Oando v SEC: Legal fireworks begin June 24

Wale Tinubu

Oando Group Chief Executive Officer, Wale Tinubu

Sacked Oando Group Chief Executive Officer, Wale Tinubu.
Akin Kuponiyi

Legal fireworks will begin on June 24 between sacked Oando directors, Jubril Adewale Tinubu and Omamofe Boyo and the Securities and Exchange Commission(SEC).

Tinubu and Boyo are fighting to retain their control of the oil company after SEC appointed an interim management headed by Mutiu Sunmonu, a former head of Shell Nigeria.

Justice Ayokunle Faji of the Federal High Court gave the date to hear the arguments by all the parties.

SEC has filed preliminary objection as well as counter-affidavit against the fundamental rights enforcement suit which Tinubu and Boyo, as applicants filed against it.

In the preliminary objection, SEC urges the court to dismiss the suit on several grounds: lack of jurisdiction, non-compliance with condition precedent prescribed by the investment and Securities Act, no, 29, 2007 for instituting an action against the respondent and failure to exhaust administrative remedy available.

SEC lawyers will argue that the suit by the sacked Oando directors is incompetent and an abuse of the process of the court.

“The entire action is frivolous, vexations, malicious, tantamount to forum shopping, an abusive use of the processes of the court, with the aim of interfering with the SEC’s discharge of regulatory duties and responsibilities”, SEC said.

Omamofe Boyo: also banned for five years from being director of a quoted company

SEC is the statutory regulatory body for the capital and securities market in Nigeria and a body charged with the responsibility of safeguarding the interest of the shareholders, investors, creditors and the public in order to maintain the stability of the capital market ​ and by extension the economy of the Country as a whole.

SEC’s counter affidavit filed by litigation Manager, Mr Mike Oko from the Law firm of PUNUKA Attorney & Solicitors and filed before the court by Chief Anthony Idigbe SAN, leading six other senior lawyers, restated SEC’s powers an outlined the genesis of the SEC-Oando conflict.

SEC received a petition dated 4th day of May 2017 from Alhaji Dahiru Bara’u Mangal, a shareholder of Oando complaining about Oando Plc management.


Mangal’s concerns pinpointed the risk regarding the going concern of Oando Plc as raised by the external auditors in the 2016 audited financial statement of the company, negative working capital position of the company as highlighted by the external auditors and increase in director’s remunerations despite the poor operating result of the company

SEC also received another petition dated 2nd May 2016 from Ansbury Investment INC, a company which holds majority shares in Ocean and Oil Development (BVI) which also has 99% shares in OOOP Nigeria which in turn is the majority shareholder in Oando Plc by holding 56% of the shares of Oando.

Ansbury Investment INC’s Petition was premised on lack of adherence to corporate governance and other failures/violations of the company thereby the raising the following red flags:

*​Strong uncertainty regarding the going concern status of Oando group based on disclosures in the 2015 and 2016 audited financial statement of the company;

*​Posting of consistent losses from continuing operations amounting to N34.9billion in 2015 and 25.8 billion in 2016.

*The profit of N3.94 billion reported in 2016 was solely attributed to the consistent sale of part of assets of the group;

*Negative working capital position;

*Huge debt position that could be further worsened by pending legal suit that could lead to loss of N608.2billion and price adjustment inherent in the sale of downstream business;

*​Current liabilities as at December 31st, 2016 exceeding the current asset by 263.7 billion, confirming serious financial imbalance from the previous financial year amongst others.

SEC after receipt of the petitions, the affidavit stated, caused same to be forwarded to Oando Plc under the leadership of the applicants and other principal stakeholders for their response.

Oando Plc responded to the petitions vide its letter both dated 24th day of May 2017.

SEC thereafter dealt with the petitions on the merit as it was established that Alhaji Dahiru Mangal is a shareholder while the petition of Ansbury Investments Inc was treated as whistle blowing having established that it has an interest in Oando Plc.

