Commercial Law

Court dismisses IGI’s suit against EFCC, others over shares fraud

A N52 million fundamental human rights enforcement suit filed by Industry and General Insurance Plc (IGI) against the Economic and Financial Crimes Commission (EFCC), two of its officials and four others has been dismissed, by a Lagos Federal High Court.

Justice Tijjani Ringim dismissed the suit sequel to a preliminary objection filed and argued by counsel to EFCC, Okezie Chinenye for being incompetent, frivolous and aimed to mislead the court.

The insurance giant, IGI had approached the court in a suit marked FHC/L/CS//2021, wherein it sought several declaratively injunctions and orders against the anti graft agency and others.

Those joined as defendants alongside EFCC are: Ahmed Ghali, EFCC Lagos Zonal Head; Ronke Idayat Sulaiman, EFCC’s Team B Lead, Capital Market and Insurance Fraud Unit; Osom Property Limited; Royal Descent Limited;  Frososom Nigeria Limited; Ilekhuoba Osaretin and Fendo Constructions Limited, as first to eight respondents.

In the suit, IGI had asked the court to declare that the first, second and third defendants lack the powers to question a pure civil and commercial transaction between it and fourth, fifth, sixth, seventh and eighth defendants, to with its Private Placement of its shares for the fourth, fifth, sixth, seventh and eighth defendants, in 2007, and and that the fourth, fifth, sixth, seventh and eighth defendants’ acceptance  of the offer and subsequent allotment of the shares to the fourth, fifth, sixth, seventh and eighth defendants, by the Plaintiff.

It also asked the court for a declaration that the first, second and third defendants cannot purport to be acting as a mediator and/or recovery agents for the fourth, fifth, sixth, seventh and eighth defendants, for a purely civil and commercial transaction between it and fourth, fifth, sixth, seventh and eighth defendants, in respect of the Plaintiff’s Private Placement of its shares for the  fourth, fifth, sixth, seventh and eighth defendants, in 2007, and that the fourth, fifth, sixth, seventh and eighth defendants, acceptance  of the offer and subsequent allotment of the shares to the fourth, fifth, sixth, seventh and eighth defendants by it.

IGI further asked for a declaration that the continued invitation of the it’s officials and employees of the first, second, and third defendants or any other officers of the first defendant, acting on the behest of the fourth, fifth, sixth, seventh and eighth defendants, in connection with the purported of it’s Private Placement of offer of it shares to the fourth, fifth, sixth, seventh and eighth defendants in 2007, and that the fourth, fifth, sixth, seventh and eighth defendants’ acceptance of the offer and subsequent allotment of the shares to the fourth, fifth, sixth, seventh and eighth defendants, is beyond the powers granted to first, second and third defendants under the EFCC Act, and consequently, ultra vires, null and void, as same constitutes harassment and it is egregious breach of the Plaintiff’s rights as enshrined in Constitution of the Federal Republic of Nigeria 1999 (as amended)

The insurance giant also asked for a declaration that the continued invitation of the Plaintiff’s officials and employees of the first, second, and third defendants or any other officers of the first defendant, acting on the behest of the fourth, fifth, sixth, seventh and eighth defendants, in connection with the purported of it’s Private Placement of offer of it shares to the fourth, fifth, sixth, seventh and eighth defendants, in 2007, and that the fourth, fifth, sixth, seventh and eighth defendants, acceptance of the offer and subsequent allotment of the shares to the fourth, fifth, sixth, seventh and eighth defendants, by the Plaintiff constitutes harassment and it is egregious breach of it’s rights as enshrined in Constitution of the Federal Republic of Nigeria 1999 (as amended)

An order of perpetual injunction restraining the first, second and third respondents and other officers of the first defendant, acting at the behest of the fourth, fifth, sixth, seventh and eighth defendants, from further harassing, inviting, summoning and demanding from it or any of it’s directors and employees, documents, assets, monies and any information relating to it’s Private Placement offer of its shares to the fourth, fifth, sixth, seventh and eighth defendants in 2007; and fourth, fifth, sixth, seventh and eighth defendants’ acceptance of the offer and the subsequent allotment of shares to the fourth, fifth, sixth, seventh and eighth defendants by it.

It also asked for an order awarding the cost of N50 million and N2 million as damages for the breach of it’s rights and cost of instituting the suit against the defendants jointly and severally.

