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Alleged Corporate Governance Abuse, Mismanagement: Judge Orders SEC Not To Act On Letter Barring Tinubu, Boyo From Being Director Of Public Companies


By Francis Iwuchukwu, Lagos

The Securities and Exchange Commission, SEC, was today (Monday) restrained from taking any  step concerning or acting on its decision contained in its letter dated  May 31, 2019, imposing a fine of N91,125,000.00 on Adewale Tinubu, and also barring him alongside Omamofe Boyo from being directors of public companies for a period of 5years,  pending the determination of the substantive suit filed before the court.

The restraining order came through Justice Mojisola Olatoregun of a Federal High Court sitting in Ikoyi, Lagos State, Nigeria, while ruling on an ex-parte application accompanied with affidavit of urgency, instituted by a Senior Advocate of Nigeria (SAN), Olisa Agbakoba, leading two other SANs, Tayo Oyetibo and Oluyede Delano.

According to an affidavit sworn to by the Deputy Group Executive Officer of Oando Plc., Omamofe Boyo, the deponent averred that by a letter dated May 18, 2017, the SEC had written to Oando, demanding for a response to allegations in a petition written by Asbury Inc. Investment company and Alhaji Dahiru Mangal dated May 2, 2017 alleging abuse of corporate governance and purported mismanagement of Oando's business. 

It would be recalled that Oando had addressed all the allegations in the petition through its letter dated May 24, 2017.

Even, other letters written by SEC concerning the issue(s) in contention was equally addressed.

In spite of this, SEC had gone ahead to suspend trading on  Oando shares.

But due to what it termed negative effects of the suspension, the firm initiated a legal confrontation against SEC to challenge to question its decision.

The case later moved to the Court of Appeal when same was thrown out for lack of jurisdiction by the Lagos division of the Federal High Court.

Consequent upon discussions with SEC, it was resolved that the suspension be lifted.

Whilst Oando withdrew its appeal against the  ruling of the Federal High Court, Akintola Deloitte was retained as sole forensic auditor to conduct the forensic audit of the company.

But no further communication was received by the firm from SEC until May 31, 2019 when SEC informed it of the conclusion of  Deloitte's audit.

SEC in its letter had resolved that Tinubu should pay a sum to the tune of N91,125,000.00 to the Commission for allegedly breaching section 60(2) of the investments and securities Act  2017, for certification of untrue statements of material facts in Oando 2013, 2014 and 2015 financial statements.

SEC had equally directed that Tinubu and Boyo be barred from being Directors of public companies for 5 years for improper conduct in managing the affairs of Oando. 

It was however the contention of Boyo in his affidavit that the letter from SEC is devoid of material or particulars which would provide them with information, reasons, grounds or specific actions alleged to have been taken by them which constituted wrong doing under the law, neither were they interviewed by either Deloitte or SEC, nor invited to appear before SEC to defend or respond to SEC's findings as SEC's letter which conveyed its findings also imposed sanctions on him and Tinubu. 

Boyo further stated that despite not providing them with the opportunity to respond to the Deloitte audit report, and the allegations contained therein, SEC proceeded to purportedly appoint one Mutiu Adio Sunmonu as head of interim management of Oando, insisting that Sunmonu's appointment would interfere with their management of Oando company. 

Boyo equally noted that if the injunctive orders being sought are not granted, and SEC continues with its actions, irreparable loss would be caused to Oando through the collapse of its share price. 

He also argued that the action of SEC, if not restrained would lead to an erosion of the company's shareholders funds, thereby jeopardising the investment of thousands of Nigerians who are shareholders of Oando.  

This prompted the applicants; Jubril Adewale Tinubu and Omamofe Boyo to ask the court for a restraining order against SEC and its agents, employees and privies from taking any step concerning or acting on its decision contained in its letter of 31st of May, pending the determination of the motion for interlocutory injunction. 

Co-respondents in the matter is Mutiu Olaniyi Adio Sunmonu. 

While adjourning the matter till June 14, 2019, Justice Olatoregun restrained SEC, its agents and privies from taking any step concerning or acting on its decision contained in its letter of 31st May 2019 pending the hearing and determination of the applicants motion for interlocutory injunction.

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