Court Thwarts Oando’s Bid To Stop SEC’s Forensic Audit Of Its Shares

The move by Oando PLC to stop the Securities and Exchange Commission (SEC) from carrying out a forensic audit of its shares has been thwarted by a Lagos Federal High Court.

Recall that SEC had on October 20, 2017, directed the Nigerian Stock Exchange (NSE) to fully suspend the sale of Oando Shares following a series of petitions against the company by Dahiru Mangal and Ansbury Incorporated.

SEC had equally announced that it would “conduct a forensic audit into the affairs of Oando Plc.”

In reaction, Oando had approached the court to stop the move by SEC.

But Justice Mohammed Aikawa, who presided over the matter on Thursday, struck out the case.

Justice Aikawa said the court lacked the jurisdiction to decide on the case.

The judge said, “I hold that the subject matter of this issue falls within the exclusive jurisdiction of the Investment and Securities Tribunal (IST) and not this court.

“In addressing this issue, I find the provisions of the Investment and Securities Act 2007 quite instructive. Section 284 of the ISA (2007) says the Tribunal shall, to the exclusion of any other court of law or body in Nigeria, exercise jurisdiction to hear and determine any question of law or dispute involving- (a) a decision or determination of the Commission in the operation and application of this Act, and in particular, relating to any dispute- (i) between capital market operators; (ii) between capital market operators and their clients; (iii) between an investor and a securities exchange or capital trade point or clearing and settlement agency; (iv) between capital market operators and self regulatory organisation; (b) the Commission and self regulatory organisation; (c) a capital market operator and the Commission; (d) an investor and the Commission; (e) an issuer of securities and the Commission; and Jurisdiction of the Tribunal, etc. 132 (f) disputes arising from the administration, management and operation of collective investment schemes.

“It is not in dispute that the matter before me is a dispute between capital market operators.

“The duty of the court is to apply the law.

“On this premise, I have no option than to uphold the preliminary objection. I also in the same vein uphold the preliminary objection of the 2nd defendant (Nigerian Stock Exchange). This court lacks the jurisdiction to adjudicate the dispute between both parties.

“The proper place for this matter to go is IST. I therefore strike out this matter,” the judge ruled.

The Counsel to SEC, George Uwechue, SAN, said on the ruling, “We brought a notice of preliminary objection stating that this court has no jurisdiction to hear capital market matters because there is a special tribunal set up for it. And the court agreed with us. So the court upheld our preliminary objection and therefore struck out the application.”

Meanwhile, the Johannesburg Stock Exchange (JSE) had similarly suspended Oando shares in October.