Court seals Access Bank, Diamond Bank merger

The Federal High Court (FHC) has sanctioned the approved scheme of merger between Access Bank Plc and Diamond Bank Plc, the final seal that effectively brings the merger of the two commercial banks into effect.

Consequently, the Nigerian Stock Exchange (NSE) yesterday suspended trading on the shares of Diamond Bank Plc, which will be dissolved without being wound up and subsequently delisted from the Exchange.

The court sanction, statutorily the final phase of a pre-merger process, which was filed at the NSE, affirmed all the key headlines of the transactions, which had earlier been approved by shareholders of the two banks, the Central Bank of Nigeria (CBN) and Securities and Exchange Commission (SEC).

The Nation had on Monday reported that financial regulatory authorities had given final approvals to the scheme of merger, paving the way for submission to a Federal High Court for the final court sanction.

Under the terms of the merger, Diamond Bank will transfer all its assets, liabilities and undertakings to Access Bank and the entire issued share capital of Diamond Bank shall be cancelled and Diamond Bank shall be dissolved without being wound up. In exchange, Diamond Bank’s shareholders shall receive a cash consideration of N1 per share and two ordinary shares of the enlarged Access Bank for every seven ordinary shares of Diamond Bank held as at the effective date.

Access Bank will be the post-merger entity while its Group Managing Director, Herbert Wigwe will continue to lead the post-merger management as chief executive. The business combination is expected to leapfrog post-merger Access Bank as Nigeria’s largest bank by total assets and one of Africa’s largest retail banks.

The NSE explained that the full suspension on Diamond Bank, which took effect yesterday March 20, 2019, was sequel to the court sanction, which brought the business combination into effect on Tuesday March 19, 2019.

“The suspension is required to prevent trading in the shares of the bank in order to determine the bank’s shareholders who will qualify to receive the Scheme consideration,” NSE stated.

The NSE noted that the scheme of merger will result in the delisting of Diamond Bank Plc from the Daily Official List of the Exchange.

Directors and management of the banks said the merger will create significant values for all stakeholders, underlining the inherent synergies and value accretion in the business combination.

The business combination is expected to form a leading Tier 1 Nigerian bank and the largest bank in Africa by number of customers, spanning three continents, 12 countries, 3,100 Automated Teller Machine (ATM), more than 33,000 Point of Sales (PoS) terminals, 27 million clients and more than 10 million mobile customers.

Diamond Bank and Access Bank share many of the same areas of focus, including women, youth, entrepreneurs and the financially excluded and will be able to further develop their positioning and market leadership in these growth sectors. Diamond Bank’s corporate customers will also be able to benefit directly from Access Bank’s corporate expertise in trade finance, cash management, treasury and corporate finance.

Group Managing Director, Access Bank Plc, Mr Herbert Wigwe, said the two banks share several common values and technologies that make the business combination a seamless one.

According to him, the merger of the banks will create significant opportunities and benefits to customers, shareholders, staff and other stakeholders.

He noted that the combination of Diamond Bank’s strong retail customer franchise and Access Bank’s proven risk and capital management expertise will create a post-merger bank with strong value creation potential.

He pointed out that while the merger will lead to 19 per cent shareholding dilution, the business combination accelerates Access Bank’s plan to become a leading bank in Nigeria and gateway to Africa.

NB plc set to  defend the lawsuit filed against it by the Nigerian Copyright Commission

The Management of the Nigerian Breweries Plc on Monday released a statement on a pending legal case brought against it by the Nigerian Copyright Commission (NCC). The company stated that it was defending the action filed against it and its former Managing Director/Chief Executive Officer, Mr Johan A. Doyer, by the NCC. The case is pending at the Federal High Court in Abuja.

According to the company, the case is not new as it was instituted in October, 2017 by one Mr Paul Allen Oche, who is laying claims to the copyright supposedly contained in a book he “wrote” and which book has, as part of its title the Amstel Malta trademark which is well known as one of the brands in the company’s portfolio.

The claimant, Mr Oche has subsequently filed a personal action with respect to the same issue, claiming damages against the company and others. The company also confirmed that it will be defending the action with a view to protecting its legal rights as well as upholding its reputation.

About the lawsuit

In the suit, the NCC accused Nigerian Breweries and its former MD, Johan A. Doyer of infringing on copies of a book titled, “The Amstel Factor”, a book in which copyright subsist in favour of one Mr Paul Allen Oche.

