Oando forensic audit to gulp N160 million
• Firm says cost may erode shareholders’ fund
Oando Plc has said that the cost implication of the forensic audit to be carried out by the Securities and Exchange Commission (SEC) on the allegations of infractions filed against the company by Ansbury Inc. and Alhaji Dahiru Mangal On Wednesday, 18 October 2017 is N160 million.
Oando stated that the commission, in a letter, informed the company that the N160 million cost of the forensic audit will be borne by the Company, to which Oando responded by saying that this must be an error in the light of all its submissions to date, and not the best use of shareholder funds at this time.
According to the firm: “We believe strongly that the SEC has been biased in the management of this enquiry and that the said penalties for alleged infractions far outweigh the alleged infractions.
“We appreciate and believe in the importance of a regulator to oversee the workings of public listed companies like ourselves, to this end we have cooperated fully with the SEC on their investigation despite it being brought by a petitioner that we felt had no standing (Ansbury Inc not being an Oando shareholder).
“We have put out public statements to show that we were working with the SEC to supply all necessary documentation to address any concerns that had been raised; thus their recent actions have taken us by surprise especially as we believe we have addressed each and every one of the allegations in previous communication.”
Oando Plc, on Monday, obtained a court order to halt the suspension of trading in its shares and a forensic audit planned by the Securities and Exchange Commission (SEC).
Confirming this development, Ayotola Jagun , Chief Compliance Officer and Company Secretary in a statement said: “ The Nigerian Stock Exchange, NSE and SEC were served with the enrolled court order today Tuesday, October 24, 2017 after the technical suspension was carried out by the NSE on Monday, October 23, 2017. In our view both the NSE and the SEC are legally obliged to comply with the interim orders pending the substantive determination of the suit.”
It will be recalled that shares in Oando Plc were frozen at N5.99 on Monday until further notice, the stock exchange said after the Securities and Exchange Commission (SEC) ordered a forensic audit into the company.
The SEC suspended trading in the stock for 48 hours last week, saying it was investigating complaints about insider trading and discrepancies in its ownership structure.
The Oil firm had, in a statement made available to The Guardian, expressed disagreement over SECs pronouncements on the suspension of trading on its shares and the forensic audit of the company, noting that none of the infractions stated by the regulator against the company warrant a forensic audit on the institution’s affair or full or technical suspension of trading of the company’s shares on the NSE.
Furthermore, the company maintained that the SEC has not presented a strong case to support the engagement of a forensic auditor to conduct a forensic audit into the affairs of the company.
Stating reasons for the disapproval, Oando said the SEC requesting a forensic audit in order to investigate whether its findings are true is a clear contradiction from the norm.
“ How did the SEC arrive at its findings if it cannot be sure of the veracity of those findings, and more importantly how did it ascribe the appropriate level of weight to be given to those findings, enough to warrant an immediate suspension followed by a technical suspension of the shares of the Company, especially if those findings are still mere allegations at this point, as the Commission has clearly communicated?
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