Sept. 17 (Bloomberg) -- Oando Plc, a Nigerian energy company, fell to the lowest on record after it refuted statements made in a U.K. court that an ex-governor from the West African nation holds a large stake.
The shares fell 10 percent to 10.35 naira by the close in Lagos, Nigeria’s commercial capital, a fifth day of declines in the longest streak of losses since June. More than 8.1 million shares were traded, or 1.5 times the three-month daily average.
James Ibori, a former governor of oil-rich Delta state, hid some assets in Oando and passed money from the company’s accounts to his own Swiss accounts, Prosecutor Sasha Wass told a London court yesterday, Reuters reported. Oando said Ibori holds 443 shares of a total 6.8 billion ordinary shares, “which is clearly insignificant,” according to a statement from the company today.
“This poses a major reputation risk to the company,” Bismarck Rewane, chief executive officer of Financial Derivatives Co., said by phone. “We think the sell-off is more of a panic. It is not a kiss of death for the company but it is definitely a black eye.”
Ibori was convicted in London last year for stealing about $250 million of public funds. The hearings are into confiscation of Ibori’s assets, according to Reuters.
“It is unfortunate that our client has been dragged into these proceedings,” Andrew Baillie, a lawyer for Oando, was quoted as saying in the statement. “There is no suggestion from the prosecution of any wrongdoing or involvement in wrongdoing on the part of Oando.”
In 2004, the company sold “$2.7 million in three separate transactions over a period of about seven months to companies indirectly controlled” by Ibori, according to the statement. “This amount was insignificant considering the company’s turnover of approximately $800 million in 2004.”
Oando shares have fallen 16 percent this year, compared with a 28 percent increase in the Nigerian Stock Exchange All-Share Index.
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