Following the complaints and responses received from the SEC on behalf of Oando Plc, SEC conducted an investigation which revealed several weighty findings bothering on insider dealing, misleading information contained in the financial statements of Oando Plc, related party transactions, shareholding structure of Oando Plc.

The report of SEC was communicated to the Oando Plc vide a letter dated 17 October 2017 wherein Oando Plc was also notified of the constitutions of a neutral consortium of experts to further investigate the matter.

Furthermore, SEC in a bid to protect the interest of all investors, the public, the shareholders, the company itself and avoid panic in the market and dumping of shares of Oando Plc, placed the shares of Oando Plc on technical suspension pending the full outcome and completion of the investigation afore mentioned.

However, Oando instituted suit No: FHC/L/CS/1601/17; Oando Plc v, SEC & Anothe in order to challenge the SEC technical suspension of Oando Plc shares and the forensic audit exercise on Oando Plc.

Oando Plc also obtained an interim order of injunction restraining the SEC and Nigerian Stock Exchange NSE from implementing the technical suspension of trading in Oando Plc shares and intended technical suspension pending the hearing of the interlocutory injunction.

The suit No: PHC/L/CS/1601/17; Oando plc v SEC & Anor was later struck out for lack of jurisdiction by Justice Alkawa J. on the 23rd of November, 2017.

Oando Plc filed an appeal against the decision of Justice Aikawa J. at the Court of Appeal. However, the appeal was compromised by term ​ of settlement entered between the parties wherein the SEC agreed to lift the technical suspension of Oando Plc shares and commence the forensic investigation of Oando Plc, whilst the said appeal against the ruling of Justice Aikawa J. was withdrawn.

Following the compromise of the appeal filed by Oando Plc, and upon Oando Plc, insistence, SEC disengaged the consortium and retained the services of Akintola Williams Delotte (“Deloitte & Touche”) as the sole auditor to carry out a comprehensive forensic audit into the financials of Oando Plc whilst Oando Plc undertook to cooperate with the auditors in the course of the exercise.

Delotte & Touche held fact-finding discussions, consultations and walkthroughs with key personnel of Oando Plc including the applicants in the course of the forensic audit which spanned over several months and in the circumstances exchanged several email correspondences.

Deloitte & Touche during the period of consultations and fact-finding discussions engaged in detailed interactions with several internal and external stakeholders on Oando Plc, including the Applicants.

Deloitte & Touche met with SEC on three different occasions to with, 25th April 2018, 30th October 2018 and 1st November 2018 in order to seek explanation and clarification with respect to the records of Oando Plc that were being subjected to forensic audit and the 1st Applicant Jubril Adewale Tinubu involvement thereof.

Deloitte & Touche met the 2nd Applicant Omamofe Boyo on Seven different occasions to wit, 29thMarch 2018, 08th May 2018, 30th July 2018, 9th August 2018, 19thSeptember 2018, 10thOctober 2018 and 1stNovember 2018 in order to seek explanation and clarification with respect to the records of Oando Plc that were being subjected to forensic audit and the 2nd Applicants involvement thereof.

The Applicants were invited and fully participated in the forensic audit exercise carried out by Deliotte & Touche and given the opportunity to make explanations and clarification with respects to the account of Oando Plc under their management furthermore, Deloitte & Touche also had discussions and consultations with other key stakeholders of Oando Plc during the course of the forensic audit exercise before reaching its findings which findings were duly communicated to the Applicants and other Management staff of Oando Plc by letter dated 31st May 2019.

That part of the decisions reached by the SEC after hearing the Applicants, the company and other stakeholders are as follows:

​ ​*Resignation of the affected Board members of Oando Plc

​ ​*The convening of an Extra-Oridnary General Meeting on or before July 1, 2019 to appoint new directors

*Payment of monetary penalties by the company and affected ,individuals and directors

​ ​*Refund of improperly disbursed remuneration by the affected Board members to the company

​ ​*Barring of the Group Chief Executive Officer (GCEO) and the deputy group Chief executive Officer (DGCEO) of Oando Plc from being directors of public companies for a periods of five (5) years,

That throughout the investigation carried out by the SEC, the Applicants were duly informed of allegations of wrong doing as contained in several petitions lodged against same and Oando Plc and they were all given the opportunity to give explanations and clarifications with respect to the said allegations and at the conclusion of the investigation exercise, the SEC by letter dated the 31st May, 2019 informed Oando Plc and its officers concerned of the outcome of the investigations exercise following which the SEC duly communicated its decision thereof.

