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 thei
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 said the crisis had already done considerable damage and urged all parties to avoid a protracted 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.
