Patrick Ajudua (an Engineer), who is a shareholder of Oando Plc won big in court on Tuesday, February 23 after he took it upon himself to legally challenge the Securities and Exchange Commission (SEC), in a suit filed at the High Court of the FCT. In 2019, the SEC suspended the AGM of Oando indefinitely.
The disgruntled shareholder had filed that the directive of the SEC suspending Oando’s Annual General Meeting (AGM) is in breach of his right to freedom of association as guaranteed under Section 40 of the Nigerian Constitution and Articles 9, 10 & 11 of the African Charter on Human and Peoples Rights.
In a hearing presided over by Justice O. A Musa, all cases filed were granted in favour of Ajudua who has painfully endured the SEC’s infringement of his rights as a shareholder and an individual, for the past two years, was the much-needed respite that the shareholders required especially at a time when many are grappling for survival following the country’s second recession in three years.
AGM’s are an important platform for the protection of the shareholders of a company, furthermore, they are a legal requirement for all publicly listed companies the world over. Usually, the main agendas for an AGM include a review of a company’s affairs and financial statements, shareholder engagement with Directors of the company to review performance, the appointment of auditors, to name a few. By being listed on the Nigerian Stock Exchange (NSE) a company is by virtue owned by its shareholders, thus ultimate control and the destiny of a company should lie in the hands of said shareholders. Section 81 of the Companies & Allied Matters Act ascribes to every member of an incorporated company, who has fully paid for his or her shares, a right to attend all the shareholders’ meetings of such a company; and to speak and vote at such shareholders’ meetings. According to Patrick Ajudua, the SEC has denied him this right over the last two years.
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Since the suspension of Oando’s 2019 AGM shareholders have been kept in the dark on the company’s affairs – specifically corporate initiatives and financials. According to a press statement issued by Oando PLC dated July 20, 2020, the suspension of the AGM has also resulted in the inability of the company’s Directors to lay before the shareholders for approval, the Company’s 2018 Audited Financial Statements; inability to appoint auditors to hold office for the 2019 financial year; and the inability of the Company to meet its FYE 2019 NSE Filing of Accounts obligation due date of March 31, 2020; amongst others.
Presiding over the case, Justice O. A Musa, made the following declarations: Ordered that Ajudua as a member and shareholder of Oando has a right and freedom of association and assembly with other shareholders and right to receive information at the AGM; declared the May 31, 2019 letter of SEC to Oando sanctioning its management, as unconstitutional, null and void and violation of Engr. Patrick’s fundamental right to a fair hearing and his human right to receive information on the affairs of Oando and his interest and shares in Oando; an order setting aside the directive of SEC suspending/postponing indefinitely the AGM of Oando in violation, breach and contravention of Engr. Patrick’s right and freedom of association and assembly with other shareholders and right to information from other shareholders and Oando PLC; and an order restraining SEC and Oando from interfering with, disrupting and or interfering with the Engr. Patrick’s constitutional right of association, assembly and right to receive information from other shareholders and members of Oando PLC at the postponed 2019 AGM.
Justice O. A Musa also granted an order of injunction restraining SEC from acting and /or taking any steps pursuant to its letter of 31st May 2019 or interfering in any manner whatsoever with Directors lawfully appointed by the Engr. Patrick and Shareholder; and an order directing Oando to convene and hold AGM of Oando plc within 90 days of the order of the Court in compliance with the provisions of CAMA.
Speaking on his win, Ajudua said: “A win for me is a win for all shareholders. The lingering delay in resolution of the conflict has brought untold hardship, financial difficulty & loss of capital appreciation on our investment. Therefore, the shareholders received this judgement with a high sense of humility & praying that all hands must be on deck to move the company forward. We plead with the regulators & others to give peace a chance & allow for harmonious resolution of the conflict. The shareholder community will continue to protect its investment, ensure high compliance with the code of corporate governance & ensure the integrity of the company operating in the capital market.”
This is not the first time that the SEC has suspended an Oando AGM, back in 2018 they had taken the same actions but Oando had fought back and the suspension was dropped, and the AGM held without a glitch. Of concern to shareholders is that in SEC trying to penalize Oando, innocent bystanders, in this case, the shareholders, are the ones getting the brunt of the punishment.
Over the last two years, Oando has operated without an AGM, hasn’t published any quarterly or year-end financials nor taken any corporate actions requiring shareholders’ approval. A shareholder who chose to remain anonymous said: “Actions like these are what discourages businesses from listing on the Nigerian Stock Exchange and foreign direct investment from coming in. This is bullying by the regulator and unfortunately, the party taking the weight of this bullying is we the shareholders. How can you bite me till I bleed and then tell me it is for my own good? The SEC’s actions in the past two years have shown nothing but an intent to destroy our investments. I commend Engr. Ajudua’s courage to challenge this maltreatment by the regulator. Things are hard in the country and no one can afford to lose out on their investments, definitely not at a time like this.”
The anguish of Oando shareholders is based on the erosion of value as a result of the drawn-out crisis. They remain concerned that the regulator tasked with protecting their investments, continues to do the exact opposite with no end in sight.