Thursday 12 April 2018 4 BUSINESS DAY C002D5556 Commodities Brent Oil $70.61 Cocoa US $2,524.00 Japaul losses hit N13.02bn in FY 17 BALA AUGIE NSE Biggest Gainer Biggest Loser Mobil Betaglas N192 7.56pc N71.95 -4.95pc 40,846.24 Japaul Oil and Maritime Services (JOM) Plc released its results yesterday showing total liabilities of N56.17 billion as at December 2017, exceeded total assets of N28.18 billion. This resulted in a negative shareholders fund of N28.17 billion in the period under review. Negative shareholder equity on a company’s balance sheet is a red flag that should prompt potential investors to take a closer look before committing their money. Negative stockholders equity arises when a firm has been recording recurring losses throughout its existence and if symptoms persist could lead to bankruptcy. Japaul Oil has negative retained earnings of N49.18 billion. For the year ended December 2017, the Maritime service firm Fresh twist in Oando suspension... Continued from page 1 on Oando shares. It would be recalled that the NSE had in the letter signed by Tinuade T. Awe, executive director, regulation, notified Oando Plc of the lifting of technical suspension on trading in its shares. The NSE letter was dated April 10, 2018 and addressed to Ayotola Jagun, company secretary, Oando Plc. “We refer to all prior communication regarding the technical suspension of trading in the shares of Oando Plc (Oando) implemented on the directive of the Securities and Exchange Commission (Commission) on 23 October 2017. “Please, be informed that further to a 9 April 2018 directive of the Commission, The Exchange lifted the technical suspension placed on Oando’s shares after the close of trading today, 10 April 2018. Consequently, there will be no impediment to price movement in the shares of Oando when the market opens for trading (tomorrow), 11 April 2018,” NSE stated. This development in Nigeria’s capital market is raising questions on who is controlling the Nigerian financial market – individuals or the institutions. “Both the NSE and SEC owe it to the general public to give us good reason why this has happened,” an informed market source said Wednesday. According to our source, “This level of indecision with the financial gate keepers of the country is disgraceful! The international market is watching, foreign investors are watching and once again, the NSE and SEC have made a mockery of the market.” No reason was given by the NSE for the continuous placing of the company shares on technical suspension even after early trading yesterday. Several calls and messages to personnel in the communications department of Nigerian Stock Exchange (NSE) were neither returned nor replied as at press time. “We don’t know what is going on again. We woke up this morn- recorded a loss after tax of N13.20 billion as against N21.01 billion loss recorded the previous year. Sales dipped by 38.11 percent to N1.90 billion in the period under review as against N3.07 billion loss recorded the previous period. The firm attributes weak sales to weak economic fundamentals that hit the oil and gas sector with its impact on the maritime industry. A drop in oil price and a severe dollar shortage that hindered companies from importing raw materials and equipment to meet production saw the country slip into its first recession in 25 years. However a rebound in crude oil price and production coupled with a favourable foreign exchange policy helped the country exit the recession in 2017. The gross domestic product of Africa’s largest oil producer expanded for three straight quarters last year after a 1.6 percent contrac- ing and were very happy but all of a sudden the story changed. But the NSE is not saying anything. It is causing a lot of confusion. The social media is agog,” an investor in Oando Plc told BusinessDay. Meanwhile, a top executive at the SEC who spoke to BusinessDay simply said “We directed for the lifting of technical suspension on the shares of Oando Plc so investors can trade their shares while the forensic audit is going on. If they said we have suspended it again, did you see another letter to that effect? As far as we are concerned technical suspension on Oando Plc shares have been lifted. Wait till tomorrow morning (Thursday morning) and see. Maybe they have their own in house issues at the NSE”. Currently, Deloitte is carrying out a forensic audit of Oando under the instructions of SEC. In a letter on the Nigerian Stock Exchange dated April 11, 2018, Oando Plc informed the public and its stakeholders that its Board of Directors held a meeting on Tuesday, April 10, 2018 and approved the 2017 Audited Financial Statements (the Accounts). Oando Plc expects to be in a position to file the accounts by the second week in May 2018 “as previously communicated”. Meanwhile, there was a fresh twist, Wednesday, to the forensic audit of Oando, after one of the firms charged with the task of carrying out the audit said the process was yet to commence, thereby contradicting an initial guidance by SEC that the audit commenced in March. In a text response to Business- Day questions, Nasir Muhammad, a principal partner in Nasiru Muhammad and Co, one of the five firms engaged by SEC for the audit on Oando, said “To date, our firm has not been notified to move to Oando site yet, either by SEC or the lead consultant, Deloitte. “And our engagement letter has not been vacated/withdrawn to our knowledge at the moment,” Muhammad said from Port-Harcourt on Wednesday. businessday market monitor Bitcoin Everdon Bureau De Change 2,426,498.59 +0.81pc Powered by $-N £-N €-N BUY SELL 360.00 363.00 500.00 510.00 436.00 446.00 tion in 2016, with year-on-year growth reaching 1.9 percent in the final three months of 2017. Japaul Oil’s total expenses of N8.41 billion is 4.4 times revenues recorded in the period under review, which resulted in operating loss of N1.79 billion. The Maritime