Mr Oche through his lawyers wants the court to declare that he is the owner of the copyright over the intellectual literary work titled “The Amstel Factor” an Amstel Malta Guide on how to be the best you can be. He claims that the settings, imageries used in the brewer’s “Why Add More?” Amstel Malta campaign infringed on his rights since the brewer’ neither sought nor obtained his permission to adapt and publish his intellectual literary work in their campaign

No Court Order to forfeit Sales Value of Our Airtel Shares – O&O Networks Limited, Subsidiary of Ecobank Group

O&O Networks Limited, Special purpose vehicle owned by the Ecobank Group says contrary to certain media reports, there is no forfeiture order of the Federal High Court of Nigeria in its proceedings that is directed against Ecobank Transnational Incorporate (ETI) or Ecobank Nigeria Limited.
 O&O Networks Limited is defending long-standing proceedings in the Federal High Court relating to its ownership of shares in Airtel Networks Limited that were once owned by it.
The company previously owned by Oceanic Bank, formed part of Ecobank Transnational Incorporated’s (ETI) in 2011 after the acquisition of Oceanic Bank. Legal proceedings were first initiated against O&O Networks Ltd in December 2006 by Broad Communications Ltd (“plaintiff”), in the Federal High Court of Nigeria.
A statement released by O&O Networks, pointed out that there is no forfeiture order of the Federal High Court of Nigeria in these proceedings that is directed against ETI or Ecobank Nigeria Limited.
According to the statement, there have been no material legal developments in the plaintiff’s substantive claim for monetary compensation since 2017, though a trial date on the substantive merits was recently fixed for May 28, 2019.
The statement reads: “Contrary to certain press reports, there is no forfeiture order of the Federal High Court of Nigeria in these proceedings that is directed against ETI or Ecobank Nigeria Limited, and neither ETI nor Ecobank Nigeria Limited has made or is required by law to make any payment to the Federal High Court of Nigeria in relation to this long-standing litigation. There have been no material legal developments in the plaintiff’s substantive claim for monetary compensation since 2017.
“In 2006, the plaintiff’s claim was grounded  on an alleged right of first refusal over shares in Airtel Networks Limited that O&O Networks owned.  The plaintiff claimed ownership of the Airtel shares based on its right of first refusal. In 2017, the plaintiff amended its claim to seek monetary compensation of USD equivalent of Naira 10 billion (approximately US$28 million) in place of its claim of ownership of the Airtel share.
” Since the matter was filed in 2006, it has not proceeded to trial on the substantive merits of the claim to date though a trial date on the substantive merits was recently fixed for May 28, 2019
“In August 2018, O & O Networks sold its shares in Airtel Networks Limited for Naira 22.5 billion (approximately US$62.5 million) with the permission of the Federal High Court on 7 June 2018 and subsequently in September 2018, the plaintiff filed an interlocutory application requesting the Federal High Court of Nigeria to grant an order directing O&O Networks to place Naira 22.5 billion (approximately US$62 million) – the entire proceeds of the sale of the Airtel shares and an amount which is significantly in excess of the plaintiff’s total monetary claim – into an escrow account in the name of the Chief Registrar of the court, pending the final determination of the substantive claim.  The Federal High Court of Nigeria granted the plaintiff’s interlocutory application on 7 March, 2019.
“O&O Networks has filed a notice of appeal and an application for stay of execution to this ruling. O&O Network’s appeal to the interlocutory order is currently pending, and it intends to prosecute the appeal vigorously.
Major General Umaru Mohammed Is A Bad Debtor; Trying To Arm-Twist Ecobank

The court case instituted against Ecobank by the Economic and Financial Crimes Commission (EFCC) involving Major General Umaru Mohammed is best described as that of a recalcitrant debtor trying to avoid the debt he owes the bank. The bank is advised to pursue the case to its logical conclusion.
 This was the position of an ex-banker who pleaded anonymity. He said the indebtedness arose from a Mastercard Credit Card Major General Umaru Mohammed obtained from the Bank with an outstanding debt of over Nine Million Naira to the bank.
He stated that “Major General Umaru Mohammed was indeed indebted to the Bank and only decided to retract paying his debt recently upon an upsurge in recovery activities on unpaid account. The ex-Banker queried why General Umaru did he not act since 2013 when he discovered the said alleged fraud on his account.”
The EFCC had Thursday March 7th, arraigned the Bank and its ex-staff, Aniekan Udoh for “negligently failing to exercise due diligence in relation to the conduct of financial transactions with Major General Mohammed.” The defendants pleaded not guilty.
The ex-banker who is privy to the transaction and have been following the case maintained that Ecobank is a financial institution in the business of taking deposits and lending money to the public and the issue at stake is purely a banker -customer relationship matter with no crime or intent to commit crime whatsoever.
According to him, Major General Mohammed appears to be using the court process to evade his obligations to the bank. He further said “everybody privy to the history of the case is surprised that the debtor could resort to legal ambush method.”  He does not believe however that his tactic will be successful given the antecedent of the Bank in recovering all unpaid debts in a bid to safeguard depositors fund.
He noted that Ecobank Nigeria is one of the banks strictly guided by Central Bank of Nigeria (CBN) rules and Code of Conduct guiding financial institutions in its day to day operations, stressing that in dealing with customers, the bank believes in equity and fairness. “Ecobank is an ethical bank that carries out its business in compliance with global best practices. The court I am sure will do  justice in this matter. People should not use their position to avoid paying their debt”.
At Tuesday’s hearing, the Lawyer representing Ecobank, Emuobonuvie Majemite of Punuka Attorneys & Solicitors, maintained that the Bank will pursue the case to its logical conclusion to ensure justice.
N1.5m Fraud: Sent Ex-Jaiz Bank Staff To One Year Prison

