Stanbic IBTC: FRC Appeals Restraining Order

The Financial Reporting Council of Nigeria (FRC) has appealed against the decision of a Federal High Court, Lagos Judicial Division presided over by Honourable Justice Ibrahim Buba, restraining it from interfering with activities of Stanbic IBTC Holdings Plc.

In a notice of appeal filed by the FRC’s counsel, the council appealed against the whole decision of the court.

The Federal High Court had granted the prayers of the plaintiff (Stanbic IBTC) including an interlocutory injunction restraining FRC and its officers from “interfering with, or otherwise impeding, obstructing, molesting, harassing or hindering” the plaintiff’s operations.

The court had also ordered the FRC not to prevent the plaintiff or its subsidiaries “from carrying on with their lawful businesses.”

The court further restrained the council from inviting the bank’s board of directors to any meeting in connection with the defendant’s statutory investigation of the plaintiff’s statements.

The court order came two days after the Central Bank of Nigeria (CBN) rejected the request by the FRC that it should take disciplinary action against the company, citing the council’s failure to follow due process in the matter.

But in a statement on Friday, the FRC stated that its notice of appeal held that the court erred in law.

"Some of the particular errors include allowing the plaintiff to amend their Originating Summons in such a way that introduced new matters, thereby breathing life to a dead issue," it stated

The Council also faulted the decision restraining the FRC from holding meeting with the Board of Directors of Stanbic.

“The date of the ‘agreed’ meeting conveyed in the letter of invitation and which was sent to the First Respondent for which they failed to attend had passed as at when the application for amendment was filed, which renders the matter to be no more than an academic exercise”, the FRC held while declaring that it is trite law that court should not engage in academic exercise.

The FRC also based its appeal on the fact that the ”Court wrongly laid too much emphasis on the Central Bank of Nigeria letter dated 2nd November, 2015 which was irrelevant to the application before the Court.

The FRC also faulted prayer 'C' which it describes as nebulous.

The original suit arose out of the decision of the FRC to impose sanctions on Stanbic for some misstatements contained in its 2013/2014 financial statement.
The FRC had last week sanctioned Stanbic IBTC over its audited accounts for 2013 and 2014 and suspended the Financial Reporting Numbers of the bank’s
chairman, Mr. Atedo Peterside, and its chief executive, Mrs. Sola David-Borha.

The council also barred them from vouching for the integrity of any financial statements in Nigeria.

The FRC also suspended two other directors – Mr. Arthur Oginga and Dr. Daru Owei – for attesting to what it termed the “misleading” 2013 and 2014 financial accounts of the bank, as well as Ayodele Othihiwa of KPMG Professional Services for his firm’s alleged complicity in the infractions highlighted in the financial reports for the two-year period.

It 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 National Office for Technology Acquisition and Promotion (NOTAP), Securities and Exchange Commission (SEC) and the Central Bank of Nigeria (CBN), among others.

The council stated that it met with NOTAP on September 1, 2015 and also exchanged several correspondences on the matter thereafter. This made Stanbic IBTC to file a suit in court, asking the court to determine among others, whether the FCN has the power to impose a fine of N1 billion on it.