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HomeEnergyOando stocks lose N10bn to crisis

Oando stocks lose N10bn to crisis

The crisis rocking Oando Plc due to alleged corporate governance breaches has taken a toll on the firm’s stock value between September and October 20, 2017 when trading on the shares were suspended, costing shareholders about N10.193 billion of their wealth, investigations by New Telegraph have revealed.

Further checks by this newspaper showed that the unit share price of the oil firm also shed 12.4 per cent or 85 kobo, from N6.81 per share in last August to close at N5.99 per share last Friday.

This is despite the fact that investors of the most top oil and gas companies quoted on the nation’s stock market have recorded significant gains during the same period following expectation of an impressive third quarter results.

Trading in the shares of Oando had been halted on both the Nigerian and the Johannesburg stock exchanges following a directive by Nigeria’s Securities and Exchange Commission (SEC) to investors in the embattled oil firm.

Aside the technical suspension on the company’s shares, which took effect from 20 October 2017, the SEC also ordered for a forensic audit into the affairs of Oando Plc following a comprehensive review of the petitions Alhaji Dahiru Barau Mangal and Ansbury Incorporated over abuse of corporate governance and financial mismanagement.

Oando is quoted on the Nigerian Stock Exchange (NSE), the Johannesburg Stock Exchange (JSE) and Toronto Stock Exchange.

In its suspension notice, Tinuade Awe, General Counsel and Head of Regulation at NSE, said the full suspension is effective for 48 hours from last Wednesday to Friday, after which it would commence a technical suspension until further directive.

She also affirmed that in the 48-hour period, which commenced last Wednesday, there will be no trading in the shares of Oando Plc, adding that from last Friday, investors will be able to trade in Oando Plc’s shares, but such trading will not result in any movement in the price of the shares.

Some shareholders of Oando had commended SEC’s resolve to investigate allegation leveled against the management of the company.

National Coordinator, Progressive Shareholders Association of Nigeria, Mr. Boniface Okezie, said the SEC’s action will restore investors’ confidence in the capital market.

According to him, it is imperative that SEC investigate and make its observations public without delay.

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“All bottlenecks must be blocked. Thorough investigation is necessary. All decision must be made public,” he said.

Another shareholder, Chief Stephen Ozoloka, said the move by SEC has further given the needed impetus for the capital market to thrive based on its zero tolerance for infraction.

He noted that the prompt decision of the Commission to put on hold trading in the shares of Oando will guide against a possible run on the value of the shares of the company, which would have been detrimental to shareholders of the company in terms of value of their holdings.

He reiterated that by virtue of the SEC’s decision, hope had been further restored to the market.

“My hope is that the Commission should, however, be careful not to abuse its regulatory role. It should be firm in taking whatever decision once it concludes its findings,” he added.

President, Constance Shareholders Association of Nigeria, Shehu Mkail, also said it was a step in a right direction.

He noted that the recent events warrant the suspension.

“We have called SEC to take a drastic action on the prevailing issues and also called on SEC to ask for forensic,” he said.

“We would like to see that a well and proper forensic auditing is being conducted by a first class auditing firm and there should not be any interference by the management

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