Oando shareholders, Alhaji Yakubu Gumel and Alhaji Kabiru Tambari, suing for himself and Sokoto zone of the Shareholders Association, respectively, as well as Tunde Badmus, suing for himself and for the benefits of Pacesetters Shareholders Association, have won at the Federal High Court (FHC), Kano, in a suit filed against the Securities and Exchange Commission (SEC) for allegedly overreaching its powers.
Justice A. Lewis Allagoa, presiding over the ruling, dismissed the regulator’s preliminary objection and granted all the reliefs sought by the Oando shareholders.
The FHC Kano dismissed SEC’s objection on the basis that the shareholders’ claims fall under their rights as shareholders according to the Companies and Allied Matters Act (CAMA) and was therefore not a capital markets issue, hence it was completely under the jurisdiction of the FHC, under Section 251 of the constitution.
The court further held that SEC was wrong in assuming that the shareholders were challenging SEC’s regulatory powers over Oando, whereas what the shareholders claimed was that SEC had exceeded its regulatory powers, thereby making all their actions to date illegal and an infringement on their rights.
The court further granted all the prayers sought by the Oando shareholders, specifically that SEC’s intervention in Oando Plc management without sharing the forensic audit report that led to the sanctions against the company and concerned directors was the regulator acting beyond the scope of its powers.
The court, therefore, awarded a N250, 000 cost against SEC in favour of Oando shareholders.
Exactly a month ago, the High Court in Abuja ruled in favour of another Oando shareholder, Patrick Ajudua, who filed a suit against the commission for breach of his rights as a shareholder.
The court ruled in his favour, ordering Oando to hold its annual general meeting (AGM) within 90 days of the ruling.
The plethora of court cases against SEC has been necessitated by the frustrations of shareholders, specifically minority shareholders, who have seen the regulator at loggerheads with Oando for nearly four years.
Their concern is that despite the woes on them, the regulator continues in a battle that seems to have no end in sight but is destroying value every day.
Shareholders have, over the last four years, called for the SEC and Oando to reach an amicable agreement or resolution so that the company’s management can focus on running the business, but these calls had fallen on deaf ears.
By taking matters into their own hands, the shareholders have finally decided they will fight for their rights and each win is evidence that this is an action that should have taken place years ago.
At the FHC in Kano, the displeased shareholders called the ruling a big win.
Alhaji Tambari Kabiru, one of the applicants, an Oando shareholder since 1991, explained why he decided to sue the apex regulator.
He said: “I was not happy with the current state of my investment, so I had to do something about it.
“I invested my money heavily with the hope of capital appreciation and this has not been the case. This SEC and Oando case is affecting the valuation of our investment; it gets worse each year.
“For over two years now, we have been totally in the dark about our investment in Oando.
“Year on year, our investment has depreciated. We are tired! We have reached out to the SEC and appealed a resolution, but they haven’t listened to us, that’s why we took the matter to court.”
Speaking on the court ruling, Alhaji Tambari, said: “This is a great win for us, the shareholders.
“We have endured too much pain these past four years. To worsen it, we had no oversight of what was going on in the company.
“We can’t continue like this, especially in these trying times when every penny counts.
“I thank the government for giving us confidence in the justice system.
“We, the common man, have nowhere to go but the court, and they have ruled in our favour, which means no one can escape justice.
“I thank the management of Oando for persevering this long and also the employees at Oando for standing by the company even in these trying times.
“I hope that given this ruling, SEC can allow us to hold our AGM and SEC will leave the company’s management to run the business.”
The sentiment of neglect by the SEC is the same across board as another applicant representing Pacesetters Shareholder Association, Mr. Tunde Badmus, explained his reason for suing the regulator.
He said: “The good of the company has to be for the good of all stakeholders.
“We have absolute faith in Oando, its board and management, hence our resolve to stand by the company.
“As stakeholders, though minority shareholders, we still value our investment and the path being taken by the company.
“We are confident that the board and management will not launder or plunge the company into deliberate difficulty.
“When the regulators wanted to impose new management on the company, we frowned at it and thankfully that didn’t happen.
“They should stick to their regulatory role and not try to become operators of the company by imposing management of their choice on us.
“We have reached out to the regulator – both the old and new management – to no avail, hence we had to head for litigation.”