However, all the respondents in their various counter-affidavits urged the court to dismiss IGI’s suit, for being frivolous, incompetent, premature and aimed to intimidate the first to third defendants from continuing an investigation Into the exact whereabout of the funds paid by the fourth to eighth defendants in the custody of the applicant.

EFCC in its affidavit deposed to by one of its operatives, Izuchukwu Collins, and filed and argued by it’s lawyer, Rotimi Iseoluwa Oyedepo, averred that all the deposition contained in the applicant’s affidavit are completely false and misleading.

The deponent stated that his employee received a petition dated June 17, 2020, against the applicant on the allegations of public fraud and that the petition alleged  that in 2006, the applicant made request for Private Placement of the fund and issued a public prospectus to that effect to private individuals and corporate bodies to subscribe. The conditions for the placement was that shares bought would be listed on the floor of the Nigerian Stock Exchange not later than 12 months after the offer, that is by 2007.

Izuchukwu stated that the fourth to eighth respondents follow this representation and purchased the shares at the rate offered. Shares certificate were subsequently issued Covering the total sum of N141,150 million. He added that despite the express conditions and promise offered to list the shares on the floor of the Stock Exchange the Applicant failed to do that.

He further averred that since 2006 after the purchase of the shares by the fourth to eighth respondents, the plaintiff only paid dividends on the private placement for the year 2007, 2008 and 2009. Dividends were not paid for the subsequent years after that thereby failing to meet up with the assurance given to the public. And that rather than fulfill all that’s expected or required, investigation revealed that the it has engaged in the business of purchasing several properties around country, thereby using the funds of several subscribers to purchase, those properties.

The deponent stated further that the applicant did not make any case against the first to third respondents, adding that the applicant’s suit is intended to shield it from further investigation. And that it is in the interest of justice to dismiss the applicant’s claim against the first to third respondents.

In the same vain, Mr. Fredrick Ilekhuba, the Alta ego for the fourth and sixth defendants, also urged the court to discountenance the deposition of the applicant as contained in the Affidavit in support of the Motion on Notice dated July 22, 2021, as they were untrue, none factual and merely intended to mislead this Honourable Court.

Ilekhuba averred that the fourth to eight defendants on the strength of the Public offer and publication, the applicant’s proceeded to purchase shares in the following Sum: (1) Osom Properties Limited 20,000, 000 ordinary shares at N40 million; Royal Descent Limited, 20,000 000 ordinary shares N40 million; Frososom Nigeria Limited 20 000 000 ordinary shares at N40 million; ilekhuoba Osaretin 575 ordinary shares at N1.150 million; Fando Construction Limited, 10,000,000 ordinary shares at N20 million.

The deponent stated that the defendants had to make formal protests and wrote protest letters to a few oversight agencies like the National Assembly. He stated that the fears of the defendants was confirmed when information reached them that the applicant has been Involved In the acquisition of properties and sales of same for profit rather than list the subscribed shares.

The deponent stated further that In a bizarre turn of events, an agent from the applicant came to the offices of the fourth defendant with the sole purpose to offer for Purchase two parcels of land belonging to the Plaintiff/Applicant located at Mayegun Tourism Scheme (Theme Park) Lekki, Lagos, Lagos State measurng 4.2 hectares for the sum of N1.3 billion but valued at N2.8 billion, the second measuring 13 067 hectares of land at Mayegun Tourism Scheme (Theme Park) Lekki, Lagos, Lagos State, dated 15/6 2020 for the purchase of the parcels of land.  Based on this development and discovery that assets and properties purchased by the applicant with funds collected from our clients were being surreptitiously sold, we had to instruct our lawyers Messrs Tony Odiadi & Co to file a petition to the offices of the Lagos Office of the EFCC on June 27, 2020″.

He stated that as a procedure, the first to third defendants invited him on August 3, 2020, and made a formal statement “which I did in addition to the defendants’ petition made through their lawyers”. He said that best of his knowledge, nobody had been arrested or detained even as investigations are continuing on the use of funds to buy properties and not listing of the purchased shares

He averred that he of strong believe that this action instituted by the applicant is also intended to frustrate the fourth to eighth defendants.

Delivering judgment in the suit, Justice Ringim after perusing all the processes filed before him backed with plethoras of superior legal authorities, dismissed IGI’s suit against all the defendants, for being frivolous and incompetent.

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