Court Rules that Oando Minority Shareholders Cannot be Coerced to Liquidate their Shares

The Lagos Division of the Federal High Court has ruled that minority shareholders in Oando Plc cannot be forced to sell their shares against their will.

In the lawsuit involving Venus Construction Co. Ltd. and 13 other parties versus Ocean & Oil Development Partner Ltd. and another, Justice Chukwujekwu Joseph Aneke rendered the decision.

About five Oando Plc shareholders who felt wronged had attempted to join the lawsuit and overturn the court’s June 7, 2022, order requiring Ocean & Oil to pay N7.07 per share to acquire all of the company’s minority owners.  

Case facts

In a previous report, TNC stated that the Federal High Court, Lagos Division, had further postponed the court filing date of the petition (filed on March 25, 2021) in Suit No. FHC/L/CP/494/2021-Venus Construction Company Limited & 13 others vs. Ocean and Oil Development Partners Limited and Oando PLC to April 17, 2024.

The purpose of the adjournment was to allow the Court to consider applications that some shareholders had previously brought before it, requesting to be added to the Petition and contesting the June 7, 2022, order, which among other things required the Company to file its Scheme of Arrangement document (the “Scheme Document”) with the NGX and the Securities and Exchange Commission (SEC) within thirty days. 

As per the court’s order dated June 7, 2022, which mandates that the company submit its Scheme of Arrangement document to the Securities and Exchange Commission (SEC) and the NGX within 30 days, along with other instructions, the adjournment was granted to enable the company to generate a report of compliance.

The judge’s remarks

The judge granted the applicants’ request and found that the petitioners did not represent all Oando shareholders or have their consent before filing the petition.

It also modified its June 7, 2022, order, restricting its mandate to the petitioners’ shares that they have consented to sell to Ocean & Oil for N7.07 a share.

“The court cannot force Oando Minority Shareholders to sell their shares if they do not want to sell,” the judge ruled in reaching her conclusion.

This implies that Ocean & Oil will no longer acquire the minority shareholders’ shares through coercion, as originally intended.

A N100,000 cost award was also made by the Federal High Court in favour of the applicants and against the petitioners.

Things to note

On March 25, 2021, the minority shareholders of the company submitted a petition asking Oando to buy out their full shareholding, either through OODP or Oando Plc. This initiated the legal action against Oando Plc.

On the other hand, Oando submitted a cross-petition indicating that it was prepared to use a court-ordered Scheme of Arrangement to acquire out all of the company’s minority shareholders.

Oando stated its intention to delist from the NGX and JSE in March 2023, but this action is pending approval from the Federal High Court and the company’s shareholders. Because of the tumultuous delisting procedure caused by this court battle, Oando’s shares are still trading on the NGX.

On February 6, 2024, Oando concluded its trading day on the Nigerian Stock Exchange (NGX) at N13.20 per share, indicating an 8.3% decrease from its previous closing price of N14.40. Oando’s share price was N10.50 at the start of the year, and it has since increased by 25.7%.