Crises In Oando As Minority Shareholders Drag Tinubu
OpenLife Nigeria reports that the share crisis rocking OANDO Plc has snowballed into legal tussle as five aggrieved minority shareholders of the company have dragged the Chief Executive Officer of the company Mr.Wale Tinubu and eleven others before a Federal high court in Lagos.
The minority shareholders are alleging a case of classical cheating as well as short-changing by buying their shares for far less than what was paid when the shares were purchased.
Consequently, the five minority shareholders are seeking about 25 reliefs from the court, Among them are the general damages in the sum of N10 million and order of the court restraining the respondents from taking any step or making omission capable of undermining the rights, privileges of the Applicants as it relates to their respective Shareholding and membership of OANDO,ARDOVA and CORONATION INSURANCE PLC.
An affidavit deposed to by Chief Aderemi Egunjobi, one of the minority shareholders and filed before a Federal High Court in Lagos by a Lagos lawyer, Dr.Abiodun Layonu who is also a minority shareholder Chief Egunjobi stated thus:
Description Of Parties
The first Applicant a Lagos business man Chief Aderemi Egunjobi,is the alter ego of the 2nd Applicant, Fairdeal Investment Company Nigeria Limited, a private limited liability company.
The third Applicant KAMORU TOYE OYEROGBA Fourth Applicant PILLAR FAST NIGERIA LIMITED and Dr ABIODUN Layonu SAN are all shareholders of OANDO
The 1st Respondent, is OANDO a public limited liability company currently operating in the Nigerian Stock Market.
The 2nd Respondent OCEAN AND OIL DEVELOPMENT PARTNERS is a private company and the majority shareholder of the 1st Respondent OANDO PLC.
It is the 2nd Respondent that is being proposed as the corporate entity to compulsorily acquire the individual shares of the Applicants and other minority shareholders of the OANDO.
The 5th Applicant CORONATION INSURANCE PLC is also a shareholder and member of 3rdApplicant ARDOVA and 5th Respondent CORONATION INSURANCE PLC, which are public limited liability companies currently operating in the Nigerian Stock Market.
The 4th Respondent IGNITE INVESTMENT AND COMMODITIES LTD is the majority shareholder of the 3rd Respondent ARDOVA and is the corporate entity being proposed as the compulsory acquirer of the shares of the 5th Applicant CORONATION INSURANCE PLC and in the 3rd Respondent ARDOVA.
The 6th Respondent CORONATION CAPITAL (MAURITIUS) LTD is a private company and the majority shareholder of the 5th Respondent CORONATION INSURANCE PLC.
It is the 6th Respondent CORONATION INSURANCE PLC as Lead Core Shareholder, that is seeking alongside other Core Shareholders such as Reunion Energy Limited, Coronation Asset Management, Trust and Capital Limited, United Alliance, Chizoba Ufoeze, Aigbovbioise Aig-Imoukhuede, Herbert Wigwe, Aigboje Aig-Imoukhuede and Estate of Emily Okhenren Aig-Imoukhuede collectively own 17,609,892,757 ordinary shares,representing 73.40% in of the issued share capital of the 5th Respondent shares, to compulsorily acquire the shares of the 5th Applicant in the 5thRespondent .
The 7th Respondent, SECURITY and EXCHANGE COMMISSION is the Agency of the Federal Government charged with the responsibility of regulating the conduct and affairs of public limited liability quoted Nigerian or unquoted companies in the Nigeria capital and saddled with the mantle of maintaining the integrity of the capital market—Publicly quoted companies.
The 8th Respondent NIGERIAN EXCHANGE is a company registered under the laws of Federal Republic of Nigeria and had the responsibility of managing the daily affairs the daily of the affairs the publicly quoted companies in the Nigerian Stock Exchange.
The 9th Respondent CORPORATE AFFAIRS COMMISSION is an agency of the Federal Government created pursuant to the companies and Allied Matters Act and charged conduct with the responsibility of registration and supervision of the daily conduct of the companies in Nigeria.
He states that the 7th and 9th Respondents have the statutory power to reject any proposal, made by a company as it relates to the capital market and the corporate world interest where doing so would bring the overall interest of the shareholders and members of the company and the investing Nigerian and Non-Nigerian public.
It is also the collective obligation of the 7th to 9th Respondents to maintain the day-to-day integrity and transparency of trading and business affairs on the floor of the Nigerian Stock Exchange.
