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More shareholders fault Emir Sanusi’s intervention in Oando crisis

Uche Usim, Abuja

Thousands of Nigerian shareholders have advised the Emir of Kano, Muhammadu Sanusi, to desist from interfering in the planned forensic audit of Oando Plc,  saying the move was capable of eroding investors confidence in the capital market.

They insisted on getting to the bottom of the company’s crisis as the matter was of great interest to Nigeria and the international community.

The shareholders, who spoke on the platform of Proactive Shareholders Association of Nigeria (PROSAN), said it was of paramount importance for the Emir to steer clear of the matter in order not to thwart due process.

Speaking on behalf of the group, on Monday, in Lagos, National Coordinator of (PROSAN), Taiwo Oderinde, said: “Regulators should do their job without any fear or favour. This is a quoted company for goodness sake. A company guided by rules and regulations”.

He added, “What are we trying to tell the world? There is an audited report already. The report is in the public space. The management of Oando went to court and lost. The next logical thing is for auditors to continue with their job. Anything outside this process will rubbish the Nigerian capital market.

“As shareholders, we will not allow that to happen. We wrote to the National Assembly. The House of Representative ordered the Securities and Exchange Commission (SEC) to investigate. Investors are watching. We will resist anything outside due process.

“Why are they doing everything possible to stop the process? We should stop portraying ourselves this way. The auditors must conclude their job. That is the only way forward”.

PROSAN’s position is coming less than one week after the Oando Shareholders Solidarity Group (OSSG) explained that  the intervention of Emir Sanusi in the face-off between the company and one of its aggrieved shareholders cannot stop a forensic audit planned by the regulator (SEC). The audit is scheduled to start before the end of this month.

Meanwhile, the Truth and Transparency Initiative insisted, at the weekend, that the reported peace deal, “has nothing to do with agitations and protests of legitimate shareholders of Oando Plc”.

The group in a statement issued by its Co-ordinator, Nnodu Okeke, said: “The attention of has been drawn to a news report that the Emir of Kano, His Highness, Muhammadu Sanusi11, brokered a peace deal between one of the shareholders of Oando Plc, Alhaji Dahiru Mangal, and the management of the company, as a result of which Alhaji Mangal withdrew his petition to SEC against the company.

“Let us state emphatically, and for the avoidance of doubt, that the said peace deal has nothing to do with agitations and protests of legitimate shareholders of Oando Plc and the public at large over the mountainous infractions and illegalities against which the management of Oando Plc stands charged.

“For one, Oando Plc is a Public Liability Company and what happens to the company and how regulatory authorities respond thereto goes a long way to the manner investors, especially foreign ones, will view their participation in doing business in Nigeria.

“We have been in this business of Oando Plc as well as several other shareholders on our call that justice be done in respect of the malfeasance committed by the management of Oando Plc, and that the right thing be done so that  investor’s confidence be restored and also that other shareholders of the company get justice. Therefore the said peace deal has not affected the issue on ground.

“SEC, on its own, after investigations, pointed out some infractions in the company and came to the conclusion that a forensic Audit was necessary in the company.

“Only heaven knows why Oando Plc management has been fighting against a forensic audit being conducted in the company.

“We insist that the forensic audit should be carried out in the manner stated by SEC.

“We believe, as shared by other shareholders, that for effective forensic audit, especially following due and international practice, it is necessary that the present management of Oando Plc should step down.

“The reasons why the peace deal between Alhaji Dahiru Mangal and the management of Oando Plc has not affected our position and that of other shareholders are as follows:

“The petition to SEC against the management of Oando Plc bordered on alleged gross misconduct and financial mismanagement in the company.

“Other shareholders and the investing public are concerned and are stakeholders in seeing that  appropriate  and  legal actions are taken in the whole scenario.

“The issues involved border on corporate governance which must be addressed appropriately.

“Some of the serious allegations by other shareholders over the going concern of Oando Plc are as follows:

“Oando Group has accumulated losses of over N159 billion in its balance sheet as at 2016 year end.

“The claims of creditors is higher than the owners, shareholders equity, meaning that the group could be liquidated by the creditors anytime if urgent action is not taken.

“With accumulated losses of over N159 billion, shareholders could not get a dime as cash dividend and there is no hope of redeeming these losses.

“Court cases as projected by the management may take claims of over N608 billion which is far greater than the assets of the entire group, meaning that the group is at a very high risk of liquidation if the court cases against the company succeed.

“Cost of litigation is very high. Litigation has damaging consequences on the company’s reputational risk under the current management.

“The management was increasing their entitlements and remunerations despite lack of working capital.

“Both current liabilities and long term liabilities stood at over N799 billion.

“The management was selling assets of the company, especially money-spinning assets such as downstream (marketing) business without meaningful improvement in debt situation. The management was planning to sell its share in OER.

“Loss of shareholding value which stood at N159 billion.

“Financial statements of independent auditors of the the company put the existence of the company in serious doubt. The independent auditors of the company had no kind words on the manner of the running of the company. They stated in their report as follows:

“We draw attention to Note 45 in the financial statements, which indicates that the company reported a comprehensive loss for the year of N33.9 billion (2015: loss N56.6 billion) and as at that date, its current asset exceeded current liabilities by N14.6 billion (2015: N32.8 billion net current liability). The Group reported a comprehensive income of N112.4 billion for the year ended 31 December 2016 (2015: loss N37.8 billion) and as stated in the note, these conditions, along with other matters, indicate that a material uncertainty exists that may cast significant doubt on the company (and Group’s) ability to continue as a going concern”.

He insisted that the peace deal has not addressed the above issues, adding that “We insist that SEC should do the needful”.

He added: “We further insist that the National Assembly should carry on with its investigation, especially ensuring that the forensic audit of the company is fully and effectively carried out.

“The current management of the company should step down to ensure a clear, transparent, effective investigation and audit of the company”.

 

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