The Federal High Court sitting at Abuja, in a judgement delivered on Thursday by Hon. Justice F.O.G. Ogunbanjo, has struck out three cases filed by Oando Plc and some of its directors against the Securities and Exchange Commission (SEC) for lack of jurisdiction.
Oando and three of its directors namely, Adewale Tinubu, Omamofe Boyo and Olufemi Adeyemo had instituted these cases against the SEC in view of the enforcement action taken against the Company and the affected directors in its letter dated May 31 2019, for their violation of the SEC Code of Corporate Governance, the provisions of the Investments and Securities Act (ISA) 2007 and the SEC Rules and Regulations.
Oando and the three directors had prayed the court to hold that their fundamental human rights were violated because according to them, the SEC did not give them fair hearing in investigating some petitions received by the SEC in 2017 from some shareholders of Oando Plc.
The Court in delivering its judgement, struck out the three cases and ruled that the Federal High Court cannot assume jurisdiction to entertain a matter where the subject matter falls outside its jurisdiction under the guise of enforcing fundamental human rights.
The court further held that the Federal High Court lacks jurisdiction to entertain matters arising from the Nigerian Capital Market.
On Wednesday, the SEC had expressed that it was never at any time served with court processes with respect to the purported Oando Plc matter at the FCT High court.
A high court at the Federal Capital Territory on Tuesday had nullified SEC’s indefinite suspension of Oando’s Annual General Meeting (AGM), two years ago, ruling that shareholders of the company have the rights of association as well as to assemble and hold an AGM.
The judgment followed a suit filed by Mr. Patrick Ajudua, an Oando shareholder, who challenged SEC’s suspension order.
The capital market regulating body in a statement on Wednesday stated that, “The attention of the Commission has been drawn to several publications in the media, where it is reported that a shareholder of Oando Plc, purportedly obtained a judgment from the Federal Capital Territory High Court against the Commission.
“The Commission wishes to inform the general public that it was never at any time served with court processes with respect to the purported matter at the FCT High court.
“The Commission will consequently take all necessary steps to verify and set aside the purported decision of the said Court.”
The disgruntled shareholder had filed that the directive of the SEC suspending Oando’s AGM was in breach of his rights to freedom of association as guaranteed under Section 40 of the Nigerian Constitution and Articles 9, 10 & 11 of the African Charter on Human and Peoples Rights.
A statement by the company stated that Ajudua has since been hailed as a saviour of Oando’s shareholders following his big win.
In a hearing presided by Justice O. A Musa, all pleadings filed were granted in favour of Ajudua.
Justice Musa ordered: “[Mr.] Patrick as a member and shareholder of Oando has a right and freedom of association and assembly with other shareholders and right to receive information at the AGM; [and I] declared the May 31, 2019 letter of SEC to Oando sanctioning its management, as unconstitutional, null and void, and violation of Engr. Patrick’s fundamental right to fair hearing and his human right to receive information on the affairs of Oando and his interest and shares in Oando.”
In addition, the judge declared an order, “setting aside the directive of SEC suspending/postponing indefinitely the AGM of Oando in violation, breach and contravention of Patrick’s right and freedom of association and assembly with other shareholders and right to information from other shareholders and Oando Plc, an order restraining SEC and Oando from interfering with, disrupting and or interfering with the Engr. Patrick’s constitutional right of association, assembly and right to receive information from other shareholders and members of Oando Plc at the postponed 2019 AGM.”
Furthermore, the judge ruled that, “an order of injunction restraining SEC from acting and /or taking any steps pursuant to its letter of 31st May 2019 or interfering in any manner whatsoever with Directors lawfully appointed by the Engr. Patrick and shareholder; and an order directing Oando to convene and hold AGM of Oando plc within 90 days of the order of the Court in compliance with the provisions of CAMA.”
AGM’s are an important platform for the protection of the shareholders of a company. They are also a legal requirement for all publicly listed companies the world over. Usually the main agendas for an AGM include a review of a company’s affairs and financial statements, shareholder engagement with Directors of the company to review performance, the appointment of auditors, to name a few.
By being listed on the Nigerian Stock Exchange (NSE) a company is by virtue owned by her shareholders, thus ultimate control and the destiny of a company should lie in the hands of said shareholders. Section 81 of the Companies & Allied Matters Act ascribes to every member of an incorporated company, who has fully paid for his or her shares, a right to attend all the shareholders’ meetings of such a company; and to speak and vote at such shareholders’ meetings.