPC) mandate for the construction of gas pipelines from Ajaokuta to Abuja. This part of the Ajaokuta-Kaduna-Kano Pipeline and a section of the Trans-Nigerian Gas Pipeline under the gas infrastructure blueprint. It was designed to enable the industrialisation of the Eastern and Northern parts of Nigeria, while also enabling connectivity between the East, West and North, which is currently non-existent.