The Securities and Exchange Commission (SEC) has directed the Nigerian Stock Exchange (NSE) to suspend trading in the shares of Oando Plc effective from today.
The suspension which will last till October 20 is a prelude to the technical suspension of the company shares.
A full suspension is the halt of trading activities in a listed security for a period.
A technical suspension is the interruption of price movement in a listed security for a period so that any dealings in the securities which occur during the period of the suspension will not result in any change in price, which change may have occurred had the suspension not been implemented.
In the 48 hour period commencing today, there will be no trading in the shares of Oando Plc.
Thereafter, effective 20 October 2017, investors will be able to trade in Oando Plc’s shares but such trading will not result in any movement in the price of the shares, said a notice by GTI Securities to clients.
Oando has been under the scrutiny of the SEC over allegations about the company’s huge debt and petitions by some shareholders over corporate governance.
One of them was the businessman, Alhaji Dahiru Mangal, who claimed to have 17.9 per cent of the company. Oando claimed he had only 4 per cent and that he was yet to disclose the ownership of the remaining 13.9 per cent in compliance with Section 95 of the Companies and Allied Matters Act, Cap. C20 LFN 2004 (‘CAMA’).
The first petitioner was Alhaji Dahiru Mangal a 4 per cent shareholder in Oando Plc.
In his petition to SEC, he indicated that he held 17.9 per cent interest in Oando.
Another petitioner was the Italian businessman, Gabriele Volpi.
Volpi who runs the troubled Intels in Nigeria claimed he invested in Oando via his company, Ansbury Inc, by making equity contribution to Oando’s purchase of ConocoPhillips Nigeria assets.
But Oando shot back that Ansbury was not a shareholder of the company, but a shareholder in a company domiciled in a jurisdiction outside Nigeria.
Ansbury, Oando said, held shares in a Nigerian investment company by the name of Ocean and Oil Development Partners (OODP) that was a shareholder in Oando Plc.
Both petitioners wanted to cash out from the company, but Oando has refused to play ball, because the company is facing a serious financial crisis, occasioned by the big fall in oil prices, soon after it paid $800 million to buy ConocoPhillips in Nigeria.
At its 40th shareholders meeting in Uyo last month, the company reported some profitability for 2016.
The Oando Group’s financial results showed turnover increasing by 49 per cent, N569.0 billion compared to N382.0 billion in the corresponding period of 2015.
Profit after tax increased by 107 per cent, N3.5 billion compared to a loss of N47.6 billion in 2015 and net debt reduced by 35 per cent to N230.6 billion compared to N355.4 billion in 2015.
SEC has not announced what it is probing in the company.