Wale Tinubu in the dock

…shareholders insist on resignation

By OKEY ONYENWEAKU

Pressure is mounting on the Group Managing Director of Oando Nigeria Plc, Mr Wale Tinubu to quit his day job as the company’s chief executive officer. Worried by the company’s declining fortunes shareholders of the oil major have orchestrated calls for his removal.

Tinubu’s woes have been increasingly compounded by the growing number of stakeholders calling for him to apply his talents in some other line of business or in another company. They have insisted that his persistence in retaining his position as the company’s main executive has denied the company of the benefit of novel approaches and ‘new eyes’ on the business that would come with a fresh CEO. A source close to the firm’s management told Business Hallmark that the Board of Directors of Oando may be considering the option of advising Tinubu to vacate his position to save the oil giant from further embarrassment.

The source noted that the board was becoming increasingly edgy as the crisis deepens and threatens to boil over.

‘’The board of the company have held series of meetings and the GMD, Mr Tinubu has been advised to think about resigning in order not to lose everything they had worked for’’,  the source who pleaded anonymity said.

The company’s shareholders have insisted on the removal of top management based on allegations of a lack of transparency in the company’s operations and opaqueness in its fiscal reporting standards. Added to this has been a seeming arrogance of executives who for some reasons have seen themselves as permanent corporate fixtures. Wale Tinubu has run the company as its helmsman for the last 17 years.

Against this backdrop several shareholders have expressed discomfort with the existing executives of the board and have called for their removal. One shareholder expressed the opinion that the Tinubu-led board had outlived its usefulness as it had, ‘lost vision, passion and drive, costing the company and shareholders billions in potential earnings and dividends’, he noted.

There is a geneal notion that the removal of Tinubu would give the company a new lease of life and usher in fresh perspectives and a management style to reposition it for better performance. One of the corporate shareholders that have expressed concern over the performance of the company Ansbury noted that, ‘the management of the company lacks capacity, efficiency and effectiveness in the running of the firm’, believing that Oando’s future was uncertain it noted in a recent investment report. Ansbury noted that, ‘strong uncertainty regarding the going concern status of the group (Oando) had already arisen in 2015 and strengthened in 2016 as pointed out by the auditors in their report.’ The company noted in a

petition to the Securities and Exchange Commission (SEC).

The petition further noted that, ‘In the previous financial statement, 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, management intends to sell its participation in OER (the last asset attributable to the company) in the name of restructuring or re-establishing the group’s going concern.’

Oando has been embroiled in deep crisis in the last few years as investors in the flailing company believe that the current management is responsible for its financial upheavals.

Muktar Muktar, a shareholder of Oando Plc told Business Hallmark that the management of Wale Tinubu, Group Managing Director of Oando Plc has been at the helms for more than 17 years and is still running the company creating a very little window of opportunity for younger blood with new ideas and new approaches to reposition the organisation.

He explained that what bothers most shareholders is that the management has stripped the company of valuable assets and left it with almost nothing.

According to him, ‘we are happy that the regulators have come in and have appointed forensic auditors that will eventually uncover fraudulent activities over the years.’

”The current management has stripped the company of all its valuable assets. Yet they want to remain there after over 17 years, to do what? The liabilities out- weigh its assets today by over N200billion. How did that happen? We want to know. I advise that SEC should give us a caretaker management for now,” Muktar said.

However, the spokesperson for Oando Plc, Mrs Alero Balogun, has denied that the company’s board and other stakeholders are asking the GMD/CEO, Mr. Wale Tinubu to resign from the his position.

‘’That is not true. The board did not ask him to resign. He is not under pressure to resign. We held our Annual General Meeting peacefully and stated our focus to take the company to a higher pedestal’’, Mrs Balogun said.

This is coming after the Securities & Exchange Commission (SEC)’s investigations indicted Oando Plc of misstating its audited financial statements for 2013 and 2014 financial year arising from Oando Exploration and Production Limited’s various alleged cloaked transactions.

According to the  letter addressed to the Group Chief Executive Officer of Oando, Adewale Tinubu, by SEC, the commission alleged that Oando’s management had shown an unhealthy disregard for laid-down rules and regulations.

The financial regulator had said that, “following the structuring of the OEPL transaction in contravention of the ISA 2007, Oando Plc recorded a profit of about N6bn from the sale of the OEPL that erased the operating loss of N4.68bn, leading to a profit of N1.4bn for the year 2013.