10th Respondent Mr.Wale Tinubu is a director of the OANDO Plc and the Ultimate Beneficial Owner (UBO) and/or Ultimate Controlling Interest (UCI) of the 2nd Respondent OCEAN AND OIL DEVELOPMENT
11th Respondent Mr.ABDULWASIU SOWAMI is a director of the 3rd Respondent ARDOVA and the UBO and/or UCI of the 4th Respondent IGNITE INVESTMENT AND COMMODITIES LTD.
The 12th Respondent Mr.AIGBOJE AIG-IMOUKHUEDE is the UBO and/or UCI of the 6th Respondent CORONATION CAPITAL MAURITIUS LTD, is also one of the Core Shareholder of the CORONATION INSURANCE PLC.
Chief EGUNJOBI further stated that he owns about 1,000,000 shares in the OANDO. He explained that his shares were purchased in the open market at the floor of the Nigerian Stock Exchange at different times between 2014 to 2021 and at varying prices up to over N27.00.
He also acquired 811,000 shares in OANDO using his company the 2nd Applicant. The share purchased market were through the open market.
The 3rd Applicant Mr KAMORU OYETOLA OYEROGBA also a shareholder of OANDO purchased 5000 shares in the open market.
The 4th Applicant PILLAR FAST NIGERIA LIMITED initially purchased 155,250 shares in OANDO in the open market. The shareholding of the 4th Applicant this has now risen to 415,500.
The 5th Applicant, Dr.ABIODUN I.LAYONU has millions of OANDO shares.
He also owns about 257,966 (as at the time of filing) of shares in ARDOVA and over 3,000,000 units of shares in CORONATION INSURANCE PLC both acquired in the open market of the Nigerian Stock Exchange at the peak or average price of N25 per share in respect of the shares of ARDOVA and 87 Kobo in respect of the shares of the CORONATION INSURANCE PLC Respondent.
All the Applicants acquired their respective shares from the 1st, 3rd and 5th Respondents at peak and premium prices far above the present offer of the 1st to 6th and 10th to 12th Respondents for the repurchase of the Applicants’ shares.
The Applicant’s Cause Of Action And Grievance Against The Oando, Ocean And Oil Development Partners And Mr.Wale Tinubu
On 30th March, 2023, OANDO released a Corporate Notice widely reported in the media. In the said Corporate Notice, the company
informed its shareholders and the general public of the following facts:
1.OCEAN AND OIL DEVELOPMENT PARTNERS as majority shareholder of OANDO want to purchase the shares minority shareholders of OANDO at [hugely discounted] sum of N7.07k Seven Naira, seven kobo per share.
2. OANDO wants to delist from both the Nigerian and South African Stock Exchanges as a publicly quoted company.
3. The company has applied to SEC to be issued no objection delist from the Nigerian Stock Exchange;
4.OANDO wants to re-register as a private company.
Upon receipt to the company’s corporate notice himself and other Applicants were greatly shocked by this information hence they instructed their solicitors to find out more regarding the attempt to purchase the shares of the minority shareholders of the company at the price of N7.07.
Through their solicitors, they discovered and became aware of the following:
That Suit No: FHC/L/CP/494/2021- Venus Construction Company Limited &13 Orders for on behalf of minority shareholders of OANDO Plc versus Ocean and oil Development Limited & OANDO PLC was filed by the petitioners
on 25th March, 2021, wherein they prayed the Court for an Order that the 1st Respondent (that is OODP) purchase the entire shares of the Petitioners at the average price of the share price as listed on the NGX for a period of three (3) months prior to the date of the Order or at a valuation to be established pursuant to an order of court or alternatively, an Order that the 2nd Respondent (that is OandO Plc) purchase the shares of the Petitioners at the average price of the 1st Respondent’s share price as listed on the NGX.
That a Cross-Petition was filed by OODP on 16th March, 2022, wherein it prayed the Court for an Order that OODP shall prepare within 30 days a Scheme Document for the purchase of all the Minority Shareholders Shares in OandO Plc for submission to SEC and/or the NGX as may be necessary, amongst other reliefs.
That on 7th June, the 2022, Justice C.J. Aneke made the following Orders:
An Order directing the 2nd Respondent to the Petition that is OANDO PLC to carry out scheme of arraignment to consider the OODP proposal to buy out the shares of minority shareholders in the respondent to the Petition 2nd.
