A Lagos Federal High Court, presided over by Justice Ibrahim Nasir Buba, yesterday dismissed a suit filed by Stanbic IBTC Plc against the Financial Reporting Council of Nigeria, FRCN, challenging the N1 billion and sanction imposed on it by the regulatory council.
Stanbic IBTC Plc instituted the suit against FRCN seeking to know if the regulatory body has the power to determine its failure to register with National Office for Technology Acquisition and Promotion, NAOTAP.
Stanbic IBTC Plc in its originating summons before the court, also asked the court to determine, among others, whether FRCN has the power to impose a fine of N1 billion on it.
It also sought a declaration that the effect of non-registration of an agreement under the NOTAP Act is as stated in Section 7 of NOTAP Act, namely to prevent payment or remittance of money to any person outside Nigeria in respect of the unregistered agreement. Similarly, it sought a declaration that FRCN has no power to dictate to a public interest entity, the type of commercial agreements that it may enter into in the conduct of its business.
FRCN had sanctioned Stanbic IBTC over its audited accounts for 2013 and 2014, and also suspended the bank’s chairman, Mr. Atedo Peterside, and its Chief Executive, Mrs. Sola David-Borha, barring them from vouching for the integrity of any financial statements in Nigeria.
However, before Justice Buba dismissed the Stanbic IBTC Plc’s suit, he had dismissed all objections filed by FRCN and other respondents in the suit.
Stanbic IBTC Holdings Plc said FRCN, since August 3, had been investigating its audited accounts for the year ended December 2014. Adding that the investigations showed that liabilities accrued in its 2014 accounts in respect of franchise fees owed to Standard Bank of South Africa, the registration of which, it said, has been pending before the National Office for Technology Acquisition and Promotion, NOTAP, since 2011.
The plaintiff said FRCN labelled the franchise agreement as illegal, and invited IBTC Holdings’ Chief Executive Officers to appear before it. And that following a meeting on October 16, the Council informed it that it committed criminal offences and that it would be reported to the Economic and Financial Crimes Commission, EFCC, the Central Bank of Nigeria, CBN, and the Securities and Exchange Commission, SEC.
FRCN then asked the entire Stanbic IBTC Board to meet with the council to know the extent of the board involvement in the matter.
Stanbic IBTC sued, praying the court to determine whether FRCN acted beyond its powers.
It also sought a declaration that failure to register a “registrable” agreement under the NOTAP Act is not a criminal offence.
Arguing FRCN’s objections before the court, its lawyer Olusina Sofola, SAN, said IBTC did not comply with Section 66 (3) of the FRCN Act, which states that anyone dissatisfied with any decision should appeal to its Technical Committee. And urged the court to strike out the Stanbic IBTC’s suit.
Sofola, SAN, had also informed the court that Stanbic IBTC was seeking to review FRCN’s decisions, therefore they should have brought an application for a judicial review, which renders the plaintiff’s originating summons incompetent. Adding that the bank should have sued the Minister of Trade, who made the regulations on the basis of which sanctions were imposed on the plaintiff, not FRCN that merely implemented them.
But Stanbic IBTC’s lawyer, Prof Fidelis Oditah (SAN) said the plaintiff did not need to join the Minister.
FRCN had based its sanctions on issues raised by the bank’s minority shareholders led by the Mahtani brothers, who own the Churchgate conglomerate, to some other regulatory agencies such as NOTAP, SEC and CBN, among others.

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