Minority shareholders demand governance overhaul at Oando Plc amid delisting concerns

Oluwatosin Racheal Alabi -

Key Points

  • Minority shareholders are demanding stronger governance and transparency from Oando Plc amid its recent delisting notice and ongoing financial disclosures.
  • Shareholders criticize management practices, including longstanding profit distribution policies favoring majority shareholders, which they argue undervalue minority stakes.
  • Despite reporting solid 2023 financial results, Oando faces pressure from shareholders to improve corporate accountability and involve them in future decision-making.

Minority shareholders of Oando Plc, a leading Nigerian energy firm, are calling for enhanced governance and regulatory oversight as the company faces uncertainty after its recent delisting notice. These shareholders argue that Oando’s current governance practices leave minority investors vulnerable, particularly during this transitional period.

Advocating for inclusive decision-making and protection of shareholder rights

Legal advocate Iseoluwa Abiodun-Johnson has called for Oando’s leadership to involve minority shareholders in key decisions impacting company value and direction. Abiodun-Johnson highlighted unresolved governance issues dating back to the 2019 SEC directive for the board to resign, which negatively affected shareholders financially. He insists that Oando’s management must embrace transparency and protect minority shareholders’ rights.

A significant grievance is Oando’s longstanding policy of collecting a nine percent management and technical fee from gross profits, a practice that shareholders argue creates conflicts of interest, limits price discovery, and disproportionately benefits majority stakeholders on the board. The lack of audited financials for 2023 has also raised concerns, with shareholders like Robert Adinuba Ibekwe expressing frustration over the unclear financial health of the company.

Strong financial performance overshadowed by governance issues

Despite these concerns, Oando reported a 42.73 percent revenue increase in 2023, reaching N2.85 trillion, with a profit after tax of N60.28 billion. While the results have offered encouragement to some, skepticism remains among shareholders due to the lack of timely communication, including the absence of an Annual General Meeting (AGM) to discuss financials and governance improvements.

As Oando navigates its delisting status, minority shareholders are calling for a stronger commitment to corporate governance, constructive engagement with regulatory bodies, and a transparent approach to shareholder accountability. Market analysts believe Oando’s response to these issues will be closely watched, potentially setting an important precedent in Nigeria’s financial market on protecting shareholder interests and upholding trust through transparent governance. The coming months are expected to be critical as Oando balances operational growth with shareholder accountability in its evolving journey.