By Anayo Ezugwu
AS Capital market operators await the decision of the Securities and Exchange Commission, SEC, on Oando Plc after the Federal High Court injunction, some analysts have called on concerned parties to allow SEC do their job. They said that SEC has the right to investigate infractions involving any quoted company.
The analysts, who spoke to Realnews said it was strange that people are questioning SEC’s order bringing in mind that they took the decision based on forensic report carried out by a reputable firm. Austin Nweze, lecturer, Pan-Atlantic University, Lagos, and economic analyst, said the action of SEC is in the right direction.
According to him, it will encourage foreign investors knowing that there is a regulatory body that is making sure that the right things are done. He said that what foreign investors are looking for is laws and that people are brought to book in case of breaches.
“Oando is a publicly quoted company. If it is a private company, SEC has no business investigating them, but since it is a publicly quoted company and SEC as a regulatory body has the right to ask anybody to step down such as the CBN has the right to order bank managing directors to step down. It is not about foreign direct investment, they have been found guilty of breaches.
“The action of SEC is even good for the economy because it will give foreign investors confidence. I give kudos to SEC even due some of these activities have been there for more than five years, which made some groups to move over to ENYO Retail and Supply.
“The only way they can stop SEC is to delete from Nigerian Stock Exchange and nobody will border them again, if I were them that is what I would have done knowing that SEC was coming after them. All they need to do is to exit the Nigerian Stock Exchange, buy up all the shares and become a private company and they can stay there for life,” he said.
Nweze noted that the stakeholders are protected from the actions of SEC. “You might be surprised that shares of Oando may go up if the shareholders and investors do not have confidence on the current leadership. If they go the shares may go up. But on the other hand, it might affect the share price of Oando, some people might dump Oando shares, it could go either way. There is no other way it can affect the investors apart from share price.
“If they think that the company is doing well under Tinubu, some investors may dump their shares and it will bring down the share price of Oando. But if they think that it is a good move, the share price will go up. It all depends on the perception of the shareholders towards the leadership of the company.”
Nweze also supported SEC for not making the report public. He said that it is not necessary for SEC to make the report public because they must protect the interest of the company and shareholders.
On his part, Adori Ochai, economist, said the federal government and the general public mostly the shareholders must allow SEC to do their job because Oando is a public business. “We must allow SEC to do their work. If government intervenes, it will not be good for the market. Let the case play out itself because SEC is there as a regulatory body, so let them do their job,” he said.
Ochai regretted that the action of SEC will affect the shares of Oando. He said such action would definitely affect the shareholders because the value of shares normally drop once there is a board room crisis like the one going on at Oando.
According to him, what gives share the value is the demand for that share, when there is a boardroom crisis, there will be no demand for such shares. “When there is no demand for it, people who have it will start to sell because they don’t know what will happen the next day concerning the company. So the more people are willing to sell and less people are willing to buy the price of the share will go down.”
But some shareholders of the company believed that such sanctions imposed by SEC would harm the firm, damage shareholders’ investment and weaken market confidence.
Kabiru Tambari, one of the company’s shareholders, said SEC’s actions “defied logic” and could kill the company. Speaking on behalf of the Sokoto shareholders of the firm, Tambari said: “We are not happy at all with has happened. Wale Tinubu and his management team have suffered, they have put their resources; energy, time; to keep this company moving forward and now the SEC wants to take it away from not just them, but us the shareholders as well.
“When the company was making losses the SEC didn’t bring up all these infractions and sanctions, but now the company is doing well, and has returned to profit and they’ve come with such drasticactions. This will foil the company’s attempt to pay us dividend at the end of the year. It is clear that the SEC wants to kill the company.
“How else do you explain an action such as this that defies logic? We, the shareholders, who the SEC is meant to be protecting, are not satisfied with the way this has been handled. They should think of the effect their actions will have on the market, if this continues, the company will not be able to pay salaries, the shares will be devalued badly leaving us in a precarious position. We implore the Court to look into the matter carefully and adjudicate accordingly.”
– June 7, 2019 @ 19:29 GMT |