Justice Ibrahim Nasir Buba of a Lagos Federal High Court, has dismissed a suit filed by Stanbic IBTC Plc against the Financial Reporting Council of Nigeria, FRCN, which was challenging the sanction placed on it and one billion naira imposed on it by the FRCN.
Stanbic IBTC Plc has instituted the suit against FRCN seeking to know if the regulatory body has the power to determined it's failure to register with National Office for Technology Acquisition and Promotion, NAOTAP, is a criminal offence.
Stanbic IBTC Plc in its originating summons before the court, also asked the court to determine among others whether FRC has the power to impose a fine of N1 billion on it.
It also sought a declaration that the effect of non-registration of an 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. And also sought a declaration that FRC 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.
FRC had sanctioned Stanbic IBTC over its audited accounts for 2013 and 2014, and also suspended the bank’s chairman, Mr. Atedo Peterside, and its Chief Executive, Mrs. Sola David-Borha, and also barred them from vouching for the integrity of any financial statements in Nigeria.
However, before Justice Buba dismissed the Stanbic IBTC Plc's suit, he had dismissed all objections filed by FRCN and other respondents in suit.
Stanbic IBTC Holdings Plc said FRC, since August 3, had been investigating its audited accounts for the year ended December 2014. Adding that the investigations concern liabilities accrued in its 2014 accounts in respect of franchise fees owed to Standard Bank of South Africa, the registration of which it said has been pending before the National Office for Technology Acquisition and Promotion (NOTAP) since 2011.
The plaintiff said FRC labelled the franchise agreement as illegal, and invited IBTC Holdings' Chief Executive Officers to appear before it. And that following a meeting on October 16, the Council informed the it that it committed criminal offences and that it would be reported to the the Economic and Financial Crimes Commission (EFCC), the Central Bank of Nigeria (CBN) and the Securities and Exchange Commission (SEC).
FRC then asked the entire Stanbic IBTC Board to meet with the council to know the extent of the board involvement in the matter.
Stanbic IBTC sued, praying the court to determine whether FRC acted beyond its powers.
It also sought a declaration that failure to register a “registrable” agreement under the NOTAP Act is not a criminal offence.
Arguing FRC’s objections before the court, its lawyer Olusina Sofola, SAN, said IBTC did not comply with Section 66 (3) of the FRC Act which states that anyone dissatisfied with any decision should appeal to its Technical Committee. And urged the court to strike out the Stanbic IBTC's suit.
Sofola, SAN, had also informed the court that Stanbic IBTC was seeking to review FRC’s decisions, therefore they should have brought an application for a judicial review, which renders the plaintiff’s originating summons incompetent. Adding that the bank should have sued the Minister of Trade, who made the regulations on the basis of which sanctions were imposed on the plaintiff, not FRC who merely implemented them.
But Stanbic IBTC’s lawyer, Prof Fidelis Oditah (SAN) said the plaintiff did not need to join the Minister.
“We don’t accept that the minister should be joined. The presence of the minister is not required to determine the questions of law raised. We urge the court to dismiss the objection for being a storm in a tea cup,” he said.
According to him, the objections were “all hopeless” and should be dismissed.
FRCN had based its sanctions on issues raised by the bank’s minority shareholders led by the Mahtani brothers, who own the Churchgate conglomerate, to some other regulatory agencies such as NOTAP, SEC and CBN, among others.
Stanbic IBTC Plc has instituted the suit against FRCN seeking to know if the regulatory body has the power to determined it's failure to register with National Office for Technology Acquisition and Promotion, NAOTAP, is a criminal offence.
Stanbic IBTC Plc in its originating summons before the court, also asked the court to determine among others whether FRC has the power to impose a fine of N1 billion on it.
It also sought a declaration that the effect of non-registration of an 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. And also sought a declaration that FRC 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.
FRC had sanctioned Stanbic IBTC over its audited accounts for 2013 and 2014, and also suspended the bank’s chairman, Mr. Atedo Peterside, and its Chief Executive, Mrs. Sola David-Borha, and also barred them from vouching for the integrity of any financial statements in Nigeria.
However, before Justice Buba dismissed the Stanbic IBTC Plc's suit, he had dismissed all objections filed by FRCN and other respondents in suit.
Stanbic IBTC Holdings Plc said FRC, since August 3, had been investigating its audited accounts for the year ended December 2014. Adding that the investigations concern liabilities accrued in its 2014 accounts in respect of franchise fees owed to Standard Bank of South Africa, the registration of which it said has been pending before the National Office for Technology Acquisition and Promotion (NOTAP) since 2011.
The plaintiff said FRC labelled the franchise agreement as illegal, and invited IBTC Holdings' Chief Executive Officers to appear before it. And that following a meeting on October 16, the Council informed the it that it committed criminal offences and that it would be reported to the the Economic and Financial Crimes Commission (EFCC), the Central Bank of Nigeria (CBN) and the Securities and Exchange Commission (SEC).
FRC then asked the entire Stanbic IBTC Board to meet with the council to know the extent of the board involvement in the matter.
Stanbic IBTC sued, praying the court to determine whether FRC acted beyond its powers.
It also sought a declaration that failure to register a “registrable” agreement under the NOTAP Act is not a criminal offence.
Arguing FRC’s objections before the court, its lawyer Olusina Sofola, SAN, said IBTC did not comply with Section 66 (3) of the FRC Act which states that anyone dissatisfied with any decision should appeal to its Technical Committee. And urged the court to strike out the Stanbic IBTC's suit.
Sofola, SAN, had also informed the court that Stanbic IBTC was seeking to review FRC’s decisions, therefore they should have brought an application for a judicial review, which renders the plaintiff’s originating summons incompetent. Adding that the bank should have sued the Minister of Trade, who made the regulations on the basis of which sanctions were imposed on the plaintiff, not FRC who merely implemented them.
But Stanbic IBTC’s lawyer, Prof Fidelis Oditah (SAN) said the plaintiff did not need to join the Minister.
“We don’t accept that the minister should be joined. The presence of the minister is not required to determine the questions of law raised. We urge the court to dismiss the objection for being a storm in a tea cup,” he said.
According to him, the objections were “all hopeless” and should be dismissed.
FRCN had based its sanctions on issues raised by the bank’s minority shareholders led by the Mahtani brothers, who own the Churchgate conglomerate, to some other regulatory agencies such as NOTAP, SEC and CBN, among others.
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