TheCable

Funso Doherty, a chartered accountant, has asked the Lagos state government to stay further action on its partnership with Oando PLC on electric mass transit buses.

Doherty was the governorship candidate of the Action Democratic Congress (ADC) in the recently concluded Lagos gubernatorial election.

In an open letter dated May 4, 2023, and addressed to Ope George, special adviser to the governor on public-private partnerships (PPPs), Doherty said the project lacked transparency.

He said it was not evident from the information so far disclosed in the public domain that the laws and
provisions relating to PPPs were either complied with, or not applicable, prior to commencing
the partnership.

“Given its proposed scale, public significance, potential cost and possible impact, the disclosures made by LASG are manifestly inadequate,” the letter reads.

“The terms of the MOU entered into by LASG with Oando have not been disclosed, including whether it is binding or non-binding, and what commitments are being made by, or required of, either party under the MOU and/or any subsequent and related agreements.”

Expressing concerns about Oando PLC, the ADC candidate described Lagos state’s choice of the company as its partner for the initiative as “baffling”.

“Oando PLC, the parent of the Group, is a publicly listed entity. Accordingly, there is substantial information about the Group and its affairs in the public domain, including: a) The Group has not filed audited accounts since 2020 fiscal year. It is currently in default on its regulatory obligation to file audited accounts for both 2021 and 2022,” the letter reads.

“b) In its most recently published (2020) audited accounts filed with the Stock Exchange, Oando reported very substantial losses for both 2020 and 2019 of N140bn and N207bn respectively. Its current liabilities far exceeded its current assets by N578bn and it had negative Shareholders Funds (i.e. net liabilities) of N67bn as at December, 2020. In its report, Oando’s independent auditor expressed the opinion that there was Material Uncertainty regarding the Group’s ability to continue as a Going Concern.

“c) In 2021, Oando PLC reached a settlement with the Securities and Exchange Commission in which it committed to pay a monetary penalty and to improve its Corporate Governance and Internal Controls. This was pursuant to sanctions that had been imposed on it by the SEC following investigation of petitions received against the Company.”

Doherty said in PPPs, there is an increased need for transparency, due-diligence and demonstrable good faith.

He added that disclosure and engagement are regarded as standard global practices that help foster public confidence and acceptance in PPPs.

“I hereby call on the PPP Office, the Public Procurement Agency and LAMATA to stay further action on this proposed partnership, to shed more light on it and address these concerns before proceeding further,” Doherty said.

“The public needs to understand the nature and scope of this initiative as well as the procedures undertaken by LASG to ensure due process, value for money and accountability.”