Court Okays sale of FinBank to FCMB
A FEDERAL High Court in Lagos, on Friday, has approved the plannedsale of FinBank Nigeria Plc to First City Monument Bank (FCMB).
This followed the dismissal of the suit filed by the former Managing Director and Chief Executive Officer of Finbank, Okey Nwosu, challenging the ownership switch agenda.
In a ruling on the preliminary objection filed by Nwosu against the Central Bank of Nigeria (CBN), the trial judge, Justice Okechukwu Okeke, held that the suit was an abuse of court process because there was a similar suit initiated by some shareholders of Finbank against the CBN, which is pending before Justice Okon Abang.
In that other suit, Justice Abang was said to have dismissed the case, while the shareholders had already filed an appeal against the ruling. Nwosu was also said to have filed a motion before the Court of Appeal to be joined in the suit.
Justice Okeke also held that the suit was statute barred, because the CBN governor, being a public officer, is protected by the Public Officers Act, and that any action to challenge his action must be brought not later than three months after such action.
The judge arrived at the conclusion because Nwosu and Famoroti had also challenged their removal by the CBN on August 14, 2009.
Reacting to the ruling, CBN’s spokesperson, Mohammed Abdullahi stated that it was an affirmation of the apex bank’s stance on the entire process of recapitalisation of the bank, adding that the judgment has also confirmed the fact that CBN had always complied with the law in all decisions.
“It is the hope of CBN that the shareholders will understand this and allow the process to move
Forward without further delay. They should realise that all these court cases are doing damage to the process which may negatively affect the desire of CBN to salvage some value for them,” the statement added.
Nwosu and Famoroti had filed the suit to challenge the legality of a Memorandum of Understanding (MoU) signed by FinBank and FCMB without recourse to them as shareholders of the bank.
The plaintiffs (Nwosu and Famoroti) had listed Finbank and its Managing Director, Suzanne Iroche and two Executive Directors of the bank– Adam Nuru and Omoruyi Iyamu as co-defendants to the suit.
The list of defendants also included nine non-Executive Directors of Finbank–Theo Osanakpo, Iheanyichukwu Anyadiegwu, Agnes Ebubedike, E.O Ofobi, Ernest Oji, Aliyu Gafar, Opeyemi Oye, Lamba Zannah and Usman Umaru as well as FCMB and CBN.
The defendants had filed separate preliminary objections to the suit wherein they challenged the locus standi of the plaintiffs and the jurisdiction of the court to adjudicate on the matter.
The plaintiffs, in the petition, which was brought pursuant to Rule 4 (A) (I) of the Companies Proceedings Rules, 1992 and Sections 310 and 311 of the Companies and Allied matters Act, 2004, claimed that they were shocked to discover through newspaper publications that Finbank and FCMB had already signed MoU for business combinations under the active supervision of the CBN without recourse to them as shareholders of Finbank.
They had added that when they made further enquiry, they discovered that it had already been agreed under the said purported MoU that the entire capital of Finbank would be cancelled, and that the bank would be dissolved without winding up.
They further alleged that ever since taking over the affairs of Finbank, the CBN-appointed management had been running the bank in an oppressive and illegal manner without recourse to the shareholders and their shares.
They therefore, urged the court to mandate Finbank directors and CBN to render the account of their dealings in the bank ever since they took over the day-to-day running of the bank.
They also sought an order directing that a general meeting of Finbank shareholders be convened for the purposes of considering the account of the stewardship of the CBN-appointed management in the bank and also to elect new directors.
They further urged the court to restrain the defendants from disposing the investments and assets of Finbank including but not limited to the business operations and affairs to FCMB or any other similar entity.
It could be recalled that similar judgments have been secured in recent time in respect of Intercontinental Bank and BankPHB. Given this development, the coast is now clear for the recapitalisation process to progress to logical conclusion and it is hoped that the shareholders of the rescued banks would allow the process to progress as there would be no need for liquidation once the entire process is concluded on schedule.
By Bukky Olajide
GUARDIAN June 27, 2011