The Nigerian Equities Market began the week on a bearish as the Nigerian Stock Exchange (NSE) All-Share Index declined by 0.81 per cent to close at 27,634.99, while market capitalisation ended at N9.492 trillion.
Bears dominated the trading session with 26 stocks declined while only seven appreciated. Wema Bank Plc led the seven gainers, rising by 6.4 per cent, trailed by WAPIC Insurance Plc with 4.0 per cent. FCMB Group Plc appreciated by 2.7 per cent, while Skye Bank Plc garnered 1.6 per cent, just as African Prudential Registrars Plc gained 1.5 per cent.
Conversely, Nigerian Aviation Handling Company Plc led the price losers with 7.5 per cent, followed by Forte Oil Plc with 5.0 per cent as investors continued to react negatively to the nine months results of the oil product marketing firm. The company had declined by over nine per cent last week.
Forte Oil Plc posted 34.7 per cent decline in profit after tax (PAT) for the nine months ended September.
Although the company’s top lines showed growths, higher cost of finance and tax expenses compressed the bottom-line.
Forte Oil Plc recorded a gross revenue of N121.1 billion in 2016, showing an increase of 32.2 per cent from N91.6 billion in 2015. An analysis of the revenue showed that fuels accounted for N103 billion,, up from N76.2 billion in 2015. Lubricants and greases recorded N8.188 billion, compared with N5.161 billion in 2015, while power accounted for N7.931 billion as against N7.02 billion in 2015.
Cost of sale rose by 34.3 per cent from N78.6 billion to N105 billion, while profit before tax (PBT) stood at N15.5 billion, showing an increase of 19.4 per cent. The company was able to keep operating expenses flat at N9.9 billion, against N10 billion in 2015. While other income fell by 13.9 per cent from N2.7 billion to N2.3 billion, net finance cost soared by 663 per cent to N2.2 billion. Consequently, the company ended the nine months with profit before tax (PBT) of N5.6 billion, from N5.3 billion in 2015. However, tax expenses rose by 182.6 per cent from N1.0 billion to N2.8 billion, hence PAT fell to N2.8 billion, down from N4.3 billion.
Fresh facts have emerged that Visafone Communications, winner of Unified Access Services Licence in 2007, complied with the terms and conditions given it by the Nigerian Communications Commission (NCC), regarding the sale of Visafone to MTN in 2015, before making a u-turn and a fresh demand for licence transfer, which the NCC has vehemently opposed.
THISDAY gathered that Visafone had on July 13, 2015, before the company was eventually sold to MTN in December 2015, applied for the approval of NCC to enable MTN Nigeria acquire 100 per cent equity of Visafone, by virtue of share transfer agreement, without additional request for the unified spectrum licence transfer.
NCC, consistent with its due process and procedure, reviewed Visafone’s request for the 100 per cent transfer of its shares to MTN on October 5, 2015, and granted Approval-in-Principle to Visafone Communications for the proposed transaction, subject to meeting NCC’s conditions.
According to NCC’s source, Visafone complied with the conditions specified by NCC for the transfer of shares only. The source further said upon confirmation of compliance with the given conditions for only shares transfer, NCC granted final approval for the acquisition of 100 per cent equity in Visafone Communications by MTN Nigeria.
Following the final approval given to Visafone, NCC compelled Visafone to submit to the Commission, a certified true copy of statement of share capital and return of allotment of shares from the Corporate Affairs Commission (CAC), duly filed at the CAC, or an extract from the register of members. In addition to that, NCC also asked Visafone to submit a certified true copy of particulars of directors or any change therein, duly filed at CAC for record purposes.
NCC also asked Visafone to formerly register the share sale and purchase agreement with the CAC, upon its execution.
The source said Visafone complied with all the conditions for just the transfer of shares and nothing more, and that it was based on the agreement reached between Visafone and NCC, that Visafone opened up and concluded talks with MTN in December 2015, to sell Visafone to MTN.
