A chartered accountant and Action Democratic Congress (ADC) governorship candidate in the last election, Funsho Doherty,
made the disclosure while asking Sanwoolu to pull the plug on the mass electric transportation deal it struck with Oando Plc last year.
Doherty, while stating that the deal raised a number of grave public concerns, noted that “There is very limited transparency around this initiative, the disclosures made by the LASG are manifestly inadequate,” he said in a public letter.
The letter addressed to the special adviser, office of Public Private Partnerships Mr Ope George was also copied to the state governor, Babajide Sanwoolu.
Others who were copied in the correspondence are House of Assembly Speaker, Hon Mudashiru Obasa; Attorney General and Commissioner of Justice, Mr Moyosore Onigbanjo (SAN).
The letter was also copied to Director General of Lagos State Public Procurement Agency, Mr Fatai Onafowote; and Managing Director of Lagos Metropolitan Area Transportation Authority, Ms Abimbola Akinajo.
The deal signed between the Sanwoolu’s administration and Oando last year, according to the company’s disclosure, provides for Onando to deploy an electric vehicle and infrastructure ecosystem, including mass transit buses, charging stations and other infrastructure.
It further projects a roll up of 12,000 buses which will transition the existing mass combustion transit buses to electric, starting with Lagos State and eventually across the country.
However, in the open letter dated May 4, 2023, Doherty said there was limited transparency around the project, stressing that given its proposed scale, public significance potential cost and possible impact the disclosures made by LASG are “manifestly inadequate.”
He also noted that the Memorandum of Understanding (MoU) on the deal has 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.”
The charters account further said the laws of the state on public private agreements were breached before the commencement of the deal.
Referencing the Lagos State law which mandates the PPP office to ensure that PPPs are in accordance with “prevailing government policy and public interest”, concessions agreements subjected to approval by the House of Assembly, Doherty said “It is not evident from the information so far disclosed in the public domain that these laws and provisions relating to PPPs were either complied with, or not applicable, prior to commencing this partnership.”
He however expressed concern that in spite of these illegalities, the deal has moved into pilot operational phase “by virtue of Oando having taken delivery of some buses and other operating infrastructure.”
Doherty, who also raised financial indiscretions about Oando PLC, added that it was baffling that Lagos state chose the company as its partner for the initiative.
“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.”