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OPINION

Still On SEC And The Oando Case

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Oando finally responded to the Securities and Exchange Commission’s (SEC) Sunday, June 9, 2019 press release in which the Commission said it had given Oando sufficient opportunity of being heard and to rebut the issues revealed by the investigation.

The SEC, in its press statement claimed that “Oando PLC was given sufficient opportunity of being heard and accorded several opportunities to rebut the issues revealed by the investigation.”  The Commission further attested that those opportunities were via engagement with Deloitte & Touche in the course of its audit into the company’s business.

Oando’s response was extremely comprehensive, defining what fair hearing is, meticulously detailing all the instances it engaged with both SEC and the independent auditor Deloitte, Nigeria and explaining that day to day engagement in the course of an investigation is not the same as a fair hearing.

In Oando’s press statement published on June 19, 2019, it vigorously debunked SECs claims, stating that “Oando was not accorded a fair hearing because we simply co-operated with the process and responded to questions posed by the auditors in the course of their fieldwork for findings in a report that the Company has still not seen.”

The company implied that “a hearing can be said to be fair when all the parties to a dispute are given an opportunity to present their respective cases, and each side is entitled to know the details of the case/findings being made against it and is given an opportunity to reply thereto.”

The company goes on to highlight that it was not given the same opportunity to meet with the SEC as afforded the petitioner, despite multiple requests, one of which was the request addressed to the SEC by the Chairman, HRM Oba Michael Adedotun Gbadebo CFR, on August 24 2017, who wrote asking for a meeting to table concerns, before the commencement of the forensic audit.

In defense of Oando Plc, the Pragmatic Shareholders Association of Nigeria, an association of Oando minority shareholders had run a series of advertorials comparing SEC’s handling of Ecobank Transnational International to Oando and there were significant differences.  The differences included SEC inviting Ecobank Board Members to defend the findings of the forensic audit by KPMG but the same courtesy of defending or rebutting the findings of Deloitte Nigeria was never granted Oando PLC.

They also highlights that till date, Oando has not seen the forensic audit report despite repeated requests, while in Ecobank’s case, the audit report was delivered to ETI’s head office and its defense was incorporated in the final forensic report.

Further faulting the SEC’s processes, the shareholders association showed that an Administrative Proceedings Committee (APC) was not convened in the case of Ecobank, and therefore the regulator could not issue sanctions under its procedures while for Oando, the SEC did not have a functional Board and therefore was unable to convene an APC, nevertheless the SEC still issued sanctions.

In the light of the foregoing and the ETI case study, it would not be far-fetched to claim that the SEC has meted unfair treatment on Oando PLC and shown an unfair bias in its decisions and actions.  Further reinforcing the issue of bias, in the case of BGL, it took the SEC three years and 32 complaints between 2012 and 2015 against the company over misconducts relating to operations of their Guaranteed Consolidated Notes (GCN) and Guaranteed Premium Notes (GPN) before SEC finally took a decision to investigate BGL.  In the case of Oando, it took just one complaint before the SEC swung into action.  Oando has consistently reiterated its concerns that the SEC even took up this complaint as it was a petition from an indirect Oando shareholder.

Still on the BGL case, SEC had stated that in order to ensure investors obtained justice while also granting all parties a fair hearing, all parties were invited before the APC.

In the popular 2006 Cadbury case, SEC wrote to Cadbury expressing its concern on the issue of its 2005 financial report review after which it constituted an in-house committee, which investigated the matter of confirmed mis-statements of approximately N13 billion. SEC then invited the company executives to appear before the APC to explain why sanctions should not be imposed on them before it took action from the APC’s findings.

Using the two cases as examples, Oando asserts in its press statement that the “APC forum was rightly adopted by the SEC in the case of Mr. Olubunmi Oladapo Oni vs. Administrative Proceeding Committee & Securities and Exchange Commission (2014) N.W.L.R. (part 1424) 334; “The Cadbury Case”, the case of Afolabi Gabriel Oluwaseyi & 9 others vs. BGL Securities Limited & 22 others as well as in the case of the investigation of a certain financial institution”, therefore, it sees no reason not to be accorded the same hearing since other aforementioned parties were afforded opportunities to be heard before the panel prescribed appropriate punishments.

Weighing the actions of the SEC against Oando to the above listed companies, it is irrevocably clear that the regulatory body has shown bias against Oando.  Despite calls from all sides for SEC to readdress the situation and act as a fair and impartial regulator, SEC continues to turn a blind eye and not address some of the disturbing issues such as bias that are coming to light.  Instead, the Commission seems happy to go to court with Oando’s principals for the judiciary to decide on this matter.

  – Ashiru-Olabanjo wrote from Lagos, Nigeria

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