According to the source, it was after the deal between MTN and Visafone was concluded, that Visafone saw the need to transfer its unified spectrum licence to MTN, in addition to its 100 per cent shares, probably as a result of interest and pressure from MTN, who may have initially thought that the licence was part of the deal.
In order to legally transfer its licence to MTN, Visafone, it was gathered, made another request to NCC on June 9, 2016, six months after the sale of its shares to MTN, asking for approval to transfer Visafone licences to MTN, following the transfer of ownership to MTN Nigeria.
THISDAY learnt that NCC responded to the fresh request of Visafone and informed Visafone that its request for transfer of licences was not yet considered, but under review.
Although NCC did not approve the request for licence transfer, NCC however approved that Visafone’s subscribers could be migrated to MTN’s network in the interim and that such subscribers need to be segregated until a final decision is taken on the application for licence transfer.
NCC also said that in the interim, MTN’s tariff shall apply to all MTN and Visafone subscribers that are migrated, and that separate accounts shall be maintained by MTN and Visafone.
NCC directed that MTN shall bear the cost of devices needed by Visafone subscribers accommodated on MTN network, and that Visafone subscribers who still have airtime on their devices should be duly credited.
NCC said where the subscriber previously owned an MTN SIM card and chooses to retain the said SIM card, the airtime subsisting on Visafone’s platform should be transferred and where new SIM has to be purchased, a refund of airtime has to be made.
NCC however said any Visafone subscriber that declines to the offer, shall wait until Visafone rolls out its Long Term Evolution (LTE) network and be accommodated thereon.
MTN is however worried that its acquisition of Visafone in December 2015, did not come with the Visafone’s spectrum licence, a situation that NCC had since clarified that it never gave approval to Visafone to transfer its licence to MTN, following the acquisition of Visafone by MTN.
The Executive Vice Chairman of NCC, Prof. Umar Garba Danbatta, who made the clarification recently, said the NCC would hold a public forum to discuss the issue of licence transfer.
The Institute of Credit Administrators has called on the Federal Government to encourage looters of public funds to invest the funds in the critical sectors of the economy as deemed by the government.
The institute made its position known in a report signed by its Registrar/Chief Executive Officer, Prof. Chris Onalo.
It described the move as a new perspective aimed at weakening corruption, and a soft landing programme for the indicted politicians/public office holders.
The report read in part, “Government can reach a deal with looters. Looters could be made to invest the looted funds in sectors that government will advise for the purpose of employment generation and expanded national wealth creation.”
ICA said the government could use the principle of debt forgiveness or debt rehabilitation in credit management to forge pleas bargain in legal prosecution against the indicted looters.
It added, “Government could shield the identity of the looters, and completely refrain from doing or saying anything that may be seen as damaging to the looters.
“Going forward, government could work closely with the shielded looters to work out a new national policy on the elimination of corruption in Nigeria.”
The adoption of this model, the institute noted, would not only make available enough money to revive the economy through increased activities, but would afford the government the opportunity to institute new culture of governance, thus driving the ‘change mantra’ project to a successful direction.
It added, “With this, inflation will drop sharply. The approach will be regarded globally as Nigeria’s inclusive model to destroying corruption.”
Financial analysts have said that the release of the third quarter results will determine the outcome of the stock market trading sessions this week.
The analysts, said the capital market was likely to experience increased trading activities as some investors had begun to take position in terms of investment decisions.
They, however, attributed the market performance last week to a mix of bargain hunting and profit taking activities by investors.
“In the coming week, we expect an influx of corporate scorecards for the Q3 2016 to dictate the general market mood,” analysts at Meristem Securities Limited said in the firm’s weekly market analysis.
Mixed reactions pervaded the Nigerian equities market last week, as index appreciated in three out of five trading days of the week.
The Nigerian Stock Exchange All-Share Index gained marginally by 0.09 per cent week-on-week to settle year-to-date return at –2.73 per cent.
