Why Oando’s Settlement with SEC is probably the best thing that has Happened to it in Years
In May 2019, something rather unexpected happened – the regulatory hammer of Nigeria’s Securities and Exchange Commission (SEC) fell heavily on Oando Plc, an indigenous energy company operating in the upstream sector. Among the issues raised against Oando were serious infractions ranging from false disclosures, market abuses, and other gross corporate governance lapses.
To this end, the apex capital market regulator recommended the immediate resignation of Oando’s Group Chief Executive Officer, Wale Tinubu. Other top executives were also barred from holding any board appointments for five years. More so, the company’s Annual General Meeting (AGM) was indefinitely suspended by SEC, thereby preventing the company from passing important resolutions.
Although the company hasn’t been able to hold its AGM since then, the recommended resignations never happened. This is because Oando fiercely fought back against SEC, describing the regulator’s allegations as false and its recommendations as pointless.
Ever since these events unfolded, there has been several lawsuits mostly filed by Oando Plc. In June 2019, the company scored its first major win in the battle when a Federal High Court in Lagos issued an injunction restraining SEC from sacking the company’s CEO and inaugurating an interim management team. But the battle between the company and the regulator didn’t stop there… until now.
On Monday July 19, 2021, Oando Plc issued a corporate action announcing that it has entered into a settlement with SEC. As the company explained, “both parties believe that a settlement is the most appropriate course of action and one that is in the best interest of the Company, its employees, shareholders as well as the capital market. Specifically, the settlement reached by the parties seeks to prevent further market disruption and harm to Oando Plc’s shareholders.”
The protracted dispute, which lasted for approximately two years, was understandably one of the worst things that happened to Oando in recent times. After all, no company wants a regulator’s hammer coming down hard on it for any reason. Good thing, though, is that the company now understands this and is now willing to do whatever it takes to forestall possible future reoccurrence of such disputes. Part of the statement by the company admitted this when it said:
“This has been an extraordinary time in the life of the Company and a defining moment in its relationship with the regulator. The Company recognizes and respects the authority of the Commission and will continue to comply with the Investments and Securities Act 2007, and the Rules and Regulations made pursuant thereto, while always acting in the best interest of all its stakeholders.”
Following the settlement, Oando directors can now fully focus on running the company’s affairs without the fear of SEC constantly hanging over them. Also, the company’s AGM, which had been suspended until now, may finally happen. Meanwhile, Business Elites Africa understands that as part of the settlement, Oando Plc will still have to pay all the monetary penalties that were imposed on it by SEC back in May 2019.
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