Justice Fadawu Umar of the Borno State High Court, sitting in Maiduguri, has sentenced Imam Malik to one year in prison for fraudulently collecting the sum of N1,500,000 (One Million Five Hundred Thousand Naira) only from one Muhammad Sani Abubakar, for a purported Mudaraba Investment with Jaiz Bank Plc.

The one-count charge against him reads: “That you, Imam Malik, a former staff of Jaiz Bank Plc, sometimes in November 2016, in Maiduguri, Borno State, within the Jurisdiction of this Honourable Court with intent to defraud, did obtain the sum of N1,500,000 (One Million Five Hundred Thousand Naira) only from one Muhammad Sani Abubakar, a customer of Jaiz Bank, under the false pretence that the said money will be used to service his interest in Mudaraba Investment, which pretence you knew to be false and thereby committed an offence contrary to section 320(a) of the Borno State Penal Code Laws cap, 102 and punishable under section 322 of the same law.”

He pleaded “guilty” to the charge on February 4, 2019, when he was arraigned.

The trial judge thus found him guilty and fixed yesterday, March 12, 2019 for sentencing.

In sentencing him, Justice Umar, however, gave him a fine of N100,000, which if he defaults to pay, he would spend the one year in prison.

Court Reaffirms SEC’s Regulatory Oversight Over Public Companies In Nigeria

The Court of Appeal has reiterated the Securities and Exchange Commission’s powers to intervene in the management and control of any public company which is considered to have failed, is failing or is in crises.

The SEC is statutorily mandated as the apex regulator of the Nigerian capital market to ensure the protection of investors and maintain a fair, efficient and transparent market.

Recall that in 2008, the SEC conducted an investigation on Big Treat Plc a public listed company (1stRespondent) and its directors which revealed several infractions of the Investments and Securities Act 2007 such as inadequate internal control systems and a breakdown of corporate governance in the company.

Based on the foregoing, and pursuant to the provisions of Section 13 (v) of the ISA 2007, theCommission in 2010 approached the Federal High Court seeking a number of reliefs against Big Treat Plc (1stRespondent), three of its directors – Pamela Wu, Harries Wu, Steve Wu – and two entities owned by them – New Frontier Engineering and Construction Company Ltd and Skyone Group of Companies Ltd with a view to preserving the assets of the 1stRespondent.

In the course of the proceedings, the Commission applied for and was granted an ex-parteorder of interim injunction restraining the 2nd– 6thRespondents, their agents, servants or privies from obstructing the Commission in the exercise of its statutory oversight responsibilities to the 1stRespondent including the appointment of an interim management to take charge of the day to day administration of the 1stRespondent with a view to preserving its assets in the interest of its stakeholders pending the determination of the Motion on Notice already filed in this suit.

However, the ex-parte order was subsequently vacated on the grounds that the 1stRespondent (Big Treat Plc) “was not a capital market operator amenable to the control and management of the appellant in times of financial distress”.

The Commission appealed against the decision of the Federal High Court and the sole issue for determination as raised by the Commission before the Court of Appeal was “whether the lower court was right when it held that the 1stRespondent (Big Treat PLC) is not a capital market operator because it does not play any specific role in the capital market and as such, not registerable or subject to the control of the Appellant (the Commission)”.

The Court of Appeal in a judgement delivered on 31stJanuary 2019, held thus;

“That the 1stRespondent, an issuer of securities, having been duly registered with the Appellants and was at all material times performing the specific function of issuing securities in the capital market was subject to the intervention of the statutory powers of the Appellant as the pinnacle regulatory authority for the Nigerian capital market whose sole purpose is to ensure the protection of investors and to maintain fair, efficient and transparent capital market as well as reduction of systemic risk as stated in the preamble of the ISA- the beacon light to the powers of the Appellant under the ISA.”

The Court of Appeal further held that;

“In conclusion, I most respectfully hold that the court below should not have vacated the interim preservative order made by it to protect the imminent collapse of the 1stRespondent but the Appellant who at all material times was exercising statutory powers under the ISA to stem the tide of decay in the internal management of the 1stRespondent…”