Oando loses court battle to stop SEC audit on false financial statements


Nigeria’s Oando Plc has just lost out in its bis to stop a forensic audit of its books by the Securities and Exchange Commission, SEC.

It would be recalled that the SEC had accused Oando of submitting falsified and misrepresented financial statements to the commission after some if it’s key shareholders raised supposed alarms.

Oando was giving a decisive verdict by Justice Mohammed Aikawa when he struck struck out the case on the grounds that the court lacked jurisdiction over the matter. The judge did advised Oando to take its case to the Investment and Securities Tribunal.

He said in his ruling that “I hold that the subject matter of this issue falls within the exclusive jurisdiction of the Investment and Securities Tribunal and not this court”.

“In addressing this issue, I find the provisions of the Investment and Securities Act 2007 quite instructive. Section 284 of the ISA (2007) says the Tribunal shall, to the exclusion of any other court of law or body in Nigeria, exercise jurisdiction to hear and determine any question of law or dispute involving- (a) a decision or determination of the commission in the operation and application of this Act, and in particular, relating to any dispute- (i) between capital market operators; (ii) between capital market operators and their clients; (iii) between an investor and a securities exchange or capital trade point or clearing and settlement agency; (iv) between capital market operators and self regulatory organisation; (b) the Commission and self regulatory organisation; (c) a capital market operator and the commission; (d) an investor and the commission; (e) an issuer of securities and the commission; and Jurisdiction of the Tribunal, etc. 132 (f) disputes arising from the administration, management and operation of collective investment schemes.

“It is not in dispute that the matter before me is a dispute between capital market operators.”

The judge said, “The duty of the court is to apply the law.”

“On this premise, I have no option than to uphold the preliminary objection. I also in the same vein uphold the preliminary objection of the 2nd defendant (Nigerian Stock Exchange). This court lacks the jurisdiction to adjudicate the dispute between both parties,” the judge ruled, adding that, “The proper place for this matter to go is the IST. I, therefore, strike out this matter.”

Oando has been embroiled in a leadership tussle with its prime shareholders. Wale Tinubu, the company’s chief executive officer has been accused by the former to have taken various decisions against the benefits of the company.

The company’s financial woes entered climax when the global oil prices crashed by more 70% impairing oil assets the company bought using leverage and revolving credit from ConocoPhillips in 2014.

The SEC did suspend trading in the shares of Oando on the Nigerian Stock Exchange for few days. While the suspension has been lifted, it is not clear if it will be restated during the forensic audit.