Oando Plc stocks on Wednesday declined further on the Nigerian Stock Exchange as investors continued to react negatively to a British prosecutor’s claims that jailed former Governor of Delta State, Mr. James Ibori, had “asserted ownership of a large part” of the company.
Though the management of Oando said the ex-governor only had “insignificant” holdings in the company – 443 shares out of a total issued and paid up share capital of 6.8 billion ordinary shares – investor sentiment remained negative.
At the close of trading on Wednesday, Oando emerged top price loser for the second straight day with a 9.95 per cent loss, which saw it closing at N9.32 from Tuesday’s close of N10.35.
Investors traded 13.376 million of the company’s shares on Wednesday valued at N126.310m in 473 deals as against the 8.131 million shares worth N85.916m, traded in 331 deals the previous day.
According to analysts at Proshare, as a result of the Ibori link, most firms have placed a caution tag on the Oando Plc stock.
They said, “With its current situation, that is, the alleged involvement in the money laundering saga, we envisage that an unprecedented and huge sell-down activities would hit the stock, depressing the share price of the stock further, below its elastic limit in no time – proven or otherwise.”
The analysts, however, stressed that the sell-down needed to be done by shareholders and investors with a degree of the sensible objectives as the situation presents an (un)fair opportunity among key investors to transfer wealth.
Capital market operators, who spoke with our correspondent, said the reaction to the news was, however, poorly thought-out.
The Managing Director, Enterprise Stockbrokers Plc, Mr.RotimiFakayejo, said the claims made by the British prosecutor should not have had such effect.
He said, “To me, it is not supposed to have warranted what we are seeing presently.”
According to him, this is because Oando has come out to deny the claims.
The prosecutor, Sasha Wass, was quoted by Reuters in a report on Monday as saying that money also passed from Oando’s accounts into Ibori’s Swiss accounts.
But Oando said though in 2004 it sold some of its foreign exchange earnings for naira and the recipient of the US dollars was a company, which had now turned out to be one controlled by Ibori, it wasn’t aware of that at the time.
Elaborating on her allegations, Wass told the court on Tuesday that Ibori had revealed to a Swiss private bank in 2004 that he owned 30 per cent of Oando, which paid $1.2m into his account that year.
Fakayejo explained that even if the amount had been used to buy Oando shares back then, it would have amounted to about 10 million shares, which was still no much compared to the 6.8 billion shares Oando had.
Capital market operators, however, said the development presented a good opportunity for investors, who were interested in the company’s stocks to buy its shares.