Due to the holiday effect in the penuktimate week, the volume and value of transactions appreciated by 24.38 per cent and 45.52 per cent week-onm-week. For the week, 22 stocks gained as against 43 decliners, representing a negative market breath.
For the fixed income market, system liquidity increased last week, following the Open Market Operations repayment of N233bn. However, there was OMO auction worth N152bn in the week.
The Central Bank of Nigeria through the Debt Management Office conducted a primary market bond auction and raised N10bn, N45bn and N40bn of 14.50 per cent Federal Government of Nigeria July 2021; 12.50 per cent FGN January 2026; and 12.40 per cent FGN March 2036 bond instruments, accordingly.
Bearish sentiments pervaded the treasury bills market, as average Treasury bills yield pared by 1.18 per cent to settle at 17.72 per cent. Also, in the Treasury bonds space, investors signalled strong appetite towards the shorter-term bond instruments.
Consequently, average bond yield declined marginally by 0.03 per cent to settle at 16.12 per cent at the end of the trading week.
At the interbank foreign exchange market, the naira depreciated by 1.06 per cent to settle at N307.77/dollar at the close of the week.
But the naira appreciated by 2.83 per cent to close at N460/dollar in the parallel market. Average forward quote stood at N324.83/dollar at the close of the week.
To this end, analysts at Vetiva Capital Management Limited, said, “As the Q3 earnings season opens up further, we expect trading activity to pick up as investors position ahead of the numbers.”
For the fixed income market, they said with no inflows expected at the start of the week to ease system liquidity, “we expect the upward trend in yields to persist.
“For the currency, we do not rule out the possibility of the naira strengthening further as the impact of the CBN’s directive further unfolds.”
For banking stocks, the Meristem analysts said the gain recorded last week was due to the bargain-hunting activities on ‘tier 1’ banks that had witnessed poor market sentiments in the prior week. “As we enter the earnings season, we anticipate nine-month 2016 results to dictate market performance in the period,” it added.
After months of agitation, the federal government has included airlines in the Interbank Foreign Exchange Market. By this development, airlines would now be given priority when they request for foreign exchange, along with others also shortlisted.
Minister of State, Aviation, Senator Hadi Sirika, who made this known at the weekend, said that this was made possible following the dogged efforts of his Ministry, the airlines through the Airline Operators of Nigeria (AON) and his personal negotiations.
Since last year, the airlines had been pushing for this inclusion because everything about aircraft management and repairs is imported, including training and even manpower engagement.
“This is after much intervention on behalf of the airlines both foreign and domestic. The Central Bank has yielded and we are happy because this means a lot to us and the airlines. They have been going through a lot and we are so happy that this is will be a huge succor to their operations”, Sirika said.
In a circular sent by CBN to the concerned sectors, it said: “In order to further engender market confidence, ensure access to FX by end users and sustain the integrity of the Nigerian Inter-bank FX market, the Central Bank of Nigeria (CBN) has resolved to intervene in the Inter-bank FX market through forward settlement.”
The inclusion of airlines in the interbank market was designated as Special Secondary Market Intervention Sales (SMIS).
CBN explained that the exercise was to clear backlog of the sectors concerned adding, “This is an important one-off exercise dedicated to the clearance of the backlog of matured FX obligations for: Raw materials and machineries for manufacturing companies; agricultural chemicals; and airlines”.
Since early this year, Sirika has facilitated meetings between AON and the CBN, Nigeria Customs Service and the Ministry of Petroleum resources on how to enhance airline operation, secure forex, tariff waiver and access to aviation fuel at cheaper prices.
The Managing Director of Arik Air, Mr. Chris Ndulue, who confirmed the inclusion of the airlines in the interbank forex market, said Arik was notified about the change at the weekend.
“Our bank told us yesterday that airlines have been included in the interbank forex market and they asked us to now make our request for forex because all the ones we had made in the past did not receive positive response, so we are going to make a new request,” he said.