firm is highly geared or indebted as its capitalization ratio (ratio of total liabilities to total assets) increased to 200.06 percent in December 2017 as against 163.52 percent as at December 2016. A high capitalization ratios or gearing level means the large chunk of the firm’s balance sheet is financed by via debt. In other words, the firm is exposed to financial risk as it will have to pay huge interest out of already battered earnings. Japaul Oil’s finance costs or Continues on page 38 L-R: Jordi Borrut Bel, MD/CEO; Mark Rutten, finance director, and Kufre Ekanem, corporate affairs adviser, all of Nigerian Breweries (NB) plc, during the company’s pre-annual general meeting/press briefing in Lagos, yesterday. Pic by Pius Okeosisi The five firms engaged by SEC for the Oando audit are TJADAF Consulting, the stockbrokers engaged to review the allegations of insider dealings; Akintola Williams Deloitte and Touche, the forensic auditors engaged to review the allegation of financial misappropriation; Nasiru Muhammad and Co, joint forensic auditors; SP Ajibade and Co, the legal counsel engaged to review all the legal documents; and United Securities Plc, the registrars engaged to review and authenticate the register of the company with a view to ascertaining the true shareholding position of the shareholders. Olukoju Anthony, a managing partner at Deloitte, did not answer two phone calls seeking clarification over the matter. Akintunde Odunsi, the managing director at TJDAF consulting, another of the five firms tapped by SEC for the Oando audit referred our reporter to the SEC. A source at SEC claimed the audit was on and that Deloitte was currently on site. On October 18, 2017, the SEC ordered a forensic audit of Oando’s affairs following petitions from two of the company’s shareholders FOREIGN EXCHANGE TREASURY BILLS Market Spot $/N 3M 6M I&E FX Window 359.81 -0.09 -0.51 CBN Official Rate 305.55 13.19 14.75 Progressives Congress (APC). The President Buhari stated this when he received the Archbishop of Canterbury, His Grace Justin Welby in London Wednesday, at the Nigerian House in London, according to a statement by Special Adviser to the President on Media and Publicity, Femi Adesina. According to the President “I declared before leaving home because Nigerians were talking too much about whether I would run or not. So, I felt I should break the ice. We have many things to focus on, like security, agriculture, economy, anti-corruption, and many others. We needed to concentrate on them, and politics should not be a distraction. The majority of Nigerians appreciate what we are doing, and that is why I am re-contesting.” The President recounted some successes of the administration to his guest, with whom he has built a deep friendship in recent times, and was quite particular about over alleged insider dealings and manipulation of the company’s shareholding structure allegedly in breach of the Investments and Securities Act 2007 and the SEC Code of Corporate Governance for Public Companies. The Oando crisis thickened and soon led to the suspension of former Director General of SEC, Mounir Gwarzo. Gwarzo’s temporary replacement, Abdul Zubair, said last month that the commission has transmitted its directives to Oando for the commencement of the forensic audit. Zubair said at the time that “the SEC has duly informed the firm of Akintola Williams Deloitte and Touche to proceed with the audit. He also stated that the “audit will proceed immediately in a transparent and thorough manner.” Minority Shareholders Association of Oando Plc under the aegis of Proactive Shareholders Association of Nigeria (PROSAN) sent a petition to the House Committee on Capital Market accusing the SEC of shielding Oando Plc from the audit exercise. The petition was signed by FMDQ Close 5 Years 0.00% 13.50% FGN BONDS 10 Years 0.04% 13.68% 20 Years -0.02% 13.53% Buhari meets Archbishop of Canterbury... Continued from page 1 strides in agriculture. “We have cut the importation of rice by about 90 percent, saving billions of dollars in the process. People who rushed into petrol money have now gone back to agriculture. Even professionals have gone back to the land. Nigeria should be able to feed itself comfortably soon. I am so pleased,” the President said. On the war against insurgency, he stressed the need for continuous education of the people, “so that they can be free from religious manipulation,” adding that no true religion advocates the hurting or killing of the innocent. Responding to his guest’s comment on the clashes between herdsmen and farmers in different parts of Nigeria, the President submitted: “The problem is even older than us. It has always been there, but now made worse by the influx of armed gunmen from the Sahel region into different parts of the West African sub-region. These gunmen were trained and armed by Muammar Continues on page 38 Taiwo Odeninde and Barrister Nnodu Okeke as National coordinator and Treasurer, and the petition was captioned “Dangerous and malicious and deliberate attempt by the Acting DG of SEC, Abdul Zubair to cover up Oando plc and protect the company from the forensic audit. Another group of Concerned Shareholders of Oando Plc also on Tuesday April 10, 2018 called on President Muhammadu Buhari; Vice President Yemi Osinbajo; Senate President Bukola Saraki; Speaker, House of Representatives, Yakubu Dogara and other well-meaning Nigerians to prevail on the Nigerian Stock Exchange (NSE) and the Securities & Exchange Commission (SEC) to lift the technical suspension placed on the shares of Oando without any further delay. Patrick Ajudua, head of the Concerned Shareholders of Oando said the continued suspension of Oando shares was sending wrong signals to the global community about the seriousness of the Federal Government in attracting foreign direct investments (FDIs) to bolster the economy.
Thursday 12 April 2018 BUSINESS DAY 5