Nigeria Ousts SEC Head Over Suspension of Oil Firm's Shares

(Bloomberg) -- Nigeria’s Securities and Exchange Commission has lost two chiefs in less than five months in the wake of an investigation into Oando Plc, a Lagos-based oil producer that also trades its shares on the Johannesburg Stock Exchange.

On Friday, Nigerian Finance Minister Kemi Adeosun suspended Abdul Zubair as acting director-general of the Abuja-based regulator and replaced him with Mary Uduk. Zubair had taken the post in December from Mounir Gwarzo, who in October ordered the probe into Oando that resulted in its shares being halted. Gwarzo had been suspended at the end of November to allow for an investigation into allegations of financial impropriety, which he has denied, according to Daily Post.

Zubair was removed after the SEC defied the minister’s orders by lifting the suspension on Oando’s stock last week, when she had asked the halt to remain in place pending a meeting of the ministry, the SEC and the Johannesburg bourse, according to the ministry.

“The minister told them not to lift that suspension; they went ahead, and took the decision on their own,” the minister’s spokesman, Oluyinka Akintunde, said by phone. Zubair’s removal is “part of efforts to instill confidence,” which was eroded last week after some market operators complained about how the Oando issue is being handled, Akintunde said.

Shares Rally

"It will affect investors’ confidence because you really do not want a lot of back and forth from the regulators, and that is what we have seen," said Olalekan Olabode, an analyst at Vetiva Capital Management based in Lagos.

The energy firm came under scrutiny after a review found alleged corporate governance failures and financial mismanagement, which Oando denied. The company’s shareholders have “suffered” because the company has taken many steps over the past six months that would’ve shored up the share price, Oando spokeswoman Obehi Ojeaga said, declining to comment about the SEC appointments.

Uduk, the new acting head of the SEC, joined the commission in 1986 where she led several departments including Investment Services. She oversaw the banking and insurance industry consolidations between 2005-2007, the finance ministry said in a statement. Her immediate predecessor, Abdul Zubair, was redeployed to the institution’s external relations team.

Oando shares rose 9.4 percent on Monday, extending gains since the suspension was lifted on April 11 to 26 percent.

"The removal of the DG at short notice is not good,” said Dolapo Oni, the Lagos-based head of Ecobank Energy Research.

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