In the Oando versus the Securities and Exchange Commission (SEC) crisis it seems the SECs strategy is to use silent warfare and third parties to achieve one objective – the destruction of Oando PLC.

The latest in this saga being the announcement by Oando on Friday, 7 June of the resignation of Non-Executive Directors Chief Sena Anthony and Oghogho Apata, from the Board of Oando PLC.

Since Friday the 31st of May when the SEC issued a statement on its website on infractions committed by Oando and meted out sanctions, the regulator has made no public statements but instead has taken actions through 3rd parties that are considered by all heavy handed, intimidating and destructive.

Actions that have included using the media to announce to Oando and the general public that it had nominated Mutiu Sunmonu to head an interim management; an Oando spokesperson has said that to date they are yet to receive any official communication to this effect and the SEC website has no official statement on this move. On Thursday 6 June the company received official correspondence from the Deputy Commissioner of Police, Lagos, requesting cooperation from Oando’s management team to the deployment of armed men in Oando’s head office to maintain law order. In said letter the Police Commissioner indicated that this was as a result of a directive from the Director General of SEC. A letter received well after the fact, as armed policemen had taken up residence at the head office since Monday, 3 June. A move that has deterred staff from coming into work all week and hampered day to day business operations.

Despite a court injunction taken by Oando’s principals and a public outcry from different stakeholders for the SEC to follow due process and release the forensic audit report, the SEC continues to remain silent. A move that many find astonishing. Who regulates the regulator when they choose not to acknowledge public concerns.

The actions currently being taken by the SEC seem at odds with the personality of the acting DG Mary Uduk who has always portrayed herself as a conscientious public servant.

The Friday 31 May timing of the release of Oando’s alleged infractions and sanctions has always been seen as suspect. Coming so close on the heels of the courts order for the reinstatement of Gwarzo the erstwhile SEC DG. It is seen by many as Mary Uduk’s final and most explosive act as acting DG and an opportunity to leave her name in the sands of time, but to what end.

In this particular case the actions of the SEC have led to accusations of a witch haunt, corporate bullying and more recently silent warfare against Oando, especially when one looks at previous company cases that SEC has handled.

Most recent the case of BGL, where the SEC said it had received 32 complaints between 2012 and 2015 against the BGL companies over certain conducts in relation to operations of their Guaranteed Consolidated Notes (GCN) and Guaranteed Premium Notes (GPN). It took SEC 3 years and 32 complaints to finally take a decision to investigate BGL; in the case of Oando it took 1 complaint. In the same case the SEC stated that in order to ensure investors obtained justice while also granting all parties a fair hearing, all parties were invited before the SEC Administrative Proceedings Committee (APC). It was the final decisions of the SEC APC that led to sanctions including life time bans to some of BGL’s executives.

In the case of Ikeja Hotels, the regulator said in a bid to forestall chaos in the company it held various meetings with the then Board towards resolving the crisis, but the company continued to be plagued with unhealthy corporate governance practices and an internal war which led to the SECs decision to eventually dissolve the Board.

In one of the more popular cases, that of Cadbury, in June 2006, SEC had written to Cadbury to express concern on issues arising from the review of its 2005 financial report.
Subsequently, the Commission constituted an in-house committee, which carried out an investigation on the matter and confirmed misstatements to the tune of approximately N13 billion. SEC then invited the company executives, its external auditor and registrars, to appear before the APC. The rationale for the invitation was for the company to explain why sanctions should not be imposed on them for violating numerous codes of conduct. In a statement after, SEC indicated that the sanctions meted out were based on the APC’s findings.

In the above examples the SEC has shown itself as better than a regulator that wields a big stick, but one that acts as mediator and problem solver. In both cases SEC reiterates a show of engagement to allow for fair hearing and to resolve internal issues.

All contrary to actions taken in the Oando case. Since the SECs May 31 directives Oando has repeatedly spoken to a lack of fair hearing and from the get go an inability to get an audience with the SEC to resolve what it believes are easily explained infractions. Further to this, a leaked report to the media as far back as 2017 showed a blatant disregard of the findings and sanctions meted by the SEC APC on Oando.

From the minute the company cried foul at the SEC investigation the public woke up and took unprecedented interest in the case. With each new chapter and actions taken by the SEC people have speculated as to whose interests the Commission is protecting and who is behind what is very much an agenda to destroy.

The more one digs the more one realizes that this may be bigger than corporate bullying, when after 2 year even the company’s Board are starting to lose hope in winning this battle.

In the 6 days since the SEC released its statement on Oando’s forensic audit, the Company has suffered a drop in share price eroding over N10Bn from the Company and stock market; intimidation of its employees and a halt in business activities as a result of armed personnel laying siege at its headquarters, and now, we see the pressure getting to members of the Board who have been forced to resigned for the fear of irreversible reputational damage, following such strong career track records.

As far back as 2016, the DG of Nigeria Employers’ Consultative Association (NECA), O.A. Oshinowo wrote to the Minister of Finance, Kemi Adeosun to seek the Finance Ministry’s intervention in addressing the Securities and Exchange Commission’s (SEC) “ gun–to-the-head” approach in the discharge of its mandate.

According to Oshinowo, “We must caution that this revenue-driven disposition of SEC, which has bred illogicality and high handedness on the part of its officials, actually runs counter to the far more noble objective of promoting good corporate governance and is antithetical to the raison d’être of SEC.”

For a period of 4 years, without a Board, the SEC has exercised its power using a “gun-to-head approach”, acting in ways that are contrary to the rule of law and in some cases irrational and suspicious. If a higher authority does not step in to regulate this regulator we fear what will become of Oando and other publicly listed companies that dare to catch the eye of SEC.