By Modupe Gbadeyanka
Yesterday, a Federal High Court in Lagos threw out a suit filed by Oando Plc against the Securities and Exchange Commission (SEC), seeking to stop a forensic audit on its affairs.
Oando had got into trouble after Dahiru Manga and Ansbury Inc petitioned SEC, alleging gross financial misconducts against the energy firm.
After its comprehensive review of the petitions against Oando Plc, SEC found out that the company breached provisions of the Investments & Securities Act 2007, breached of the SEC Code of Corporate Governance for Public Companies, had insider dealing, discovered that related party transactions were not conducted at arm’s length; and there were discrepancies in the shareholding structure of Oando Plc, amongst others.
Consequently, the capital market regulator directed the Nigerian Stock Exchange (NSE) to suspend trading of shares of Oando Plc on its platform.
This action was followed by the suspension of the firm’s shares on the Johannesburg Stock Exchange (JSE).
Later, SEC announced appointing independent auditors led by Nigeria’s oldest indigenous accounting firm, Akintola Williams Deloitte, to conduct a forensic audit on Oando Plc.
But this was vehemently kicked against by the oil company, which approached a Federal High Court in Lagos to stop this action.
On Thursday, November 23, 2017, the matter was heard and the court ruled that it had no jurisdiction to entertain the case.
According to the trial judge, Justice Mohammed Aikawa, it would be wrong for his court to hear the matter because matters relating to the capital market disputes should be entertained by the Investment and Securities Tribunal (IST) and not the regular courts.
It is important to note that counsel to SEC, Mr George Uwechue (SAN), filed a preliminary objection, seeking the court to strike out the suit for lack of jurisdiction.
In his judgement, Justice Aikawa held that, “I hold that the subject matter of this issue falls within the exclusive jurisdiction of the Investment and Securities Tribunal (IST) and not this court.
“In addressing this issue, I find the provisions of the Investment and Securities Act 2007 quite instructive.
“Section 284 of the ISA (2007) says the tribunal shall, to the exclusion of any other court of law or body in Nigeria, exercise jurisdiction to hear and determine any question of law or dispute involving -(a) a decision or determination of the Commission in the operation and application of this Act, and in particular, relating to any dispute – (i) between capital market operators; (ii) between capital market operators and their clients; (iii) between an investor and a securities exchange or capital trade point or clearing and settlement agency; (iv) between capital market operators and self-regulatory organisation; (b) the Commission and self-regulatory organisation; (c) a capital market operator and the Commission; (d) an investor and the Commission; (e) an issuer of securities and the Commission; and jurisdiction of the tribunal and so on and (f) disputes arising from the administration, management and operation of collective investment schemes.
“It is not in dispute that the matter before me is a dispute between capital market operators,” he declared in his ruling.”
The judge further said, “On this premise, I have no option than to uphold the preliminary objection. I also in the same vein uphold the preliminary objection of the second defendant (Nigerian Stock Exchange).
“This court lacks the jurisdiction to adjudicate the dispute between both parties.
“The proper place for this matter to go is IST. I, therefore, strike out this matter.”