“We have been agitating for this for a long time. The banks told us that both manufacturers and airlines have been included so we need to reapply. But this is still a promise until it happens,” Ndulue said.
The Senate on Thursday summoned the Central Bank of Nigeria, MTN Nigeria, the Financial Reporting Council of Nigeria, three commercial banks and some businessmen over alleged violation of the Foreign Exchange (Monitoring and Miscellaneous) Act.
The upper chamber of the National Assembly had instituted a probe into what it called the illegal transfer of $13.9bn by MTN from Nigeria to other countries between 2006 and 2016.
The Senate Committee on Banking, Insurance and Other Financial Institutions was mandated to carry out the probe by conducting an investigative hearing on the “unscrupulous violation of the Foreign Exchange (Monitoring and Miscellaneous) Act.”
The summons was contained in the “Notice of Appearance” issued by the Chairman of the committee, Senator Rafiu Ibrahim, to the affected organisations and individuals, and obtained by our correspondent.
The notice read in part, “Pursuant to Senate Resolution S/Res/017/02/16 of 27th of September, 2016 on the above subject matter, the organisations and individuals listed below are invited to appear before the Senate Committee on Banking, Insurance and other Financial Institutions on Thursday, 20th of October, 2016.
“The organisations and individuals who have not submitted the documents requested for in our earlier letter of 29th of September, 2016 are advised to do so on or before Tuesday, 18th of October, 2016.
“Mobile Telecommunications Network, Central Bank of Nigeria, Financial Reporting Council of Nigeria, Dr. Pascal Dozie, Colonel Sani Bello, Dr. Okechukwu Enelamah, Ahmed Dasuki, Gbenga Oyebode, Babatunde Folawiyo and Victor Odili.”
Also invited are Stanbic IBTC, Standard Chartered Bank, Citibank and Diamond Bank
The Senate began the probe on September 27, 2016, when a member of the upper chamber representing Kogi-West Senatorial District, Senator Dino Melaye, alleged that MTN illegally repatriated the sum out of the country through its bankers.
The lawmaker alleged that MTN transferred through Stanbic IBTC the sum of $4.87bn; Standard Chartered Bank, $5.72bn; Citi Bank, $2.98bn; and Diamond Bank, $0.35bn.
Melaye, who recalled that MTN, which is headquartered in South Africa, was incorporated in Nigeria as a private Limited Liability Company on November 8, 2000 and obtained its operating licence with $284.9m on February 6, 2001, alleged that the company did not request the Certificate of Capital Importation for the transaction.
He said, “The Senate observes that MTN did not request for the Certificate of Capital Importation from its bankers, Standard Chartered Bank, within the regulatory period of 24 hours of the inflow. The Senate observes also that the CBN was not notified of this inflow by Standard Chartered Bank within 48 hours of receipt and conversion of the proceeds to naira as required by regulations.
“It further observes that the sum of $117,683,987bn was also brought in by MTN between 2001 and 2003 in three different tranches. It is concerned that since inception, MTN had sought the collaboration of influential and unpatriotic Nigerians to assist them in looting our external reserves.”
The Nigerians, Melaye added, included a serving minister, who MTN allegedly used in moving $13.92bn out of the country, a sum that is over 50 per cent of the country’s external reserves, to floated and incorporated offshore Special Purpose Vehicles in the Cayman Island, Mauritius and British Virgin Island.
Melaye added, “The Senate was alarmed that the Minister of Industry, Trade and Investment, Dr. Okechukwu Enelamah, owner of CELTELCOM Investment Limited with address at No.608, St. James Denis Street, Port Lewis, Mauritius, purportedly claimed to invest in MTN on the 7th of February, 2008, got a Certificate of Capital Importation and filled the Form ‘A’ on the same date) and closed his investment in Nigeria after receiving dollar payment for repatriation to New York same day.
