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Oando Flays SEC over AGM Suspension

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  • Oando Flays SEC over AGM Suspension

Oando Plc has decried the last-minute suspension of its scheduled annual general meeting (AGM) by Securities and Exchange Commission (SEC). SEC had on Monday ordered the suspension of Oando’s AGM, which had been scheduled for yesterday in Lagos.

Oando’s share price depreciated by 2.60 per cent yesterday in post-announcement trading at the Nigerian Stock Exchange (NSE), representing a loss of N1.24 billion in market value. Oando’s share price dropped by 10 kobo to close at N3.75 per share.

In its official response to the suspension filed at the NSE, Oando stated that the cancellation of the scheduled AGM by SEC was not in the best interests of the Company and its shareholders who have travelled at great expense, from far and wide, to attend the AGM.

“The company also stands to lose significant shareholder funds by the attendant cancellation of the AGM at such short notice,” Oando stated.

Oando noted that it would take all legal steps to protect its business and assets whilst remaining committed to act in the best interests of all its shareholders.

The company said it would soon announce a new date for the AGM.

SEC had stated that the suspension was based on the Ex-parte order of the Federal High Court, Ikoyi, Lagos, which ordered status quo to remain.

Oando disagreed with SEC’s position pointing out that it had by notice to the public and its shareholders on May 10, 2019 validly convened its 42nd AGM.

“The actions contained in the SEC’s letter to the Company dated Friday, May 31, 2019 was effectively put in abeyance by the Ex-parte Order of the Federal High Court, which was granted on Monday, June 3, 2019,” Oando stated.

Several shareholders have also criticized the suspension of the AGM and other actions being taken by the Commission against the indigenous oil and gas company.

Shareholders under the auspices of Pragmatic Shareholders Association of Nigerian (PSAN) called on the Federal Government and other stakeholders to restrain SEC from creating unnecessary panic in the capital market.

According to the shareholders, the suspension of the AGM was counterproductive as both the company and its shareholders will bear the pains and financial burden of the cancelled AGM.

“Oando had planned and piad for this event as far back as May, what happens to all the money that was paid to the vendors to make the meeting a success? This is our hard earned money that has not been used judiciously as a result of SEC’s intervention,” PSAN stated.

SEC stated that it suspended the AGM until further notice to allow the parties maintain status quo adding that it would update relevant stakeholders and the public on the outcome of the ongoing litigation.

SEC had on May 31, 2019 released a statement indicting the management and board of Oando of sundry corporate governance abuses and infractions of the relevant capital market laws.

SEC barred the Group Chief Executive Officer (GCEO) and the Deputy Group Chief Executive Officer (DGCEO) of Oando from being directors of public companies for a period of five years. SEC also ordered certain members of board of directors of Oando to resign.

The apex capital market regulator stated that it had concluded investigation into alleged corporate governance abuses at Oando and found that the company was guilty of serious infractions and market abuses.

SEC also directed the payment of monetary penalties by the company and affected individuals and directors, and refund of improperly disbursed remuneration by the affected board members to the company.

SEC also directed the convening of an Extra-Ordinary General Meeting on or before July 1, 2019, to appoint new directors.

These among others the SEC stated, are part of measures to address identified violations in the company.

According to the SEC, following the receipt of two petitions by the Commission in 2017, investigations were conducted into the activities of Oando. Certain infractions of relevant laws were observed. The Commission further engaged Deloitte & Touche to conduct a Forensic Audit of the activities of Oando.

On June 2, 2019, SEC appointed an interim management team headed by Mr. Mutiu Sunmonu, a former Managing Director of Shell, to oversee the affairs of Oando and to conduct an extra ordinary 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.

Oando however described the directives from the SEC as a calculated attempt to prejudice the business of the company.

The company stated that the alleged infractions and penalties are unsubstantiated, ultra vires, invalid and calculated to prejudice the business of the company.

According to the company, it has not been given the opportunity to see, review and respond to the forensic audit report and so unable to ascertain what findings were made in relation to the alleged infractions and defend itself accordingly before the SEC.

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade experience in the global financial markets.

Finance

Flour Mills Posts Strong Half Year Results Despite Headwinds

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flour mills posts 184% increase in PAT

Flour Mills of Nigeria Plc recorded strong performance in the Half Year (H1) ended September 30, 2020.

In the 2020/21 half-year results released on Tuesday through the Nigerian Stock Exchange, the leading integrated food business and agro-allied Group, grew revenue by 31 percent year-on-year from N270.8 billion posted in the half-year of 2019/20 to N355.1 billion in the period under review with second-quarter growth of 47 percent when compared to last year second quarter.

Similarly, the Group’s profit before tax grew by 60 percent year-on-year from N8.6 billion in H1 2019/20 to N14.6 billion in H1 2020/21 with an impressive 160 percent growth from the second quarter.

