The Securities and Exchange Commission and Oando Plc yesterday engaged in legal cross fire at the Federal High Court in Lagos over the technical suspension imposed on the shares of the company on the floor of the Nigerian stock market
Oando had earlier approached the court to challenge SEC’s suspension of its shares and an audit of its business activities by forensic experts hired by SEC.
Before now Justice Rilwan Aikawa of the lower court had granted an interim injunction restraining SEC from carrying out the audit. However, the same judge, in a ruling on November 23, 2017, struck out Oando’s suit, saying he had no jurisdiction to entertain it.
The judge was of the opinion that it is only the Investment and Securities Tribunal that can preside over the matter.
Displeased with the decision, Oando, through its lawyer, Mr. Seyi Sowemimo (SAN), went before the Court of Appeal, seeking the reversal of Justice Aikawa’s ruling.
The lawyer maintained that the Federal High Court rather than the IST was the appropriate forum to hear the case, adding that the judge erred in law to decline jurisdiction because “the suit touched and concerned the operation of a company incorporated under the Companies and Allied Matters Act.”
According to him, by virtue of Section 251(i)(e) of the Constitution, the Federal High Court is empowered to entertain CAMA-related cases.
He is, therefore, urging the Court of Appeal to make an order “reversing the (Justice Aikawa’s) order striking out the suit and restoring the matter to the cause list of the Federal High Court for accelerated hearing.”
At the Monday’s proceedings before Justice Aikawa, Sowemimo informed the judge about the appeal and urged the judge to make an order “preserving the res to prevent the appeal from being rendered nugatory.”
But counsel for SEC and the Nigerian Stock Exchange, which was joined as the second defendant, Chief Anthony Idigbe (SAN), opposed Sowemimo’s application for the preservation of res.
Idigbe argued that the issues canvassed by Oando in its appeal “are not substantial in law.”
He insisted that it was in the best interest of investors, shareholders and members of the general public that SEC placed Oando’s shares under technical suspension.
He said the technical suspension was to prevent panic and dumping of Oando’s shares by investors and members of the public.
Idigbe added that the technical suspension was temporary and was imposed to allow for an independent forensic audit of Oando’s business activities.
He said there was no point for Justice Aikawa to make an order preserving the res because “the suspension of the trading of the plaintiff’s shares in the Nigerian Stock Exchange has already been completed.”
“The forensic examination of the plaintiff’s business activities has already commenced and the parties are waiting for the report of the said investigation.
“The temporary suspension of trading of the shares is not a punitive action against the plaintiff but a device to protect the shares of the plaintiff from further decline because of the investigation.
“The undertaking of the forensic examination of the plaintiff by independent experts will not prevent a return to status quo if the appeal succeeds,” Idigbe added.
Sowemimo prayed for time to file a reply to Idigbe’s counter-affidavit.
Justice Aikawa adjourned further proceedings in the case till Wednesday, December 13.