Change of counsel stalls contempt action against FRCN boss

 Chief Executive Officer of FRCN, Mr Jim Obazee

Chief Executive Officer of FRCN, Mr Jim Obazee

The change of lawyer by Financial Reporting Council of Nigeria (FRCN) stalled further trial before a Federal High Court, Lagos, a suit filed by the Shareholders Association of Nigeria (SAN).

The shareholders are seeking to bring the Chief Executive Officer of FRCN, Mr Jim Obazee before the court to show cause why he should not be committed for contempt for implementing regulations that are subject of litigation before the court.

Justice Okon Abang had on October 30 adjourned trial till November 5, 2015 to allow the application filed by the plaintiff’s counsel, Kemi Pinheiro SAN, to be filed properly before the court, and for the defence counsel, Dr Fabian Ajogwu SAN, to respond before the court could reach a decision.

But when the matter came up today, it was another lawyer, Emmanuel Akpudugu from Bola Ajibola chambers that represented FRCN, confirming speculations that Mr Ajogwu have withdrawn his services from the defendants.

When the matter came up, Akpudugu told the court that his chambers have just been briefed about the matter two days ago. He therefore urged the court to grant him a short adjournment to enable him study the matter properly.

Pinheiro addressing the court said he sympathize with the defence counsel but that the justice of the matter demands that the court orders a temporary suspension of the directive of the defendant dated October 26, 2015, suspending the chairman and some directors of Stanbic IBTC Holdings.

He said that while the lawyer is seeking for an adjournment, the defendants still continue to implement the regulations which forms the cause of action before the court.

However, Akpudugu pleaded that he was ready to give an undertaking that the defendants will not do anything on the directive pending the argument of the motion before the court.

Justice Abang in his ruling said that he would not want to give his ruling on the motion piecemeal and that he would prefer that parties in the case argue their motions and the court gives its ruling once and for all. He thereafter adjourned the matter till November 20, 2015.

On February 27, 2015, 10 members of the SAN led by the chairman, Chief Timothy Adesiyan, had 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 it by Section 73 of the FRN Act, 2011 make regulations, proceed to “create new offences and impose sanctions.

They also want the court to say if the defendant has the powers to 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 prayed the court to determine “whether regulations published as government notice No 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”.

Apart from Adesiyan, other plaintiffs are Mr Sulaiman Adenrele, Prince Sunday Ogunnowo, Mr Frederick Oduyemi, Chief Robert Igwe, amd Mr Bello Owonikoko. Others are Mr Lazarus Onwuka, Mr Tajudeen Adeshina, Mr Peter Okoh, and Mr John Ogundipe.

The Defendants are the Honourable Minister of Trade and investment, the FRCN, the Attorney General of the Federation, and the Steering Committee on the National Code of Corporate Governance. The defendants had entered appearance before the court through their counsel, Dr. Ajogwu on April 24, 2015. After filing appearance, the matter came up before the court on June 18, 2015 and Justice Abang subsequently adjourned the suit till October 30, 2015.

However, prior to the adjourned date, the FRCN went ahead with the implementation of the regulations under contention before the court. It sanctioned Stanbic IBTC Holdings in relation to the company’s financial statements for the years ended December 31, 2013, and 2014.

Through a letter that was signed by the Executive Secretary/Chief Executive Officer of FRCN, Mr. Jim Osayande Obazee, the FRCN sanctioned Stanbic IBTC over its audited accounts for 2013 and 2014 and 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, 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 fined Stanbic IBTC a sum of N1billion for alleged contravention of the regulations.

When the suit came up for mention on October 30, 2015, the lawyer to the plaintiffs, Pinheiro told Justice Abang that the act of the defendants is in “utter disregard for the powers of the court in relation to the eventual determination of the suit”.
He argued that some of the plaintiffs are shareholders of Stanbic IBTC Holdings. He, therefore, urged the court to restrain the defendants from further implementing the regulations.

The Defendants’ Counsel urged the Court to dismiss the Plaintiffs’ application on the ground that Stanbic IBTC is a separate and distinct entity that had the right to seek redress for any purported act committed against it.
Thereafter, the Court adjourned the suit to 5 November 2015 for hearing of the Plaintiffs’ application for injunction.

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