Thursday, March 28, 2024

Fraud claims: Oando shareholders trade words over alleged dollar bribes

  • I did not collect any gift – Nwosu
  • We’ll summon management – NASS

Uneasy calm now pervades oil-servicing company, Oando Plc, as aggrieved investors in the Nigerian capital market have accused leaders of some shareholders’ groups of receiving dollar bribes from the management of the company to bury fraud allegations.
The aggrieved investors, who staged a protest in Ibadan, the Oyo State capital, last Tuesday, demanding the sack of the Managing Director of the company, Mr. Wale Tinubu, following what they called “the poor financial situation of Oando”, told The Point that the leaders of a few groups of shareholders collected gifts of $5,000 each after their flight and accommodation had been taken care of by the company, “to seal their lips.”
The National President, Renaissance Shareholders Association, Mr. Olufemi Timothy, said the last AGM of the company was stage-managed by the management to continue what he described as “incompetence in the face of crisis.”
He said, “We understand that money was shared for some leading shareholders at the event and a sum of N100,000 was sent to the accounts of others that were not at the meeting. Most of them used their positions to enrich themselves at the expense of their members and other investing public across the country.
“The era of meeting executives in closed door meetings before AGM, rubbing palms with gifts is an embarrassment and must stop because it is like eating one’s future in the company. They should understand that every gift collected or given out would affect our dividend at the end of the day. The unfortunate thing now is that the company may not be able to pay dividend till 2027.”
Also, the National Coordinator, PSAN, Mr. Taiwo Oderinde, alleged that some leaders of the shareholders’ associations had turned themselves to praise singers, having been allegedly sponsored by the organisation, to ensure that the AGM was held “smoothly.”
This, he said, was a classic example of the menace causing the poor rating of Nigeria on the global corruption index: that not only individuals are corrupt in Nigeria, but institutions also.
“That is embarrassing to all shareholders in the capital market because many of us joined the associations because we thought the leaders, being economists or accountants, would be able to scrutinise the annual report of the company and dig out discrepancies in their books,’’ another investor, who preferred anonymity, told The Point.
Some investors had, last week, pushed for the probe of some leading shareholders in the company, over alleged fraudulent practices.
The alleged corrupt practices, which became public knowledge during the company’s Annual General Meeting, held at Uyo, Akwa Ibom State two weeks ago, were believed to have been perpetrated with the full connivance of some executive directors.
Worried that the alleged fraudulent shareholders in the company might go scot free, “as they are society’s big fishes”, the aggrieved shareholders had distributed themselves into various pressure groups, for the common fight.
Two of the protesting groups, Renaissance Shareholders Association and Proactive Shareholders Association of Nigeria, passed a vote-of-no-confidence on the leadership of Oando Plc, whereas other groups like the Independent Shareholders Association of Nigeria, Shareholders Trustees Association and Progressive Shareholders Association of Nigeria differed.

 

The era of meeting executives in closed door meetings before AGM, rubbing palms with gifts is an embarrassment and must stop because it is like eating one’s future in the company