“It is also aware that these offshore entities were offered shareholders loan and their repayment to the extent of repatriation of proceeds of dividends back to MTN International South Africa through the entities and operators of the SPVs brought on board as directors of MTN Communications.
“The Senate observes that after five years of operation in Nigeria, the management of MTN Nigeria Limited suddenly realised that they needed the Certificate of Capital Importation to enable them to commence repatriation of funds realised from their businesses.
“It observes also that MTN directed their bankers, i.e. Standard Chartered Bank, Citi Bank and Diamond Bank, to issue Certificate of Capital Importation for inflows that came in five to seven years ago, which their bankers obliged without the relevant approval from the CBN.”
The lawmaker stated that what MTN’s bankers did was in strict violation of Section 15 of the Foreign Exchange (Monitoring and Miscellaneous) Act, 1995.
The naira continued on the path of appreciation on the parallel foreign exchange (FX) market yesterday as it closed at N463 to the dollar, higher than the N467 to the dollar it closed the previous day.
This development was once more attributed to the appointment of Travelex and FirstBank Nigeria Limited as the only two institutions responsible for the sale of the greenback to the Bureau De Change (BDC) sub-sector of the economy.
THISDAY yesterday reported that following their failure to fully comply with the directive which requires commercial banks that act as agents of international money transfer operators to always sell foreign currency remittances to licensed BDC operators, the Central Bank of Nigeria (CBN) this week relieved 19 other banks of the role.
However, all the affected banks are expected to sell their dollar inflows from remittances to Travelex, for onward sale to the BDC. The CBN took the decision because the returns on forex sales had shown that the affected banks had not been active in selling the greenback to BDC operators since the directive was given in July.
The President of the Association oof Bureau De Change of Nigeria (ABCON), Alhaji Aminu Gwadabe, welcomed the move by the central bank, saying it would help strengthen the naira and improve dollar liquidity in the market. “It will ensure that more dollar are distributed to BDCs in uniform and transparent manner as some of the banks have not been selling funds from the international money transfer operators (IMTOs).
“If you check, since Travelex started selling to BDCs, speculation has reduced in the market and the naira is on the path of recovery. My advise to our members is to partner with the central bank on this project. I advice everybody to be patriotic, any member that goes against the rule would be punished,” Gwadabe had said.
Travelex, a global foreign exchange company, last week began weekly disbursements of US$15,000 (part of the country’s diaspora remittances) to each of the 3,000 registered Bureaux DeBDC) operators in the country.
Travelex was officially directed by the CBN to distribute FX to BDC operators following complaints from BDCs of low supply from the banks. Nevertheless, on the interbank FX market, the spot rate of the naira remained unchanged at N304.50 to the dollar yesterday.
Integrated energy company, Forte Oil Plc, has reported a profit after tax (PAT) of N2.8 billion for the nine months ended September 30, 2016, showing a decline of 34.7 per cent compared to N4.3 billion in the corresponding period of 2015.
Although the company’s top lines showed growths, higher cost of finance and tax expenses compressed the bottomline.
Forte Oil Plc recorded a gross revenue of N121.1 billion in 2016, showing an increase of 32.2 per cent from N91.6 billion in 2015. Cost of sale rose by 34.3 per cent from N78.6 billion to N105 billion, while profit before tax (PBT) stood at N15.5 billion, showing an increase of 19.4 per cent.
The company was able to keep operating expenses flat at N9.9 billion, against N10 billion in 2015. While other income fell by 13.9 per cent from N2.7 billion to N2.3 billion,
net finance cost soared by 663 per cent to N2.2 billion.Consequently, the company ended the nine months with profit before tax (PBT) of N5.6 billion, from N5.3 billion in 2015. However, tax expenses rose by 182.6 per cent from N1.0 billion to N2.8 billion, hence PAT fell to N2.8 billion, down from N4.3 billion.