“The company subsequently declared dividends from the profit. Having admitted that the action was in breach of the ISA 2007, Oando Plc restated its 2013 and 2014 audited financial statements, which contained material false and misleading information contrary to Section 60(2) of the ISA 2007.

“The commission finds from the corporate governance returns submitted by the company for the period ended December 31, 2016 that the remuneration of the group chief executive officer and the deputy GCEO was approved by the board while the GCEO was responsible for fixing the remuneration of other executive directors, which is in violation of part 3, 14,3 of the SEC Code of Corporate Governance.”

The letter, dated October 17, 2017, was titled, ‘Re: Serious Concern to Corporate Governance Existence, Gross Abuse of Corporate Governance and Financial Mismanagement in Oando Plc’, and was signed by the Head, Legal Department, SEC, Mrs. Braimoh Anastsia.

SEC explained that the last board evaluation of Oando was done by the KPMG in 2012, stressing, “This is a violation of Part B, 15.1 of the SEC Code of Corporate Governance.”

On the hand, Oando has already gone to Court and obtained an ex-parte order from the Federal High court granting an interim injunction, restraining NSE and SEC from implementing a technical suspension of the shares of the company, and another order restraining the SEC from conducting any forensic audit of the company’s affairs pending the hearing and determination of the matter.

Oando, in a statement had said, “We are of the view that the SEC’s directives are illegal, invalid and calculated to prejudice the business of the company. The company being dissatisfied with the most recent actions taken by SEC and to safeguard the interests of the company and its shareholders immediately took steps to file an action with the Federal High Court against SEC and the NSE.

“The NSE and SEC were served with the court order on Tuesday, October 24, 2017 and the NSE and SEC are legally obliged to comply with the interim order pending the substantive determination of the suit.”

The spokesperson of the SEC, Naif Abdulsalam told BH that it would amount to prejudice for the apex regulator to talk on the issue when the matter is already in court.

‘’So we are waiting for the court pronouncement’’, Abdulsalam said.

Meanwhile, Oando Plc achieved a profit- after- tax of N4.6 billion in its half year result for the period ended June 30, 2017.

The company in its results showed that the profit- after-tax went up by 117 per cent to N4.6 billion from a loss- after- tax of N26.9 billion in H1, 2016.

Turnover increased by 26 per cent to N267.1 billion from N212.3 billion, gross profit increased by 76 per cent to N33.4 billion from N19 billion and  net finance costs more than halved to N16.4 billion from N35.3 billion.

The company had said, “the first half of 2017 has witnessed the country’s production levels steadily recovering to normalcy.

Oando, problems did not start recently, the company had posted profit after tax of N14.3billion in 2010, it dropped by 81 per cent to N2.6billion in 2011 and rose by 153 per cent to N6.6billion in 2012. Its profit also dropped by 80 per cent to N1.3b in 2013 from where it slipped into the red at N145billion in 2014 and levelled up at a loss of -49.6billion in 2015 and profit after tax of N3.4billion in 2016.

The auditor to Oando Plc, Ernest & Young had also faulted some aspect the 2016 financial statement of the company, even as shareholders expressed mixed feelings on the company’s performance.

According to the auditors, “We drowning attention to note 45 in the financial statements, which indicates that the company reported a comprehensive loss for the year of N33.9 billion ( 2015: loss N56.6 billion) and as at that date, it’s current assets exceeded current liabilities by N14.6 billion (2015: N32.8 billion net current liability). The group recorded a comprehensive income of N112.4 billion for the year ended December 31, 2016 (2015: loss N37.8 billion) and as at that date, it’s current liability exceeded current assets by N263.8 billion (2015: N260.4 billion). As stated in the notes, these conditions, along with other matters, indicate that a material uncertainty exist that may cast significant doubt on the company (and Group’s) ability to continue as a going concern.”

Oando, problems did not start recently, the company had posted profit after tax of N14.3billion in 2010, it dropped by 81 per cent to N2.6billion in 2011 and rose by 153 per cent to N6.6billion in 2012. Its profit also dropped by 80 per cent to N1.3b in 2013 from where it slipped into the red at N145billion in 2014 and levelled up at a loss of -49.6billion in 2015 and profit after tax of N3.4billion in 2016.