An Order that OODP shall prepare within 30 days a Scheme Document for the purchase for the purchase of all the minority shareholders share in OANDO PLC for the submission to SEC and NGX as may be necessary
Order directing OandO Plc within 120days a meeting of the holders of its fully Ordinary shares r their authorized duly authorized representatives to consider and if thought appreciate, approve with or(without modifications) a proposed Scheme of Arraignment by OODP for the purchase of all the minority shareholders’ shares in OandO Plc.
An Order directing that the Meeting so convened be held and conducted in the manner that General meetings of OANDO PLC are normally convened in accordance with the provisions OANDO’s Article of Association and CAMA.
The suit is still pending in Court and the Scheme of Arrangement 2023 is yet to be finalized. The suit is scheduled to come up on 10th October, to enable report by the 1 st and 2nd Respondents of their compliance with the Court’s Order dated 7th June, 2022 and update the Court on the status of the Scheme of Arrangement.
An application has already been made to SEC, that is, on the sanctioning and approval of the Scheme of Arrangement proposed by the 1st and 2nd Respondents.
That a Meeting of the shareholders of the OANDO would be convened where the proposed Scheme of Arrangement would be presented and if approved by 3/4 (75%) of the shareholders present and voting, a report of the Court Ordered Meeting will be submitted to the Court within 30 days for the Court to sanction the Scheme.
However, as at the time of filing this suit, Chief Egunjobi and the other Applicants have not received any Notice of Meeting and there is no information in the media regarding whether the meeting has been held.
Miffed by the above stated development, a letter dated 11th April, 2023, was written to the SEC by their Solicitors.
In the said letter,they humbly prayed the SEC to reject/refuse OANDO’S plan to forcefully purchase the share of the minority shareholders,delist from the stock market and convert to a private company.
The Applicants are vehemently opposed to the OODP purchasing their shares for N7.07K and OANDO delisting from the stock market,and Applicants are not desirous of selling their shares held in OANDO to OODP or any other buyer for that matter, especially for the N7.07k per share price proposed.
Having regard to the amount the Applicants paid for the shares and the value of same when the shares were bought, coupled with the fact that dividends were not paid for several years to shareholders/ the Applicants, it would be greatly unfair, unjust and inequitable for the shares of the Applicants to be purchased for N7.07K per share by the OODP and for the OANDO to be allowed to exit the stock exchange.
The present step being taken by the 1st and 2nd Respondents is unfairly prejudicial and oppressive to the Applicants as minority shareholders. The attempt to purchase the shares of the Applicants is clearly geared towards short-changing the Applicants and causing them great financial loss which was not envisaged at the point of purchasing the shares.
Indeed some shareholders’ association had made press releases complaining about the conduct and intended actions of the 1st, 2nd and 10th Respondents on their proposal to delist from the stock market and purchase shares of minority shareholders for peanuts.
Furthermore to the voting whether or not to approve the Scheme of Arrangement, would be by “Poll” and the Applicants do not have enough shareholding in the OANDO PLC to be able to compete fairly against the 2nd and 10th Respondents.
It is therefore very likely that the 2nd and 10th Respondents would be able to use their influence to get the approval they require for the proposed Scheme of Arrangement and for the compulsory purchase of the shares of the Applicants.
OANDO has not released any Scheme of Arrangement Document for the Applicants and other shareholders to even be abreast of the terms of the compulsory acquisition.
That Dr.Layonu claim he did not receive notice of any meeting neither is vehemently opposed to the purchase of his shares in the ARDOVA for the sum of N17.38K per share.
That the 5th Applicant Dr ABIODUN LAYONU SAN is not desirous of selling his shares held in the ARDOVA to IGNITE INVESTMENT AND COMMODITIES LTD the or any other buyer for that matter, especially for the N17.38K per share price proposed.
Having regard to the amount he paid for the shares and the value of same when the shares were bought, coupled with the dividend that has not been paid to him for some years now, it would be greatly unfair, unjust and inequitable for his shares to be purchased for N17.38K per share.
That the present step being taken by the 3rd and 4h Respondents is unfairly prejudicial and oppressive to him as a minority shareholder.
DR ABIODUN LAYONU’s grievance and cause of action against the CORONATION INSURANCE PLC CORONATION CAPITAL MAURITIUS LTD and MR AIGBOJE AIG IMOUKHUEDE
That he is a shareholder in the 5th Respondent and holds over 3,000,000 shares purchased in the open market of the stock exchange.
