Shareholders insist SEC has powers to hire, fire board of listed firms

Urge suspension on Oando shares, opening of forensic findings
Capital market shareholders have unanimously agreed that the Securities and Exchange Commission (SEC) has the over-riding powers to hire and fire board members of listed companies involved in any form of market infractions to safeguard investments.

The shareholders, who spoke on the recent directive from the SEC, mandating the Chief Executive Officer of Oando Plc, Wale Tinubu and other board members to resign their positions, insisted that the apex market regulator have the powers as encapsulated in the Companies and Allied Matters Act (CAMA) to order the resignation or sack of any chief executive involved in fraudulent activities.

Besides, the shareholders also urged the Nigerian Stock Exchange (NSE) to suspend trading on the shares of the company to avoid massive dumping from investors.Specifically, the former Secretary-General of the Independent Shareholders Association, Adeleke Adebayo, said: “Asking if SEC has the power to fire is like asking if CBN can sack any bank chief and we know about the last one that happened after the consolidation.

“SEC has the right, as the apex regulator, to hire and fire board of listed firms if there are infractions and enough weighty evidence to prove that it happened. This is not the first time SEC is wielding its big stick on board members of quoted companies.

“In the case of Oando, the commission had enough time to investigate it and forensic audit was also conducted. They did it to Cadbury and till date, the people involved have not come back to the market.” Also, the Co-Founder of Noble Shareholders Association, Gbadebo Olatokunbo, said: “It happened in Cadbury. SEC has the ultimate powers, once you are guilty and it is proven. They have the right to fire. It was after the Cadbury crisis that the commission created the tribunal, which is powerful.

“If they do not have the powers vested on them, they would not have made the pronouncement. In the case of Oando, two professional auditors were involved and it was based on their findings that the commission issued the directive. So, SEC has the powers to sack as the ultimate market regulator and the action was taken to protect investors.”

The President of Proactive Shareholders Association of Nigeria, Boniface Okezie, applauded the commission on the decision, urging SEC to do more in the areas of investors’ protection to forestall further losses in the nation’s capital market. Okezie however, insisted that the commission must make the outcome of Oando forensic audit public to keep stakeholders abreast of the findings.

He also faulted the SEC’s non-proactive attitude in handling market issues, noting that the decision is coming barely few days to the date of the company’s yearly general meeting.“SEC ought to have been proactive. If they had made this announcement earlier, the company should have been proposing an extra-ordinary meeting now and not the yearly general meeting.

“If the company needs fresh hands to manage its operations, I do not have any issue about it. The only regret is that the company did not put any plan on ground for succession until SEC comes in and this is not good for the market. This would serve as a deterrent to others,” he said.

A stockbroker with Delloit Securities, Tunde Oyediran, also described SEC’s decision as a welcome development, noting that many investors have been demoralised due to sharp practices of directors of listed companies.“It is a welcome development that would restore confidence in the market. At least, other directors would know that the zero tolerance to infractions is now functional,” he said.