Shareholders in Nigeria, under the aegis of Shareholders’ Association of Nigeria, on Thursday, filed before a Lagos Federal High Court, an application to commit the Chief Executive Officer of Financial Reporting Council of Nigeria, FRCN, Mr. Jim Obaze, to prison for disobeying a court order.
Joined as co-defendants in the committal proceedings suit are: Minister of Trade and Investment; Financial Reporting Council of Nigeria, FRN, the Attorney General of the Federation, and the Steering Committee on the National Code of Corporate Governance.
However, the presiding judge, Justice Okon Abang, adjourned the hearing of the application till November 20.
Justice Abang adjourned the hearing of the application following passionate plea by Obaze’s lawyer, Emmanuel Akpudugu, who urged the court for more time to file his response to the Shareholders’ application.
The shareholders want the FRCN boss jailed for implementing the Financial Reporting Council of Nigeria’s Guidelines/Regulations for Inspection and Monitoring of Reporting entities, published as Notice 94 in the official gazette of government dated October 6, 2014 (FRC Regulations) despite being aware of a suit pending before the court challenging the financial regulations which formed the basis on which Stanbic IBTC Bank and its directors were sanctioned.
The Shareholders’ suit, which was filed by 10 members led by Chief Timothy Adesiyan, is also challenging the implementation of the FRC Regulations, despite the fact that there is a suit before the court, since February 27, 2015, challenging such regulations.
Other plaintiffs in the suit are: Mr. Sulaiman Adenrele, Prince Sunday Ogunnowo, Mr. Frederick Oduyemi, Chief Robert Igwe and Mr. Bello Owonikoko. Others are: Mr. Lazarus Onwuka, Mr. Tajudeen Adeshina, Mr. Peter Okoh, and Mr. John Ogundipe.
It will be recalled that the FRCN had sanctioned Stanbic IBTC Holdings in relation to the company’s financial statements for the year ended December 31, 2013, and 2014.
FRCN through a letter signed by Obazee, sanctioned Stanbic IBTC Holdings Plc, over its audited accounts for 2013 and 2014, and also suspended the Financial Reporting Numbers of the bank’s chairman, Mr. Atedo Peterside, and its chief executive, Mrs. Sola David-Borha, and also barred them forthwith from vouching for the integrity of any financial statements in Nigeria.
The FRCN also suspended two other directors, namely; Mr. Arthur Oginga and Dr. Daru Owei, for attesting to what it termed the “misleading” 2013 and 2014 financial accounts of Stanbic IBTC, as well as Ayodele Othihiwa of KPMG Professional Services for his firm’s alleged complicity in the infractions highlighted in the financial reports for the two-year period.
Furthermore, FRCN slammed a fine of N1 billion on Stanbic IBTC, for alleged contravention of the regulations.
The applicants had in February filed an Originating Summons before the court seeking the court to determine whether the Minister of Industry, Trade, and Investment can, in the exercise of the powers conferred on him by Section 73 of the FRCN Act, 2011 make regulations, proceed to “create new offences and impose sanctions and or penalties and or otherwise expand the scope of the principal Act itself, or lay down entirely new regulations which are not ancillary to the provisions of the Act”.
The shareholders also wanted the court to determine “whether regulations published as Government Notice Number 94 of October 6, 2014, particularly, the provisions of Rules 10, 16, 17, 18, and 24 to the extent that those provisions set out new offences and sanctions other than those contained in the principal Act, are not ultra vires the first defendant (Minister) having regard to the provisions of section 73 of the Act under which the first defendant purportedly acted to issue and or make the regulations”.
When the suit came up for hearing on Thursday, the lawyer to the defendants, Akpudugu informed the court that he had just been briefed on the case and he would require a short adjournment to file his response.
Though the plaintiffs’ counsel, Kemi Pinheiro (SAN), agreed to the adjournment, he, however, urged the court to make a temporary order suspending all the decisions made by FRCN during the pending of the case.
According to Pinheiro, the court must give the order because the decisions of the 2nd defendant, FRCN, are seriously affecting his clients, who are shareholders of Stanbic IBTC Bank.
The lawyer also submitted that the action of the 2nd defendant was taken in disregard to the authority of the court and the court must not allow them to get always with it.
But opposed the motion, Akpudugu stated that the court must hear them first before making any order on the issue in the interest of justice and fair hearing.
In a short ruling, Justice Abang agreed with the defendants, saying that the court can not shut out the defendants, and insisted that they must be allow to file their processes before the court can hear the application.
The judge subsequently adjourned the matter till November 20, 2015 for hearing of the Plaintiffs’ application for injunction.