The strong performance continues across the board as profit before tax was driven by the agro-allied segment, which realised a profit of N6.3 billion when compared to the loss posted in 2019/20 period. The company said it recorded strong improvement in edible oils and fats, protein and fertiliser businesses after its investments over the years started yielding results.

Profit after tax grew by 68 percent from N5.9 billion achieved in H1 2019/20 to N9.9 billion in the period under review.

According to the company, despite economic uncertainties and headwinds, the Group has continued to show sustained growth in key areas with the agro-allied unit leading with a strong result in edible oils and proteins.

Speaking on the performance, Paul Gbededo, the Managing Director and Chief Executive Officer (CEO) of the company, said “with this result, our business has once again shown its resilience, by following the path of sustainable growth despite the prevailing challenges in both the local and global economy.”

He further stated that “in line with our vision to continue to grow value for our investors, Management will for the remaining part of the financial year continue to concentrate on improving operational effectiveness through accelerated strategies for Group-wide cost optimisation, which will ensure sustainability in the current market climate, while we will continue to invest in growing the business further.”

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US Banks Led the Most Fined Financial Institutions in 2020

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US Banks Are The Most Penalised Financial Institutions in 2020 Financial Year

Banks in the United States were the most fined financial institutions in 2020, according to the latest report from Finbold.

Finbold, a company that specialises in financial data, said three countries accounted for 97.32 percent of the total fines levied on banks in 2020.

The data revealed that United States banks are the most fined at €9.15 billion. This was followed by Australian banks with a combined €770 million, while banks in Israel came third with €762.97 million.

Also, while the fines are likely to increase before the end of the year, the total fines levied against financial institutions globally stood at €11.61 billion as of October 22nd.

Further breakdown showed Swedish banks came fourth with €456.18 million fines while German banks that incurred a combined €169.01 million fines came fifth.

The report showed Goldman Sachs led the most fined bank with €5.26 billion for various violations of regulatory rules.

Wells Fargo came second with €2.53 billion while Westpac Bank in Australia and Hapoalim emerged third and fourth with €770 million and €762.97 million, respectively.

Other heavily fined lenders include Swedbank from Sweden fined €360 million and Germany’s Deutsche with €126.52 million fine in 2020 so far.

Speaking on banks’ fines, Oliver Scott, Chief Editor, Finbold, said “Notably, the tally of bank fines is likely to increase in the coming years as European and Asian regulators catch up with U.S peers who are considered more aggressive. However, banks are looking for means of minimizing fines. Analysts have been of the opinion that the fines could have been avoided if banks leverage technology through the deployment of perfect software.”

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Guinness Nigeria Explains Reason for N12.6 Billion Loss in 2020

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Guinness Nigeria Speaks on 2020 Poor Performance

Guinness Nigeria Plc has blamed the challenging business environment amid COVID-19 restrictions that led to the closure of bars, clubs, lounges and restaurants for its 2020 losses.

Mr. Baker Magunda, Managing Director/CEO, Guinness Nigeria, who spoke on the company’s performance in 2020, said the aforementioned represents a major part of the company’s consumption, adding that restriction imposed on gathering impacted the usual demands for celebratory occasions.

He explained that demand was weighed upon by a decline in consumer income, rising unemployment rate due to the shutdown of large corporations, surged in VAT and excise throughout 2020.

According to him, distribution was affected by the ban imposed on inter-state travel despite collaborating with regulatory authorities to minimize the negative impact on the company.

Here is a breakdown of the Guinness Nigeria performance in 2020 Financial Year

Guinness profit plunged by a massive 129.1 percent to -N12.6 billion in the 2020 Financial Year (FY), down from the N5.5 billion profit achieved in 2019 (FY). While the company’s gross profit nosedive by 16.9 percent from N40.13 billion posted in 2019 to N33.33 billion in 2020.

The company decline was broad-based as revenue also declined from N131.5 billion filed in 2019 to N104.4 billion in the 2020 financial year.

Accordingly, administrative cost rose from N9.9 billion in the 2019 financial year to N14.3 billion in 2020. However, the cost of sales moderated by 22 percent from N91.4 billion posted in 2019 to N71.1 billion in 2020.

Finance cost expanded from N2.6 billion in 2019 to N4.5billion in 2020 while finance income declined to N301 million in the year under review, down from N750.9 million in 2019.

Mr. Baker Magunda, said “The last quarter performance of fiscal 2020 was significantly impacted by restrictions due to COVID-19, exacerbating the already challenging economic environment. Closures of on-trade premises (bars, lounges, clubs, and dine-in restaurants), which represents the major part of the consumption occasion for our products and bans on celebratory occasions, impacted sales.

“Demand was also impacted by reduced consumer income, unemployment concerns due to the shutdown of a large number of businesses, and increases of VAT and excise throughout the year.”

Speaking further Magunda said, “Distribution was impacted by the ban of inter-state, and in some cases intra-state travel. Although, Management worked diligently with regulatory authorities to minimize the impact, this hampered our distributors’ ability to restock and have our brands available for purchase.”

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