The company had posted a growth of 31 per cent in PBT for the half year (HI) ended June 30, 2016. Explaining the HI performance Group Chief Executive Officer of Forte Oil, Mr. Akin Akinfemiwa, had attributed it to aggressive sale drive, strategic retail acquisition, and prudent approach to cost containment.
According to him, HI revenue grew as a result of ongoing strategic retail acquisitions across the country, increase in pump price of premium motor spirit and increased commercial customer base for both fuels and lubricants.
He explained that the power business contributed five per cent to revenue of the group and 15 per cent to PBT as a result of low generation due to ongoing overhaul project and gas supply constraints due to the security challenges in the Niger delta region.
Looking ahead, the Forte Oil boss had said the company would focus on high margin products, fully exploit LPG business particularly, LPG retailing, bottle refilling, optimize and expand Geregu Power Plant Asset, diversify into upstream space through profitable acquisition of upstream assets and uptmising working capital structure.
“Also in the second half of 2016, we shall focus on increased supply of petroleum products imports as full deregulation kicks in and forex availability increases,” Akinfemiwa said.
In a statement by UBA on Tuesday, the new private sector lending programme agreement was sealed on the side-lines of the World Bank Annual Meetings in Washington DC, the United States, by the Vice President, EIB, Ambroise Fayolle; and the Group Managing Director, UBA, Mr. Kennedy Uzoka.
The statement quoted Fayolle as saying, “Private sector investment is crucial for creating jobs and ensuring sustainable economic growth.
“The European Investment Bank is committed to unlocking investment across Africa and we are pleased to build on past success to strengthen our partnership with UBA that will benefit projects across Nigeria.”
Uzoka was quoted to have said, “Our growing partnership with the European Investment Bank underlines our long-term objective of facilitating the development and growth of African businesses. This facility will enable UBA bridge critical financing gaps for Nigerian companies and deepen our capacity to support their growth aspirations in the local and international market place.”
The Head of the European Union Delegation to Nigeria and ECOWAS, Ambassador Michel Arrion, described the programme as an example of the catalytic role the EU and its institutions like the EIB were playing to support Nigeria’s economic development.
“We look forward to more fruitful partnerships with Nigeria, and particularly with the private sector, which remains the engine of economic growth,” he added.
Under the new initiative, private sector entrepreneurs and companies will be able to use loans with a longer tenor than traditionally available to invest and expand activities across a range of sectors.
The new loan will also fund capital expenditure by UBA to strengthen their support for private investment, through expansion of their branch network and improving information technology.
The EIB has supported infrastructure and private sector investment in Nigeria since 1978.
The EIB is the world’s largest international public bank and over the last five years has provided EUR 12.8bn for investment across Africa.
A Federal High Court in Lagos has struck out a N1.86bn suit filed against the founder of the Living Faith Church, a.k.a. Winners’ Chapel, Bishop David Oyedepo, by a stock brokerage firm, Valueline Securities and Investment Limited.
Justice Jude Dagat, in a ruling on Friday, described the plaintiffs’ suit as incompetent and dismissed it for want of jurisdiction.
Valueline Securities and Investment Limited and its Managing Director, Samuel Enyinnaya, had in February 2015 sued Oyedepo and his family for an alleged breach of contract in a N9bn stock market deal.
Joined as the 10th defendant in the suit was the Security and Exchange Commission.
The plaintiffs, through their lawyer, Mr. Rickey Tarfa (SAN), sued for the enforcement of their fundamental rights and were claiming a total of N1.86bn from the defendants jointly and severally as professional fees and damages.
The plaintiffs, in their statement of claim, averred that Oyedepo, his family and organisations entered into an Investment Portfolio Management Agreement with them and appointed them as the portfolio managers to oversee and to ensure the profitability of the said investment worth about N9bn in the Nigerian Stock Exchange.
According to the plaintiffs, it was agreed that 2.25 per cent of the net asset value of the portfolio and an annual incentive fee of 10 per cent of the returns on the investment would be paid to the plaintiffs.