ALLEGATIONS UNFOUNDED – NWOSU

As critics called for the probe of the management of Oando and the leaders of some shareholders’ groups, based on the allegations levied against them, leaders of ISAN and Progressive Shareholders Association of Nigeria, argued that the allegations were baseless and false.
National leader, ISAN, Sir Sunny Nwosu, explained that the purpose of forming associations was to improve the relationship between the emerging shareholders’ population and the corporate world.
Nwosu insisted that the groups had been living up to expectation.
Contrary to the allegations of misconduct and ‘gifts’ collection, he said, “I did not collect any gift from the company and the trip that I made was an all-expenses paid by me. A lot of the protesters are angry over the poor performance of the company over the years but lack the right approach to address the issues.
“Baseless allegations against the personalities of individuals and the company, leading protest and exposing poor figures of the company is counter-productive. Such approach would scare investors from the company and the nation at large. The recent upbeat of the stock market major indicators might be affected negatively and that, in return, will lead to further loss for shareholders.”
He added, “Protest is part of democracy but people should learn to be constructive in fighting their cause. It is time for us to use legal means to teach people how to talk and address issues. The poor state of the company affects all of us and no one should over react or get too emotional about the issue.”
But Chairman, Ibadan Zone Shareholders Association, Mr. Eric Akinduro disclosed that some leaders demanded for financial gratification from the company.
The accountant said that some mushroom investors’ groups made such demands from companies.
He described such groups as ‘bad heads’ in the Nigerian capital market.
He urged the Securities and Exchange Commission to ensure that such mushroom groups were shown the way out of the market.
“Our work is to protect shareholders and that is what we are doing, except for the illegal ones in our midst. As far as our association is concerned, we remain committed to protecting the interests of our members and we will not compromise on that,” he added.

JOURNEY TO PROFITABILITY STILL FAR – EXPERTS

Despite the fact that the debt profile of the company dropped from $2 billion as at 2015 to $812 million by the end of 2016 after it sold its downstream stakes, Akute Industrial Plant and Alausa Power Plant, some investment and financial analysts, who spoke with The Point in separate interviews, declared that it might take some years for Oando to recover.
Many of them believe that shareholders’ investments in the company have ‘grown wings’ as the share value of the company dropped from N90 to N5 on the floor of the Nigerian Stock Exchange.
Also, investors have reportedly lost their patience after they discovered that they would not earn dividend anytime soon, while the remunerations of both executive directors and the non-executive ones increased from N1.78 billion as at 2015 to N1.93 billion by 2016.
An investment analyst, Mr. Shehu Mikail, said, “We have written SEC to commence a proper probe immediately and ask Tinubu to step aside for transparency. The future is bleak because the cost of financing the company also increased from N55 billion in 2015 to N58 billion by the end of 2016, which indicates that it appears there is no end in sight for our nightmare.
“With N263 billion negative working capital, there is no hope in sight for us because it has to clear debt, make profit before we can hope for dividend. We worked hard to invest in the company but what did we get in return? Absolutely nothing! The poor shareholders are suffering and many have died. We have a lot of retired people dying because their investments have gone.”
Similarly, Principal Partner, TPC Limited, an auditing firm, Mr. Ade Esho, agreed with Mikail that the company might not declare profit till 2019 or later, as its performance would be partly determined by the movement of crude oil at the international market.
Another factor that may cast significant doubt on the company’s ability to rebound soon is its current liability that exceeds current assets by N263.8 billion and its comprehensive loss for 2016, which was N33.9 billion, compared with the N56.6 billion recorded in 2015.
He said, “The management had proceeded to liquidate part of the assets of the company and many are going to be liquidated, and in particular, under the notes to the account department, management intends to sell its last asset attributable to it, Oando Energy Resources, in the name of restructuring the group.
“The market is largely driven by information, especially negative news. So, it is very important for the management to meet all stakeholders and dialogue on the way forward.”

NASS to invite mgt
Reacting to the claims of the aggrieved investors, Chairman, House of Representatives Committee on Capital Market and Institutions, Hon. Tajudeen Yusuf, told The Point that the lawmakers might invite the management of Oando, having received several petitions from concerned individuals and groups within the capital market sector of the economy over happenings at the company’s AGM in Uyo.
He said, “We are ready to probe or ask questions on all allegations leveled by all parties but we believe it is necessary to do that after the leadership of SEC has provided us with detailed information on the controversies. We are always careful about sensitive issues in order to prevent eroding foreign investors’ confidence in the capital market.”
However, efforts to get the company’s reaction to the allegations were frustrated as both Company Secretary and head, corporate communications, Ms. Ayotola Jagun and Mr. Aliyu Balogun, respectively, failed to respond to mail and text messages.

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