SHAL­IZA HAS­SANALI

Se­nior In­ves­tiga­tive Re­porter

shal­iza.has­sanali@guardian.co.tt

Oan­do PLC, one of three po­ten­tial bid­ders to take over the op­er­a­tions of Petrotrin’s re­fin­ery was in­ves­ti­gat­ed by the Se­cu­ri­ties Ex­change Com­mis­sion (SEC), Nige­ria in 2019.

The probe found Oan­do PLC’s man­age­ment in­volved in se­ri­ous in­frac­tions such as false dis­clo­sures, mar­ket abus­es, mis­state­ments of fi­nan­cial state­ments and cor­po­rate gov­er­nance laps­es stem­ming from poor board over­sight.

This was af­ter the SEC con­duct­ed a foren­sic ex­er­cise in­to Oan­do PLC which is one of Nige­ria’s multi­na­tion­al en­er­gy com­pa­nies.

How­ev­er, the mat­ter was set­tled in 2021. On Ju­ly 19, 2021, the SEC stat­ed that in the over­rid­ing in­ter­est of the share­hold­ers of Oan­do PLC and the cap­i­tal mar­ket, “the com­pa­ny has reached a set­tle­ment with the com­mis­sion with­out ac­cept­ing or deny­ing li­a­bil­i­ty” on four terms.

On Mon­day, Fi­nance Min­is­ter Colm Im­bert in de­liv­er­ing the 2025 bud­get named Oan­do PLC as one of three com­pa­nies short­list­ed to run the moth­balled re­fin­ery in Pointe-a-Pierre.

The two oth­er com­pa­nies are IN­CA En­er­gy LLC and CRO Con­sor­tium, a lo­cal­ly based con­sor­tium com­pris­ing three com­pa­nies, DR Com­modi­ties Ltd, Chemie-Tech and Ocala.

In all, ten com­pa­nies sub­mit­ted bids for the re­fin­ery.

Among them were IEM Re­fin­ery Com­pa­ny, GN Fence­line, Colum­bus Re­fin­ing Trinidad and To­ba­go, In­tegri­tus Group of Com­pa­nies, Nau­ti­cal Part­ners and Pa­tri­ot­ic En­er­gies Tech­nolo­gies Ltd.

Oan­do PLC, which is list­ed on the Niger­ian Stock Ex­change (NSE) and the Jo­han­nes­burg Stock Ex­change, came un­der threat fol­low­ing reg­u­la­to­ry ac­tion by the SEC in 2017.

Oan­do PLC is made up of Oan­do En­er­gy Re­sources, its up­stream sub­sidiary and Oan­do Trad­ing, its sup­ply and trad­ing sub­sidiary.

To date, Oan­do Trad­ing has ex­port­ed over 57 mil­lion bar­rels of crude oil and three mil­lion met­ric tonnes of re­fined prod­ucts.

The en­er­gy com­pa­ny suf­fered a sig­nif­i­cant de­cline in in­vestor con­fi­dence and fi­nan­cial per­for­mance as a re­sult of a board cri­sis due to pe­ti­tions by two share­hold­ers.

A press re­lease is­sued by the SEC dat­ed May 31, 2019, stat­ed that fol­low­ing the re­ceipt of two pe­ti­tions by the com­mis­sion in 2017, in­ves­ti­ga­tions were con­duct­ed in­to Oan­do PLC and “cer­tain in­frac­tions of se­cu­ri­ties and oth­er rel­e­vant laws were ob­served.”

The SEC stat­ed that they fur­ther en­gaged De­loitte and Touche to con­duct a foren­sic au­dit of  Oan­do PLC ac­tiv­i­ties.

The com­pa­ny’s shares were al­so sus­pend­ed by the SEC to ex­e­cute the foren­sic au­dit.

“The find­ings from the re­port re­vealed se­ri­ous in­frac­tions such as false dis­clo­sures, mar­ket abus­es, mis­state­ments in fi­nan­cial state­ments, in­ter­nal con­trol fail­ures and cor­po­rate gov­er­nance laps­es stem­ming from poor board over­sight, ir­reg­u­lar ap­proval of di­rec­tors’ re­mu­ner­a­tion, un­jus­ti­fied dis­burse­ments to di­rec­tors and man­age­ment of the com­pa­ny, re­lat­ed par­ty trans­ac­tions not con­duct­ed at arm’s length, amongst oth­ers,” the press re­lease stat­ed.

As part of mea­sures to ad­dress these vi­o­la­tions, the com­mis­sion di­rect­ed the “res­ig­na­tion of the af­fect­ed board mem­bers of Oan­do PLC.”

It al­so re­quest­ed the con­ven­ing of an ex­tra­or­di­nary gen­er­al meet­ing on or be­fore Ju­ly 1, 2019, to ap­point new di­rec­tors.

The SEC al­so di­rect­ed pay­ment of mon­e­tary penal­ties by the com­pa­ny and af­fect­ed in­di­vid­u­als and di­rec­tors.

It al­so di­rect­ed a “re­fund of im­prop­er­ly dis­bursed re­mu­ner­a­tion by the af­fect­ed board mem­bers of the com­pa­ny” and “bar of the group CEO and its deputy CEO from be­ing di­rec­tors of pub­lic com­pa­nies for a pe­ri­od of five years.”

The re­lease fur­ther stat­ed that as re­quired un­der Sec­tion 304 of the In­vest­ments and Se­cu­ri­ties Act 2007, the com­mis­sion would re­fer all is­sues with “pos­si­ble crim­i­nal­i­ty to the ap­pro­pri­ate crim­i­nal pros­e­cut­ing au­thor­i­ties.”

In a swift re­ac­tion, Oan­do PLC chal­lenged the SEC’s rul­ing, say­ing the al­leged in­frac­tions and penal­ties were “un­sub­stan­ti­at­ed, ul­tra vires, in­valid and cal­cu­lat­ed to prej­u­dice the busi­ness of the com­pa­ny.”

Dis­sat­is­fied with the ac­tions and to safe­guard the in­ter­ests of the com­pa­ny and its stake­hold­ers, Oan­do PLC took steps to file an ac­tion with the Fed­er­al High Court (FHC) in La­gos against the SEC and the NSE.

On Oc­to­ber 23, 2017, the com­pa­ny ob­tained an ex-parte or­der from the FHC grant­i­ng an in­ter­im in­junc­tion, via an or­der re­strain­ing the NSE from ef­fect­ing the di­rec­tive of the SEC to im­ple­ment a tech­ni­cal sus­pen­sion of the shares of the com­pa­ny and an or­der re­strain­ing the SEC from con­duct­ing any foren­sic au­dit in­to the com­pa­ny’s af­fairs pend­ing the hear­ing and de­ter­mi­na­tion of the mat­ter.

A What­sApp mes­sage was sent to En­er­gy Min­is­ter Stu­art Young on the mat­ter.

Ozzie War­wick, a di­rec­tor of Pa­tri­ot­ic En­er­gies did not re­spond to a What­sApp mes­sage yes­ter­day re­gard­ing the com­pa­ny be­ing side­lined.

Calls to OW­TU’s pres­i­dent gen­er­al and Pa­tri­ot­ic En­er­gies chair­man An­cel Ro­get al­so went unan­swered.

In Au­gust, Jin­dal Steel and Pow­er Ltd, owned by In­di­an busi­ness­man Naveen Jin­dal, end­ed in­ter­est in the re­fin­ery. In a let­ter to Prime Min­is­ter Dr Kei­th Row­ley, Jin­dal said the Op­po­si­tion’s per­son­al at­tacks were the rea­son for the change in in­ter­est.