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Kemi Adeosun
Minister of Finance, Mrs. Kemi Adeosun

Oandogate: Gwarzo may have been a victim of circumstance after all

The rush and speed of light with which the erstwhile Director General of the Securities and Exchange Commission(SEC), Mr. Mounir Gwarzo and two others were ousted have started eliciting stakeholders reactions from several angles and conspiracy theories.

Moreso, considering a more revealing report by Economic Confidential, market leading investigative magazine recently.

According to the report, what may have burnt Gwarzo’s fingers and further consumed his job may not be totally unconnected with his planned thorough forensic audit of Oando Plc over the company’s acquisition of Oando Exploration and Production Limited (OEPL) by Oando Plc in 2013 without the prior approval by the regulatory authority which remains a serious breach of the Investments and Securities Act (ISA) 2007 in the first instance.

In a painstaking search by the economic intelligence magazine, the inquiry into Oando by SEC noted the report of the Independent Auditors of Oando Plc, Ernst & Young reveals that the company is a going concern suspected of insider dealings.

The report, which was sighted by Economic Confidential, noted that the acquisition of Oando Exploration and Production Limited (OEPL) by Oando Plc in 2013 without the prior approval by the regulatory authority which remains a serious breach of the Investments and Securities Act (ISA) 2007 in the first instance.

The report also revealed that misstatements in the 2013 and 2014 Audited Financial Statement of Oando Plc and the misleading information contained in its 2014 Rights issue circular were all in breach of the ISA Act, apart from related party transactions.

Further findings from the SEC investigative Committee also showed that there was declaration of dividends in 2013 and 2014 from unrealized profits, violation of SEC rules on remittance of dividends to the Registrars, observed discrepancies in the shareholding structure of the company and breach of SEC code of Corporate Governance amongst others.

It was based on these findings that SEC constituted a team to conduct a forensic Audit and the regulatory authority identified Akintola Williams Delloitte with other professionals to carry out the audit.

The report noted that to further ensure the interest of all stakeholders of Oando Plc is preserved the course of the exercise, SEC directed the Nigerian Stock Exchange (NSE) to place the shares of the company on technical suspension.

Economic Confidential further search revealed that Oando Plc quite dissatisfied by this decision instituted a court action and obtained an order on October 24th, 2017 praying for the halt of the of trading in its shares and forensic audit planned by SEC.

On November 23rd, 2017, the Presiding Judge at the Federal High Court in Lagos struck out the case of Oando Plc on ground that the court lacked jurisdiction over the matter and referred Oando Plc to the Investments and Securities Tribunal (IST).

However, on the November 24th, 2017, barely twenty-four hours after the above judgement by the court, the then Director General of SEC, Mounir Gwarzo was invited to the Ministry of Finance to meet with the Permanent Secretary and other top officials of the ministry, where it was agreed that SEC could go ahead with the forensic audit of Oando Plc.

In what looked like a drama, the following week, Monday, November 27th, 2017, Finance Minister invited the DG to another meeting where the DG was informed not to carry out the investigation, but rather a penalty be imposed on Oando “and be allowed to go and sin no more”.

Further investigation also showed that the following Tuesday, 28th of November 2017, in a reaction to the Minister’s verbal directive, the then SEC DG wrote a letter to the Minister highlighting all the implications of not carrying out the investigation, as this would send wrong signals to both local and foreign investors on the Nigerian capital market.

Just as things are about to situate, the Finance Ministry announced to the media that the DG has been suspended on the Wednesday 29th of November 2017 and subsequently a letter signed by the Finance Minister was sent to the DG.

Industry analysts are much more confused on the speed of the turn of events and how prospective investors will view the entire scenario and the Minister’s involvement after all.

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