In a measure reminiscent of his first stint in power, President Muhammadu Buhari has closed the country's land borders, part of increasingly drastic measures to protect the economy. Critics believe his actions are having the opposite effect.
Volpi tightens his grip over Oando’s future
A fierce battle to control Nigeria's largest indigenous energy company Oando erupted on Friday when the Nigeria's Securities and Exchange Commission (SEC) ordered the resignation of CEO Wale Tinubu and his deputy, Omamofe Boyo.
- After two petitions were sent to the SEC in 2017, investigations into Oando were launched, including a forensic audit, said the regulator.
- The SEC also said it was handing over the investigation to Nigeria’s Economic & Financial Crimes Commission (EFCC), complying with Section 304 of the Investments and Securities Act, (ISA) 2007.
On Sunday the SEC announced an interim management team headed by Mutiu Olaniyi Adio Sunmonu, “to oversee the affairs of Oando plc, and conduct an Extraordinary General Meeting on or before July 1, 2019, to appoint new directors to the board of the company, who would subsequently select a management team for Oando plc.”
This appears to play into the hands of Gabriele Volpi, the Italian-Nigerian businessman who has been fighting Tinubu in the courts over a $680m debt.
- Volpi, the majority shareholder in energy logistics giant Intels, was behind one of the 2017 petitions, along with importer and fellow Oando stock holder Alhaji Dahiru Mangal.
- In January 2018, Mangal and Oando buried the hatchet, with Emir of Kano and ex-central bank governor Sanusi Lamido Sanusi reportedly playing peacemaker. The Katsina-born billionaire withdrew his petition soon after.
Volpi did not settle, however. According to Nigerian newspaper This Day, he is now planning to use his holding in Oando “to choose the CEO, deputy CEO and CFO in Oando plc and establish full control”.
- If Volpi and Mangal combine again, things look bleak for the old order at Oando.
Can Wale Tinubu fight back?
Oando rejects the suspensions of its top duo, claiming it had not been given a chance to see and prepare a defence to the forensic audit report before the regulator’s action.
- The company also points out it is listed on both the Toronto and Johannesburg stock exchanges, which demand international levels of corporate governance.
- Oando, which divested its stake in its gas company only a couple of months ago, is yet to fully repay its $2.5bn debt accruing from acquiring ConocoPhilips’ assets in 2014.
- As the company noted in its statement, “the SEC’s actions on this matter would have a huge negative impact on the Company’s reputation” and further impair its ability to make payments.
Wale Tinubu, feted as one of the indigenous oil sector lions during the era of Goodluck Jonathan, has seen his star wane as Oando struggles.
But he will be leaning on his political connections. His uncle Bola Tinubu is a national leader in the ruling APC.
- The elder Tinubu was widely believed to be lobbing for his nephew to become the next junior petroleum minister, deputising for the president himself. But even if the SEC decision is upturned and the younger Tinubu manages to survive this mess, his ministerial ambition could now be dead in the water.
- And it also calls into question the political weight of Bola Tinubu in the next Buhari administration, and may well kick up a broader conflict in the coalition that brought Buhari to power.
Bottom line: Corporate governance is back, reckon some. ““Other companies and their directors will sit up, seeing how Oando management and its directors ended up”, says Ambrose Omordion, the Chief Operating Officer, InvestData Ltd.