Over 100 shareholders of the troubled Oando Plc on Tuesday submitted a petition to the National Assembly alleging corporate governance abuse, mismanagement and gross misconduct by its Group Chief Executive, Wale Tinubu.
The petition, addressed to the Chairman, House Committee on Capital Market and Institutions, was signed by the 100 aggrieved shareholders with a demand that the Wale Tinubu-led management of the beleaguered company be sacked and made to account for their alleged misdeeds.
This is just as shareholder groups across Northern Nigeria held a mass protest in Asokoro area of the Federal Capital Territory calling on regulators to protect the interest of shareholders and save Oando from collapse. Speaking on behalf of his colleagues, the National Coordinator of Trusted Shareholders Association, Mukhtar Ismail Mukhtar, who led the protest, said the company’s external auditors report on page 64 of the 2016 annual report is enough ground for relevant authorities to act.
Presenting the petion to the Chairman of the House Committee, Honourable Tajudeen Yusuf, through his deputy Hon. Tony Nwuta; leader of the 100 shareholdrs, Ambassador Olufemi Timothy decried failure by the Securities and Exchange Commission (SEC) to act in the interest of shareholders.
The petition, which was made available to newsmen reads: “We are compelled by the interest of our investments in Oando Plc to write to you for your intervention in the corporate governance challenges and allegation of gross mismanagement of resources in Oando Plc.
“We have observed for three good years now that the financial operations of Oando Plc was of worrisome critical matters that affect our investment.
“No dividend was paid since 2013 financial year. Critical financial management concern on our investment areas follows:
“External auditors of Oando Plc reported strong doubtful going concern of the group annual financial statement.
“The group has negative working capital of over N263billion with current liabilities exceeding current assets.”
The petition further stated that the management of Oando was unable to service its financial obligations.
“The group has accumulated losses of over N159 billion in its balance sheet as at 2016 year end.
“The claim 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 have not get a dime as cash dividend. No hope of redeeming these reserved 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 succeeds.
“Cost of litigations is very high. Litigation has damaging consequence on our company’s reputational risk under the current management,” the petitioners said. They also accused the Management Oando Plc of increasing entitlements and remunerations of directors and top managent staff despite the company’s precarious financial condition.
The company’s managers, the shareholders further alleged, have been disposing of the company’s assets to service its huge debt.
“Management had been selling assets of the company, especially money-spinning assets such as downstream (Marketing) businesses without meaningful improvement in debts situation.
“It is planning to sell its share in OER which unfortunately is the last asset belonging to the company.
“We note that all actions were not enough to fully repay the outstanding debts.
“Management closed the year 2016 with consistent loss of over N768 billion; significantly worse than the year-end 2015.
“The net loss for the year from continuing operations in 2016 amounts to N25.8billion as reported in the annual audited financial statement.
“We wish that you use your good offices, as a matter of urgency to save our investment in Oando Plc by looking into these matters, and cause an action to intervene in Oando Plc by removing the present management to allow for proper investigation of the corporate governance abuses and financial mismanagement as noticed in the published full year audited financial statement.
“Sir, we believe in the interest of fairness, justice and equity, the CEO, Mr. Wale Tinubu must vacate his seat to allow for proper investigation of all these allegations, corporate governance abuse and financial mismanagement. An independent new management must step in to save our investment in the interest of the integrity of the capital market and investor’s confidence.”
The Committee, which had earlier met with the Director General of the Securities and Exchange Commission (SEC), Mounir Gwarzo, assured the aggrieved shareholders that the committee would look into their complaints.
“I assure you that we will look thoroughly into your complaint and ensure that all shareholders are duly protected,” Nwuta said.
The Committee gave the SEC Director-General two weeks to respond to the crisis rocking Oando.
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