Consequent upon its findings, the commission resolved to conduct a forensic audit into the affairs of Oando Plc, pursuant to its statutory duties in line with section 13(k), (n), (r) and (aa) of the ISA 2017 and, as such ordered the technical suspension of the oil company’s shares.
The Finance Ministry has faulted the manner in which the Nigerian Stock Exchange (NSE) lifted the technical suspension on the shares of Oando Plc noting it was without due authorisation.
The ministry also faulted the roles of some top management officials of the Securities and Exchange Commission (SEC) whose curious actions led to the flip-flop in the capital market.
NSE on April 11th lifted the technical suspension on the shares of Oando Plc and later reversed its action, causing confusion in the nation’s capital market.
Finance ministry in a July 2018 report on the confusion that trailed the action noted that the technical suspension was lifted without the knowledge and authorisation of Abdul Zubair, the then Ag. D-G SEC who learnt about the development through television broadcast like every other Nigerians.
The three officials of the commission indicted by the Finance ministry report are Amos Azi, the Acting Secretary, Adamu Sambo, Head of R & E, and Mahmud Mukthar, a principal manager of the commission which Finance ministry frowned at their individual roles in the whole issue.
On the NSE’s side are Oscar Onyeama, the Chief Executive Officer and other top management officials of the Exchange whom the Finance ministry frowned at their decision to abruptly lift the suspension on the trading on the shares of the oil company without clarifying from Zubair, the Ag. D-G of SEC.
The Ministry in its final submission held that they worked without due authorisation owing to the fact that both NSE, and SEC had earlier agreed with the Johannesburg Stock Exchange (JSE) to withhold action on lifting the technical suspension..
The confusion that trailed the action led to the slight restructuring of the top personnel of the commission and the removal of Abdul Zubair, from the Acting D-G position and his replacement with Mary Uduak the current Acting D-G.
For the roles of the officials of the SEC in the situation which the ministry described as embarrassing and tagged “Flip-Flops Of the Nigerian Capital Market”, the Finance Ministry In a circular signed by Mrs Olubunmi Siyanbola, Director, Home Finance, Finance Ministry, directed that the trio should be sanctioned in accordance to the rule of the Commission.
“The Ag.Secretary to the Commission, Mr Amos I Azi, the HOD (R&E) Mallam Adamu Sambo and Principal Manager (R&E), Mahmud Muktar, should be subjected to the internal disciplinary processes of SEC, in line with their established roles in the whole issue’ noted the Finance ministry summary report and the circular to the Commission.
Sanctions for such action according to those familiar with SEC’s staff manual include non-promotion to superior positions in the commission.
While the Ministry in its circular of 12th July 2018 with reference number F.11127/S.1/950 to the Acting D-G, SEC, Mary Uduak recommended punitive measures for the commission’s officials, the ministry was silent on the NSE officials who were involved.
It would be recalled that the suspended DG of SEC, Mounir Gwarzo directed the Nigerian Stock Exchange (NSE) to place the shares of Oando Plc on technical suspension from October 20, 2017.
Gwarzo had acted on the directives of the House Committee on Capital Market and Institutions, in addition to the commission’s findings on the review of two petitions from Alhaji Dahiru Barau Mangal and Ansbury Incorporated which alleged financial impropriety and mismanagement in Oando Plc.
The commission findings include breach of the Investments & Securities Act 2007, breach of the SEC Code of Corporate Governance for Public Companies Suspected insider dealing, related party transactions not conducted at arm’s length, and discrepancies in the shareholding structure of Oando Plc amongst others.
Finance Ministry in a three-page report titled “Executive Summary Of the Response Of the Acting DG, SEC, To the Query On the Recent Flip-Flops Of the Nigerian Capital Market” that accompanied the circular noted that the then Acting D-G SEC, Abdul Zubair was “an unfortunate victim of a web of unethical contrivances that was craftily weaved by some overzealous staff of SEC on one hand, and the curious negligence of the NSE officials”.
In the report sighted by InsideBusiness, SEC’s Inter
im Executive Management Team met on 5th April 2018 to review the action on Oando and afterwards, collectively resolved to lift the technical suspension earlier placed on the trading of shares of Oando Plc.
The decision was conveyed to Oscar Onyeama Of NSE on 6th April after which a teleconferencing involving the SEC, NSE and the Johannesburg Stock Exchange (JSE) was held to discuss the implementation of the decision.
The trio at the conference agreed to halt the lifting of the suspension until all the technical issues that could impede the implementation of the SEC;s resolution had been resolved.
Consequently, another e-mail and letter containing the decision to halt the decision were on the same day sent to the CEO of NSE from the Acting DG SEC, superseding the earlier directive and advising that status quo ante be maintained.
The development however, took another dimension on 9th April when Amos Azi, the Ag Secretary of the Commission who was absent at the 5th April meeting of the EMT of SEC resumed and without clarification and update from his superior, minuted on the decision of the EMT and sent it to Aminu Sambo for implementation.
Sambo, according to the Finance Ministry report, also, issued the directive that NSE should lift the suspension. This was said to be counter-directive to the earlier agreement.
The letter, signed by Adamu Sambo according to the Finance ministry report was without the knowledge of Zubair, the Acting DG SEC who at that time was the highest authority and who was kept out of subsequent discussions on the issue
“The HOD (R&E) then directed Muktar Mahmud, Principal Manager (R&E) to handle subsequent correspondence with NSE on the technical suspension issue’, according to the Finance ministry report.
“E-mails and letters between SEC and NSE from 9th to 11th of April, 2018 when the lifting of the technical suspension became effective, were coordinated and processed by Muktar Mahmud albeit, without the knowledge of Zubair, the Acting DG or any members of the SEC’s interim EMT”.
The report further noted that “Even the letter from Mrs Tinuade Awe (ED, Regulation NSE) dated April 10th April 2018 and addressed to the Ag. DG SEC in both his personal and official capacities, on the current position of NSE on the technical suspension, was not bought to the notice of Zubair, the Ag. DG of SEC”
The ministry was curious about the action of the NSE, especially its CEO who despite being part of the decision of the trio of the NSE, SEC and the JSE, to withhold action on the lifting of the suspension, acted on the counter-directive from the trio of Amos Azi, Mahmud Muktar and Adamu Sambo without consulting Zubair, the Ag.D-G SEC.
“The NSE never sought for the reason or confirmation of the apparent and sudden volte-face from the Ag. DG SEC” Finance ministry noted in the report. .