The questionable suspension of SEC DG

By Lakinbofa Goodluck

For the most part of the second half of the year Oando Nigeria Plc has been in the news for the wrong reasons. The company has been embroiled in a major crisis that has culminated in shareholders, who are visibly unhappy, calling for the resignation of the Group Chief Executive Office (GCEO), Wale Tinubu. The major public display of dissatisfaction was at the Annual General Meeting (AGM) of the company where the shareholders protested against the management and stalled proceedings for few minutes. Not stopping there, the shareholders have done well in spreading their message to relevant quarters including the National Assembly, Securities and Exchange Commission, SEC, and the Nigerian Stock Exchange. In actual fact, without their activities not many would have known the true state of affairs with Oando Nigeria Plc.

Just like a responsible regulator would react, an investigation was conducted into the company and the Securities and Exchange Commission (SEC)discovered that the company had breached the corporate governance code among other preliminary findings. Consequently, SEC suspended the trading of Oando shares on the floor of the Nigeria stock exchange and instituted a consortium of experts to carry out a forensic audit on the company. In a rather strange and audacious manner Oando Nigeria Plc sued SEC for its actions with an attempt to stop the forensic audit. But the Federal High Court ruled in favour of SEC paving the way for the forensic audit. While observers were waiting patiently for the commencement and eventual outcome of the audit, the unexpected happened last week; what can be best described as adramatic demonstration of “corruption fighting back.”

The Director-General of the Securities and Exchange Commission was suspended by the Minister of Finance, Kemi Adeosun for allegations of financial impropriety. The DG was accused of paying himself severance package while in service. The suspension came as a surprise to observers who have followed the strides of Dr. Munir Gwarzo since he assumed office, more so that the petition upon which the Minister claimed to have acted was tendered 10months ago. A leading online newspaper reported that the minister suspended the DG in order to protect Oando Nigeria Plc from being investigated. She had asked the DG to stop the forensic audit and set up a panel that will recommend a fine for the company to pay. These allegations against the minister are too weighty to be ignored.

Nothing can be more shameful and embarrassing than having a federal minister serve as the minder for a public quoted company that has been accused of breach of corporate governance and other infractions. This is exactly why Nigeria has refused to grow beyond the level it is currently. It is disgusting that every time an individual attempts to change the pattern of things in Nigeria his/her efforts are always frustrated by the powers that be. This is not the social contract Nigerians signed with their leaders and those that have been entrusted with responsibilities to lead the nation.

In the words of Professors Niyi Osundare, “Nigeria is a kleptocracy. Corruption is Nigeria’s fastest growing industry. If Nigeria does not kill corruption, corruption will kill Nigeria”. Both President Muhammadu Buhari and the Vice President Yemi Osibanjo have regurgitated this statement with other pronouncements against corruption, but the actions of officials of the government point to a different direction. Corruption should be fought headlong in every sector of the economy including the private sector. The desperation on the part of Oando Nigeria Plc simply suggests that the company has something to hide. Why is it difficult for the company to open its books for a forensic audit?

This shows how entrenched and established corruption has become in our nation. No one is absolving the SEC DG of impropriety; the only worry is why allegations of financial impropriety are being discussed now. The petition in question was said to have been written 10 months ago and according to newspaper reports the minister did not take action because she wanted to confirm the veracity of the allegations. Now if she has confirmed the veracity of the allegations, why set up an administrative panel to investigate the matter again? Why not just allow the anti-corruption agencies to do their job? If it is true that the Minister has acted to protect Oando Nigeria Plc from being investigated then Nigeria is in a major mess. Soon our private sector will become notorious for the same corruption we accuse the public sector of. And eventually, every facet of our national life will become characterised by corruption. May be our leaders are not aware that Nigeria is gradually becoming a synonym for corruption and until we take steps to arrest the matter, we will become the exemplificationof corruption. The President must intervene at this point to urgently investigate the allegations against the Minister and if it is true that she has acted in bad faith, she has lost every moral license to continue as a minister of the Federal Republic of Nigeria.

This is a clear distraction aimed at suppressing the main issue, which is that Oando as a company cannot survive as a going concern. “We are drawing 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, it’s curent assets exceeded curent liabilities by N14.6 billion (2015: N32.8 billion net curent liability). The group recorded a comprehensive income of N112.4 billion for the year ended December 31, 2016 (2015: loss N37.8 billion) and as at that date, it’s curent liability exceeded current assets by N263.8 billion (2015: N260.4 billion). As stated in the notes, these conditions, along with other matters, indicate that a material uncertainty exist that may cast significant doubt on the company (and Group’s) ability to continue as a going concern.” This is major disturbing issue that must be addressed by relevant authorities and every concerned stakeholder.