Following the directive issued against the Applicants and other Directors of the Company the SEC appointed the 2nd Respondent Mutiu Olaniyi Adio Sunmonu as the head of the interim management of Oando Plc pending the appointment of a new board.

That two of the affected directors Chief Sena Anthony and Mr Oghogho Akpata of the Oando Plc have resigned accordingly.

That the decision of the SEC is meant to protect the investing public and preserve the sanctity of the capital market.

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The findings from the investigation were as follows:


There were several corporate governance lapses stemming from poor Board oversight. These include irregular approval of Director’s remuneration, Director’s participation in matters in which they had declared interest, unjustified disbursements to Directors and management of the company, failure of the Audit committed to hold meetings with management, internal auditors and external auditors.

FAILURE OF INTERNAL CONTROLS ​: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Oando Plc failed to establish an effective system of internal controls as required under section 61 of the ISA 2007, over its financial reporting thereby compromising the integrity of the company’s financial controls and reporting as revealed by the misstatements In the financial statements, high number of related party transactions and unjustified disbursements to directors.


​ In 2013, Oando Plc reported the sale of its subsidiary, Oando Exploration and Production Limited (OEPL) to Green Park Management Limited without obtaining the approval of the ​commission, (In violation of the provisions of the Investment and Securities Act (ISA 2007) and the consent of the minister of petroleum (as required under the Petroleum Act, 1969).

​The purported sale of OEPL enabled Oando Plc to report a profit instead of a loss, thereby misstating its financial statement in 2013 and 2014 and consequently misleading investors. This “Fictitious” profit reported in 2013 enabled “Oando Plc to declare dividends.

​The 2013 misstated accounts and quarterly reports of Oando Plc were included in the 2014 rights circular, thereby misrepresenting the financial status of the company to the public in violation of section 64 of the provisions of the ISA 2007.


​In 2012, 2013, 2014 and 2015, certain insiders of Oando Plc sold shares of the Company during “ Closed periods” despite having knowledge of active closed periods by the company and contrary to the Rules of the NSE. The insiders include Ocean and Oil Investment Limited (OOIL-represented by Jubril Adewale Tinubu and Godwin Omamafe Boyo, Ocean and Oil Development Partners OODP represented by Jubril Adewale Tinubu, Godwin Omamofe Boyo, Francesco Cuzzocrea, and ECP African Fund II. PC ( a company in which Nana Appiah- Korang was director)


​ OODP, the major shareholder in Oando Plc represented by Jubril Adewale Tinubu, Godwin Omamofe Bayo and Francesco Cuzzacrea authorized the sale of 1,210,000.000 units of OODP share in Oando Plc valued at N21,455,909,256. The trades took place between January and October 21, 2015 preceding the release of the 2014 audited financial statements on October 23, 2015 in which Oando Plc declared an unprecedented loss of N183 billion, during this period. These representatives of OODP were insiders of Oando Plc and had access to material non-public information regarding the poor financial status of the company commencing December 2104, in violation of the provisions of the ISA 2007 regarding insider dealing.



Oando Plc was involved in several related party transaction linked to key board members particularly Jubril Adewale Tinubu and Godwion Omamofe Bayo. Some of the related party transactions were not disclosed in the company’s 2012 and 2014 financial statements. However an impression was created in the 2013 and the 2015 financial statements that these disclosures had been accurately reported.


In 2014, Oando Plc paid interim dividends when the company was facing liquidly constraints.


