A Federal High court sitting in Kano on Thursday overruled the removal of directors of Oando Plc by the Securities and Exchange Commission (SEC).
In the ruling, it stated that SEC acted arbitrarily in suspending the management of Oando and, therefore, declared the appointment of the interim management null and void.
The court awarded a N250, 000 cost against SEC in favour of the Oando shareholders.
Oando’s shareholders, Alhaji Yakubu Gumel and Alhaji Kabiru Tambari, on behalf of the Sokoto Zone Shareholders Association; and Mr. Tunde Badmus of Pacesetters Shareholders Association got the favourable judgment at the Federal High Court (FHC) Kano, in a suit filed against SEC.
Justice Lewis Allagoa who gave the ruling dismissed the regulator’s preliminary objection and granted all the reliefs sought by the shareholders.
The court dismissed SEC’s objection on the ground that the shareholders’ claims fell under their rights, according to the Companies and Allied Matters Act (CAMA) and, 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 exceeded its regulatory powers thereby making all their actions to date illegal and an infringement of their rights.
The court also granted all the prayers sought by the shareholders, specifically that SEC intervening in Oando Plc’s management without sharing the forensic audit report that led to the sanctions against the company and the concerned directors was beyond the scope of its powers.
Exactly a month ago, the High Court Abuja, had 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 had 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 have seen the regulator at loggerheads with Oando for nearly four years.
At the FHC in Kano, the displeased shareholders called the ruling a big win.
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 hopes 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 for a resolution, but they haven’t listened to us, that’s why we took the matter to court.”
Also speaking on the Court ruling, Tambari said; “This is a great win for we 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 this ruling SEC can allow us to hold our AGM and SEC will leave the company’s management to run the business.”
Badmus 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.”
Ibrahim Shuaibu in Kano