Tribunal overrules FCMB in N2.5 billion debt
by HARRISON EDEH, ABUJA
May 24, 2018 | 12:30 am| | | Start Conversation
The Investments and Securities Tribunal (IST) sitting in Abuja has finally resolved a decade-long cyclical dispute between a stock broking firm, Valueline Securities and Investments Ltd and First City
Monument Bank Plc (FCMB) over repayment of N2.5 Billion shares
The Fund ITS confirmed in a statement issued on Tuesday was misappropriated in 2008 by the defunct FinBank Plc with which FCMB Consummated a merger.
The matter had been handled by the Securities and Exchange Commission, SEC, the Central Bank of Nigeria, CBN, and Assets Management Company of Nigeria, AMCON and the Federal High Courts over the decade.
Giving judgment in the case filed by Valueline Securities and Investments Ltd as Claimant against Securities and Exchange Commission [SEC], Central Bank of Nigeria [CBN] and First City Monument Bank Plc as 1st, 2nd, and 3rd Defendants, the Tribunal found FCMB liable to pay the Claimant an outstanding debt of N988,533,205.86 plus further accrued interest calculated at 18 percnt in the manner earlier directed by SEC pursuant to her statutory powers listed in Section 96 of the Investments and Securities Act [ISA] 2007.
The FCMB Plc is also to pay a penalty of N500, 000.00 to the Claimant as cost of the legal action and a further 10 percent interest on the judgment debt from the date of the judgment until final defrayment.
The Chairman of the Tribunal, Siaka Isaiah Idoko-Akoh, who delivered the judgment explained that the Claimant’s case was that in 2008, it applied for and deposited N2.5 billion to buy shares in the
FINBANK Public Offer but at the end was neither allotted the shares nor was his money returned to him as required by capital market regulations.
According to its pleadings and testimonies, Idoko-Akoh said the Claimant petitioned the SEC after failing to get its refund. The SEC in line with its regulatory functions investigated the complaint, found FINBANK culpable and ordered it to pay back the N2.5 billion with 18 percent interest per annum from September 23, 2008 until full liquidation.
However, when the Bank failed to pay, the SEC sought the intervention of the CBN; coincidentally, at the time when the FCMB and FINBANK were planning a merger.
An All Parties Meeting [APM] was convened where the FCMB undertook to repay the indebtedness of FINBank and for its account with the CBN to be debited at source by CBN provided the merger of the two banks was approved by SEC to succeed.
But on the other hand, FCMB Plc in its defence said it paid back the sum of N4.6 Billion made up of the principal N2.5Billion and N2.1Billion accrued interest and believes it had liquidated the debt.
The Claimant however disputed the claim that FCMB fully repaid the debt especially as, according to its pleadings, the CBN and SEC had set up another joint investigative team that met and changed the original SEC computation formula for the repayment following a petition by FCMB Plc and without informing or involving the Claimant.
Out of the contending breadth of issues put forward by the parties, the six-man panel of the Tribunal adopted three issues for determination namely; whether FCMB had fully complied with the directive to pay the debt, whether FCMB was still indebted to the
Claimant and whether the Claimant is entitled to the reliefs it sought in its Originating Application. Other Members of the Tribunal that heard the case were – Jude I. Udunni, Mamman Bukar Zargana, Edward O.
Ajayi, Emeka C. Madubuike and Albert L. Otesile.
On the first issue, the Tribunal ruled in favour of the Claimant stating that the FCMB Plc from verifiable computation figures still owes the Claimant an outstanding unpaid balance of the sum of N988,553,205.86 kobo and that interest continues on the sum until fully paid.
Accordingly, the Tribunal expressed the firm view that the payment of the disputed debt has not been fully complied with. On other declarative reliefs and orders sought by the Claimant, the Tribunal said the Claimant had proved its entitlement and consequently granted most of them.
HARRISON EDEH, ABUJA
Big Read |