Oando Makes Peace With SEC


The biggest story on the NGX was Oando releasing its 2019 and 2020 numbers. The company recorded mega losses.

For FY 2019, it made N576 billion in revenue and a loss after tax of N207 billion. For the 12 months ended December 2020, the company made N489 billion in revenue and incurred a loss after tax of N132 billion. Why is an oil and gas company losing so much money? Oando had to make impairment provisions for some of its oil and gas investments, as well as financial assets. To impair in this case means those assets are worth less than was paid for and will earn far less than expected.

Why so late? The company had been in court with the Securities and Exchange Commission (SEC) and a number of shareholders. SEC is the ultimate regulator of companies listed on the stock exchange.

In 2017, some shareholders had petitioned SEC, claiming Oando wasn’t well run. SEC conducted a forensic audit, found that the management had made some missteps and asked them to step down. The company claimed it was not given an opportunity to review the audit and to respond accordingly. It then took the SEC to court.

That has all been resolved. SEC fined the company N271 million and asked it to withdraw all its court cases.

Oando’s main shareholders—Wale Tinubu and Mofe Boyo—have also settled with the shareholders that sent petitions to SEC, and intend to buy out the others. When that happens (which could be sometime this year), Oando will become a private company.

source: MoneyAfrica

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