The face-off between the Securities & Exchange Commission (SEC) and management of Oando Plc assumed a new but expected dimension on Monday, with Jubril Adewale Tinubu and Omamofe Boyo, Group Chief Executive and deputy, respectively of the company seeking protection from the Federal High Court in Lagos.
Analysts, however, also agree that the ousted Oando Plc executives may be right in arguing that the commission’s claims are “unsubstantiated” and seek to protect their livelihood and investment, just as the SEC has the duty to perform its role of policing the capital market from any form of abuse
However, we believe and indeed had expected that the Oando Plc management should have approached the Investment and Securities Tribunal (IST) to clear themselves of the SEC’s allegations.
But then, they may also be thinking, like many, that the IST is not structurally autonomous from SEC itself and cannot guarantee structural fair hearing, thereby violating the principle that a person cannot be judge over his own cause.
The IST is empowered, to the exclusion of any other court of law or body in Nigeria, exercise jurisdiction to hear and determine any question of law or dispute involving:
(a) a decision or determination of the Commission in the operation and application of this Act, and in particular, relating to any dispute:
(i) between capital market operators;
(ii) between capital market operators and their clients;
(iii) between an investor and a securities exchange or capital trade point or clearing and settlement agency;
(iv) between capital market operators and self-regulatory organisation;
Unlike the current situation where the ongoing litigation process at the Federal High Court may linger endlessly for the next one year, the IST law requires that such case would have been dispensed within 90 days, or three months.
This move by Oando Plc’s estranged management team may nonetheless be a design to buy time, because, at the end of the day, the high court may likely refer the case to IST for final judgment.
Yes, all these may not affect the company’s operation significantly, due to the nature of its business. Recall that Oando Plc’s initially planned to increase its shares outstanding before the unfolding events, given that the SEC would not have approved such.
We agree and applaud the Nigerian Stock Exchange (NSE) management for not placing the stock on technical suspension is good, as it will allow investors trade their decisions because any attempt to stop trading on the stock will further harm the company and its investors.
The interim management by SEC, headed former Shell Petroleum Development Company managing director, Mutiu Sunmonu, we believe, will boost investor confidence in the company, considering the undervalued state of its stock.
While we look forward to the transition to new management at the July 1, 2019, extraordinary general meeting ordered by the commission, we expect that the real health status of the company will become glaring in the not-too-distant months.
Above all, we wish to reiterate our previous warning that investors should trade Oando Plc shares with caution, while developments continue to unfold.