That on 4th July, 2023, the CORONATION INSURANCE PLC Respondent released a Corporate Notice widely reported in the media and published on its website www.coronation.ng.
In the said Corporate Notice, the it informed its shareholders and the general public that the CORONATION as Lead Core Shareholder and other purported Core Shareholders, have approached the Board of Directors of the Company with an intention to acquire the shares held by minority shareholders of the CORONATION CAPITAL PLC for the CORONATION INSURANCE the price to of be 65 delisted Kobo from (65K) the per stock share
Arrangement wherein the shares of shareholders are purchased for a meagre price fixed by the Buyer and to the economic detriment of the minority shareholders. Even if there was such a provision which is not the case, any amount proposed for the purchase of the shares of minority shareholders, must be fair, reasonable, proper and in the overall interest of the company.
The action and present proposal of the 5th 6th 12th Respondents and other Core Shareholders to buy out minority shareholders at the rate of 65K per share, represents a very unfair and unjust way of acquiring the shares of the Dr Abiodun Layonu and other minority shareholders of the CORONATION Plc having regard to the fact that the shares in question were purchased by him at the price of 87K per share which is much higher in value and price than the 65K per share price being offered by the 5th 6th and 12th Respondents.
Aside the fact that the naira has lost value compared to what it was before, the 65K being proposed, represents a great financial disservice to what Dr.Layonu spent in acquiring those shares in the open market of the stock exchange.
Purchase of shares being an investment opportunity, the 5th, 6th and 12th Respondents clearly want to frustrate him financially by their present attempt to purchase the shares of minority shareholders for peanuts and in the process ensure they suffer avoidable losses.
That the present attempt to compulsorily acquire the shares of minority shareholders of the CORONATION INSURANCE PLC, is mischievous and amounts to short-changing the shareholders by buying their shares for far less than what was paid when the shares were purchased.
That the present attempt to compulsorily acquire the shares of minority shareholders of the 5th Respondent, is mischievous and amounts to short-changing the shareholders by buying their shares for far less than what was paid when the shares were purchased.
He is vehemently opposed to the purchase of his shares in the 5th Respondent for the sum of 65K per share.
That the 5th Applicant is not desirous of selling his shares held in the 5th Respondent to the 6th Respondent or any other buyer for that matter, especially for the 65K per share price proposed. That if given and able the opportunity, investors, are the prepared 5th Applicant to buy along the with shares other are ready,6th Respondent in the CORONATION INSURANCE PLC at the proposed price of 65K.
That it is appropriate in the circumstance for either the Honourable Court or the SEC in its capacity as chief regulator of the capital market, to appoint an independent valuer or valuers for the purpose of determining the fair, accurate, proper and just pricing of the shares of the 5th Respondent
Consequently, the Applicants are urging the court to grant all their reliefs.
The court has made an order granting leave to the Applicants to serve their originating summons and other front loaded Court
processes dated 26Th July, 2023 as well as all Orders and subsequent Court processes filed in respect of this matter on the 101h Respondent, Mr. Wale Tinubu, by delivering a copy of the aforesaid Court processes to the registered address of the 1st Respondent, Oando Plc, situate at The Wings Complex, 17A, Ozumba Mbadiwe Street, Victoria Island, Lagos State.
That an order is hereby made granting leave to the Applicants to serve their originating summons and other front loaded Court processes dated 26th July, 2023, as well as all Orders and subsequent Court processes filed in respect of this matter on the 11th Respondent, Mr. Abdulwasiu O. Sowami, by delivering a copy of the aforesaid Court processes to the registered address of the 3rd Respondent, Ardova Plc, at 1, AP/Conoil Road, Ijora, Lagos State.
That an order is made granting leave to the Applicants to serve their originating summons and other front loaded Court processes dated 26th July, 2023, as well as all Orders and subsequent Court processes filed in respect of this matter on the 12th Respondent, Mr. Aigboje Aig-Imoukhuede, by delivering a copy of the aforesaid Court processes dated 26th July, 2023, as well as all Orders and subsequent Court processes filed in respect of this matter on the 12th Respondent, Mr. Aigboje Aig-
Imoukhuede, by delivering a copy of the aforesaid Court processes to the registered address of the 5th Respondent at 119, Awolowo Road, Ikoyi, Lagos State.
An Order of the Honourable Court deeming service on the 6th, 10th to 12th Respondents as prayed above, as proper service for the purpose of hearing and determination of this Suit and all Application filed.