Stakeholders in the capital market have urged Oando Plc and the Securities and Exchange Commission (SEC) to opt for an out-of-court settlement of their dispute in the overall interest of the Nigerian capital market and the investing public.
The case between Oando Plc and the Securities and Exchange Commission (SEC) reopens Monday at the Federal High Court, Lagos,
Some capital market operators, who spoke on Sunday, said the crisis had already done considerable damage and urged all parties to avoid aprotracted litigation and bickering that could further erode public confidence in the market and shareholders’ investments in Oando.
They noted that while SEC has unassailable power to regulate activities at the capital market as Nigeria’s apex regulator, the developmental mandate of the Commission implies that it must seek a middle way to ensure sanity without undermining the confidence of quoted companies, which form major part of stakeholders in the market.
A stockbroker and financial analyst, Mr. Andrew Tsaku, said the situation at the market now requires all parties to work together harmoniously to win investors’ confidence and protect corporate sustainability.
He said capital market operators expected the parties to look beyond legalities and regulatory powers to the overall development of the market pointing out the fact that the market is sensitive to crisis and such could have unintended consequences.
According to him, investors look at the overall conduciveness of the investment market including the rules and regulations and the fairness of the enforcement processes.
He noted that while Oando has had its challenges, especially in the area of its leveraged business development strategy, the indigenous oil and gas group has strived over the years to create value for investors and represent Nigeria in the international capital market with its dual listing.
He said: “When we are looking at increasing participation in the capital market, whether you are talking of local participation or indeed foreign capital inflows, one of the things investors normally will look at is conducive atmosphere, not just for doing business, but the sanctity with which regulation is enforced.
“Both parties must now take another look at the issues. There are issues being contested but the reality about legality is that you can win in the law court, for example, but you might not necessarily win on moral grounds, because no matter who wins in this matter you will still need to warm your hearts to the realm of the investor, who is actually the real loser in the scheme of things and we must do everything to protect that interest going forward.”
Tsaku pointed out that the recourse to dialogue in the recent regulator-operator crisis between Nigerian Broadcasting Commission (NBC) and Daar Communications, another quoted company, underscored the importance of dialogue over litigation.
“AIT (Daar Communications) went to court, there was dialogue, persuasion and the NBC came to the table and found some middle cause action which has led both parties into talking and resolving the issues,” Tsaku said.
He charged quoted companies to improve on self-regulation by adopting global best practices in their operations while urging SEC to develop a proactive regulatory regime that enables the Commission to forestall corporate governance abuses and ensure compliance with rules and regulations.
Other stakeholders also urged the parties to consider the interest of the minority retail investors, who have seen significant depreciation since the corporate crisis started.
A group of stakeholders under the auspices of Consolidated Capital Market Stakeholders Forum (CCMSF), affirmed that SEC has a duty to protect the capital market.
In a statement signed by Umar Usman, CCMSF noted that SEC is the statutory regulatory body for the capital market in Nigeria and a body charged with the responsibility of safeguarding the interest of the shareholders, investors, creditors and the public in order to maintain the stability of the capital market and by extension the economy of the country as a whole.
According to the group, as the apex regulator of the Nigerian capital market, the Commission has a mandate to protect investors and its actions should be viewed within the perspective of protection of investors and preservation of stakeholder value.
The group noted that strong regulatory environment and corporate governance enforcement are in line with the Federal Government’s agenda to build strong institutions and promote the transparency and integrity of the Nigerian capital market, given that these are preconditions for attracting foreign investors.
The Institute of Directors (IoD) Nigeria, which has mandated its Director Development Committee and the Ethics Committee to review the crisis between SEC and Oando, stated that the crisis should be a learning point for both the regulator and quoted companies.
”As the professional body for Directors in Nigeria, IoD Nigeria, has taken a very keen interest in the developments and is monitoring the outcomes of all the actions initiated by all the parties concerned. There is no doubt that these developments have created huge lessons for all corporate Directors as well as SEC regardless of whatever their eventual outcome may be,” IoD Nigeria noted in a statement signed by its Director-General, Mr. Bamidele Alimi.
Many shareholders’ groups, including Independent Shareholders Association of Nigeria (ISAN) and Pragmatic Shareholders Association of Nigeria (PSAN), have also thrown their weights behind amicable resolution of the SEC-Oando crisis.
Shareholders called on SEC to take a second look at its investigative, adjudicatory and enforcement processes in order to ensure the Commission follows due process in its actions and maintains reasonable balance of its functions.