Justice Ibrahim Buba of a Federal High Court in Lagos has restrained the Financial Reporting Council of Nigeria (FRCN) from interfering in the operations of Stanbic IBTC Holdings Plc pending the final determination of a suit against the agency by Stanbic IBTC Holdings.
In a ruling on the motion for interlocutory injunction filed by Stanbic IBTC Holdings, the judge also barred FRCN from inviting the company's entire Board of Directors to any meeting in connection with any statutory investigation of its financial statements until the final determination of the pending suit.
Justice Buba, however, refused the third leg of the reliefs sought by Stanbic IBTC Holdings for the court to restrain FRCN from taking further steps to enforce an invitation it sent to Stanbic IBTC on 16 October 2015 to attend a meeting.
Stanbic IBTC Holdings had instituted a suit against FRCN and the National Office for Technology Acquisition and Promotion (NOTAP) challenging the sanctions imposed on it by FRCN over allegations of material misstatements in its financial accounts for the 2013 and 2014 financial years, which led to a N1 billion fine, among other sanctions. At the proceedings, the judge equally granted an application by Stanbic IBTC Holdings to amend its originating summons, after dismissing the objections of FRCN's lawyer, Olusina Sofola (SAN), to the application. Sofola had argued that the application for amendment is akin to putting something on a dead issue.
According to him, "The issue complained about in the originating summons by the plaintiff is the legality of the meeting called by the defendant. The meeting was called and they said they will not attend and as far as we are concerned, the issue is dead since the day has come and gone. The amendment is to revive what is already dead. The court should not allow it." Sofola added that if the plaintiff has any fresh grievances, it should file a fresh suit. He then urged the court to reject the request for an amendment.
However, Stanbic IBTC's lawyer, Prof. Fidelis Odita (SAN), while urging the court to allow the amendment, disclosed that the powers of the court to grant the request can be exercised at anytime as long as judgment has not been delivered in the suit. The matter has been adjourned till Friday, 6 November 2015, for the hearing of the motion for joinder by an interested party.
In the main suit, the financial institution is asking the court to determine whether FRCN has the power to impose a fine of N1 billion on it. The FRCN sanctions were based on issues raised by the bank’s minority shareholders led by the Mahtani brothers who own the Churchgate conglomerate.
Stanbic IBTC Holdings also wants the court to determine whether or not FRCN has the power to licence directors and other office holders of public interest entities and if the government agency has the power to suspend the said licence by suspending a director or other office holders of a public interest entity. Other determinations sought are for the court to determine if the Council has the power to bar any director or other office holder from signing the entity’s financial statements without informing the affected director or other office holder what he/she has done wrong and giving him/her the opportunity to show cause why disciplinary action should not be taken against him?
It further asked the court to answer the question whether "the true construction of the National Office for Technology Acquisition and Promotion Act 1979 is non-registration of an agreement registrable under the NOTAP Act a criminal offence?"
Other reliefs sought by the bank include: “A declaration that failure to register a registrable agreement under the NOTAP Act is not a criminal offence.”
“A declaration that failure to register a registrable agreement under the NOTAP Act does not render the agreement illegal and unenforceable or render the agreement null and void.”
“A declaration that the effect of non-registration of a registrable agreement under the NOTAP Act is as stated in section 7 of the NOTAP Act, namely to prevent payment or remittance of money to any person outside Nigeria in respect of the unregistered agreement.”
“A declaration that the first defendant has no power to dictate to a public interest entity the types of commercial agreements that it may enter into in the conduct of its business.”
“A declaration that the first defendant has no power to licence directors or other office holders of a public interest entity who may sign financial statements of such entities, for example by giving the directors or other office holders FRC numbers and insisting that the FRC numbers must be quoted on all financial statements signed by them.”
“A declaration that Regulation 18 of the Inspection and Monitoring Regulations is invalid, null and void.”