The plaintiffs said that in order to enhance the profitability of the investment, they obtained some margin loans from some Nigerian banks, which, they claimed, turned out to be a great boost to the investment.
They however said trouble started “when Oyedepo wanted to buy his first private jet and the World Mission Agency Inc ordered the sale of majority of the securities in the investment portfolio, and that despite the professional advice to the contrary, the plaintiffs were made to sell the securities to raise the N3bn needed to buy the jet, a development which brought about huge losses to the investment.”
According to the plaintiffs, following the said sale of the shares coupled with the global economic meltdown which caused stock market across the globe to crash at the time, the N9bn investment recorded losses.
The plaintiffs, however, alleged that in a bid to avoid their financial obligations to the plaintiffs, Oyedepo and his organisations accused them of fraud and mismanagement and wrote a petition against them to the Economic and Financial Crimes Commission.
They however claimed that the EFCC found them innocent after six years of investigation after which Oyedepo further dragged them before the Nigerian Stock Exchange.
The plaintiffs alleged that the NSE unlawfully froze their business accounts and did not give them fair hearing.
They had urged the court to order the NSE to immediately unfreeze their accounts.
They also sought the payment of N1.86bn as their professional fee and damages.
But the Oyedepos, through their lawyer, Mr. Chioma Okwuanyi, filed a preliminary objection and asked the court to dismiss the suit for lack of jurisdiction.
Contrary to the plaintiffs’ claim, Okwuanyi maintained that the losses recorded on the N9bn investment were due to the plaintiffs’ recklessness, adding that the margin loan they took was without the consent of the Oyedepos and that the loan was not channeled into his clients’ investment.
In the three-ground preliminary objection, Okwuanyi contended that by the provisions of Section 34 of the Investment and Securities Act, only the Investment and Securities Tribunal had the vested authority to entertain a dispute between a capital market operator and his client and not a Federal High Court, to which the plaintiff had brought the matter.
The lawyer further argued that the plaintiffs’ suit, as constituted before the Federal High Court, was premature, as the plaintiff had yet to explore all the internal dispute resolution mechanism within the NSE before heading for the court.
In its own objection, the NSE, through its counsel, Mr. M.O. Liadi, also contended that the plaintiffs ought to have approached the NSE council to ventilate their grievances rather than rush to the Federal High Court.
“Given the complaints of the plaintiffs against the decision of the applicant, the plaintiffs ought to have approached the applicant’s council and if still unsatisfied, the plaintiff is obliged to proceed to the Securities and Exchange Commission.
“If still unsatisfied, by the provisions of sections 284 and 289 of the Investment and Securities Act, the plaintiffs are permitted to proceed to the tribunal. We submit that the plaintiffs have failed to do this,” Liadi contended.
In his ruling on Friday, Justice Dagat upheld the defendants’ preliminary objections and dismissed the plaintiffs’ suit.
The judge agreed with the defendants that the plaintiffs ought to have taken their case before the Security and Investment Tribunal rather than the Federal High Court.
The judge also held that the plaintiffs failed to exhaust the internal dispute resolution mechanism provided in the Security and Exchange Commission before resorting to a legal action.
The judge held, “On the whole, I hold as follows: This suit is based on a simple contract between the plaintiffs and the 1st to 10th defendants, which the Federal High Court has no jurisdiction to entertain.
“The plaintiffs have not complied with the pre-action requirements of the 11th defendant under its rules and the Investment and Securities Act 2007. Even after satisfying both requirements, the appropriate venue to institute this action is the Investment and Securities Tribunal.
“The preliminary objection filed by the 1st to 10th defendants/applicants and that filed by the 1th defendant/applicant have merit. This court declines jurisdiction to entertain this suit. The court cannot further transfer the suit to the Investment and Securities Tribunal because even the pre-action requirements have not been satisfied. The suit is hereby struck out.”
