Why Oando Scandal Matters via thisdaylive
Understanding the workings of the Nigerian economy is like trying to read a doctor’s prescription. It is never an easy task. That explains why when I see two or more ‘experts’ arguing about movement of share capital, ‘bullish runs’ and all that, I try as much as possible to keep my distance.
In a press statement last Friday, the Securities and Exchange Commission released the report of their investigation into the operations of Oando Plc, spanning a period of two years.
According to Léonce Ndikumana, a renowned professor of economics with a focus on Africa, “private sector corruption deserves as much attention due to its equally debilitating effects on economic activity”, especially in Nigeria. “A common form of corruption in the financial sector is insider trading, which allows influential insiders including top-ranking managers in the industry to make profits from moving ahead of the market.
In the United States, one of the most celebrated of such cases was that of Mrs Martha Stewart, a famous retail businesswoman and television personality. In an attempt to avoid a loss of $45,673 in December 2001, Stewart sold her 3,928 shares in ImClone, after finding out that the company’s new cancer drug, Erbitux, had been rejected by the regulatory authority. That ‘small amount’ triggered a fraud investigation and eventual prosecution.
Oando at a time accounted for not less than five percent of forex inflows through the secondary market. With an annual turnover of $1.2 billion, it is one of the 10 biggest sources of interest income for the Nigerian banking system. But the company is now in trouble, whatever may be the eventual outcome of the current crisis.
That should compel SEC to be thorough and rigorous while ensuring that Oando directors are availed all their rights under the law. But this is one issue that cannot be swept away with the APC broom. In Nigeria, private sector corruption is part of what drives most of the looting we see in the public sector. This is perhaps the only country where quoted companies go bankrupt and the public loses huge investments yet no corporate big fish ever goes to jail.
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