Oando Plc Failed to fully comply with the SEC Code of Corporate Governance for public companies. The company falsely indicated full compliances with the code in its Annual Reports for 2012 and 2013


Alhaji Dahiru Baru’u Manga failed to disclose his substantial ownership in Oanda Plc as required by CAMA similarly, Oando Plc failed to notify the Nigeria stock exchange (NSE) of his shareholding of 5% and above as required by the rules of the NSE



​ Oando Plc deducted an amount representing 24% of the dividend paid to shareholders in 2014 as withholding tax, this exceeded the statutory requirement of 10% as required by the companies income Tax Act (CITA)

​ ​Oando Plc failed to comply with several tax laws such as Companies income Tax Act value added tax act, etc


In view of the above violations the commission hereby directs as follows:

1.​ ​a ​ Oando Plc to pay the sum of ​ N8,450,000 to the Commission for publishing untrue statement in its 2012 Financial statements in violation of rule 3 (4) of the SEC Rules and Regulations, made pursuant to the ISA 2007

b.​ ​ N7,850,000 to the commission, for publishing untrue statements in its 2013 Financial statement, in violation of Rule 3 (4) of the Sec Rules and Regulations, made pursuant to the ISA 2007

c.​ ​ N42,750,000 to the commission , for non- disclosure of related party transactions in its 2012 Financiam statement in violation of rule 39 (1&7) of the SEC Rules and Regulations, made pursuant to the ISA 2007

d.​ ​ ​₦30, 625, 000 to the commission, for non-disclosure of related party transactions in its 2014 Financial Statements, in violation of Rule 39 (1 & 7) of the SEC Rule and Regulations, 2013, made pursuant to the ISA 2007.

2. The under listed Directors of Oando Plc shall immediately refund to Oando Plc, the total sum of ₦145, 767, 316 (One Hundred and Forty-five Million, Seven Hundred and sixty-six Thousand, Three Hundred and Sixteen Naira, Only) being remuneration and other benefits paid to them above the provisions of the Board Charter.

Akinrele Ademola -N24,351,158

Ammuna Alli -N11 950,000

Engr. Yusuf Njie- N3,115,000

Ike Osakwe- N24,351,158.

Oghogho Akpata -N28,975,000

Tanimu Yakubu -N24,000,000

Chief Sena Anthony -N11,250 000

Oba Adedotun Gbadebo -N20 000,000

Total – N145,767,316.00

3. In view of the Gravity of the corporate governance lapses and internal control failures observed in the company, every person who sat on the board of the company when the failures occurred to wit:HRH. Oba Michael Adedotun Gbadebo CFR, Mr. Mobolaji Osunsanya , Mr. Olufemi Adeyemo, Mr. Oghogho Akpata, Chief. Sena Anthony and Mrs. Ammuna Lawan Alli OON,Should resign his/her position from the board of Directors of Oando Plc, failing which such person would be barred from serving as a Director in any public company for a period of five (5) years.

Oando Plc should convene an Extra –Ordinary General Meeting (EGM) on or before July 1, 2019 to appoint new directors and articulate remedial measures for the observed corporate governance lapses.​

4. For Certification of untrue statements of material facts in the 2013, 2014 and 2015 financial statements of Oando Plc in violation of Section 60 (2 (b) (ii) of the ISA 2007, Mr. Jubril Adewale Tinubu (Group Chief Executive Officer) and Mr. Olufemi Adeyemo (Chief Financial Officer) are ordered to pay the sum of N91,125,000 (each) to the Commission

5. Mr. Jubril Adewale Tinubu and Mr. ​ Godwin Omamofe Bayo are hereby barred from being directors of public companies for a period of 5 years for improper conducts in managing the affairs of Oando Plc to wit: market abuse, related party transactions not conducted at arm’s length, misstatements in financial statement and inaccurate disclosures in the financial statements of Oando Plc

6. All monetary penalties referred to in 1. above, should be paid to the Commission immediately.

Consequently, the Capital market regulator SEC is urging the court to dismiss the suit of the applicants with substantial cost for lacking In merit, as the applicants are not entitle to the grant to any of the reliefs been sought.

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