Akin Kuponiyi

StanbicIBTC branch in Lafia

A  Federal High Court, sitting in Lagos has restrained the Financial Reporting Council of Nigeria, (FRCN), its agent, from obstructing the operations of Stanbic IBTC Holdings Plc. ‬

The  presiding Judge  Ibrahim Buba granted an order of injunction restraining the agency from interfering with, or otherwise impeding, obstructing, molesting or hindering” the plaintiffs’ operations. ‬

The court also restrained the FRCN from inviting the board of directors of Stanbic IBTC Holdings to any meeting in connection with the defendant’s statutory investigation of the plaintiff’s statements. ‬

‪The orders, according to the judge, will be in force until the hearing and determination of the proceedings.”

Justice Buba ruled on an motion on notice for orders of injunction against FRCN and the National Office for Technology Acquisition and Promotion (NOTAP). ‬

Mrs Sola David-Borha, MD of Stanbic IBTC

‪The plaintiff said FRCN, since August 3, has been investigating its audited accounts for the year ended December 2014. The investigations concern liabilities accrued in the plaintiff’s 2014 accounts in respect of franchise fees owed to Standard Bank of South Africa, the registration of which it said has been pending before NOTAP since 2011. ‬

The plaintiff informed the  court that FRCN labelled the franchise agreement as illegal, and invited IBTC Holdings’ Chief Executive Officers to appear before it. It added that following a meeting on October 16, the council informed the plaintiff 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 Securies and Exechage Commission (SEC). ‬

FRCN then ordered the entire Stanbic IBTC board to meet with the council “to know the extent of its board involvement” in the matter.

The plaintiff contended that the council has no statutory or other powers to summon the plaintiff’s entire board of directors to a meeting in order to determine their complicity or otherwise in any alleged criminal offence. ‬

Arguing the plaintiff’s application  Prof Fidelis Oditah (SAN) said FRCN has been acting beyond its powers. ‬  Odita informed the court that SEC issued a public notice suspending his clients’ N18 billion right issue that the commission had previously approved, citing a letter received from FRCN. ‬

According to him; “On September 15, SEC put on hold the plaintiff’s application to pay scrip dividends out of its 2014 profits, citing a letter received from FRCN.”‬

According to him, the council “is not a prosecutor or a court,” adding that it engaged in a campaign of calumny against the plaintiff. ‬

Consequently, Oditah said, that Stanbic IBTC’s share price fell from N23 to less than N19 within a week. ‬

In his response, FRCN’s lawyer, Chief Olusina Sofola, SAN, urged the court not to grant the application because the invitation had been overtaken by events.

In‪ his ruling, Justice Buba held that the application has merit therefore there  is a strong case for the maintenance of status quo. ‬

The judge said since  FRCN is aware of the suit, therefore, the best thing was for all parties not to take steps that could “undermine” the case in court. therefore the application is granted

In its suit, the plaintiff is asking the court to determine among others whether FRCN has the power to impose a fine of N1 billion on it.

FRCN had last week sanctioned Stanbic IBTC over its audited accounts for 2013 and 2014. ‬

It suspended the Financial Reporting Numbers of the bank’s chairman, Mr. Atedo Peterside, and its chief executive, Mrs. Sola David-Borha.

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 the bank, 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.

‪It 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.‬

‪The bank also wants the court to determine whether or not the FRCN has the power to license directors and other office holders of public interest entities and if it can suspend the said licence by suspending a director or other office holder of a public interest entity.‬

Justice Buba has adjourned till Friday for hearing of a motion to join a shareholder to the suit.‬

*The author, Akin Kuponiyi can be reached @:
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