Justice Mohammed Aikawa of the Federal High Court, Ikoyi, Lagos, on Thursday said he lacked jurisdiction in the suit filed by energy giant- Oando Plc challenging the suspension of its shares on the Nigerian Stock Exchange (NSE) and appointment of forensic auditors to look into its books by the Securities and Exchange Commission (SEC) over alleged irregularities and governance infractions.
The presiding judge, based on the preliminary objection by counsel to the commission, George Uwechue, SAN, advised Oando to take rather its case to the Investment and Securities Tribunal (IST), being the proper place for such.
He agreed “that the subject matter of this issue falls within the exclusive jurisdiction of the Investment and Securities Tribunal (IST) and not this court.”
According to Justice Aikawa, “in addressing this issue, I find the provisions of the Investment and Securities Act 2007 quite instructive. Section 284 of the ISA (2007) says the Tribunal shall, to the exclusion of any other court of law or body in Nigeria, exercise jurisdiction to hear and determine any question of law or dispute involving- (a) a decision or determination of the Commission in the operation and application of this Act, and in particular, relating to any dispute- (i) between capital market operators; (ii) between capital market operators and their clients; (iii) between an investor and a securities exchange or capital trade point or clearing and settlement agency; (iv) between capital market operators and self-regulatory organisation; (b) the Commission and self-regulatory organisation; (c) a capital market operator and the Commission; (d) an investor and the Commission; (e) an issuer of securities and the Commission; and Jurisdiction of the Tribunal, etc. 132 (f) disputes arising from the administration, management and operation of collective investment schemes.
“It is not in dispute that the matter before me is a dispute between capital market operators.
That said, he added that “the duty of the court is to apply the law.
“On this premise, I have no option than to uphold the preliminary objection. I also in the same vein uphold the preliminary objection of the 2nd defendant (Nigerian Stock Exchange). This court lacks the jurisdiction to adjudicate the dispute between both parties.
“The proper place for this matter to go is IST. I therefore strike out this matter,” the judge ruled.
Reacting, Uwechue said, “We brought a notice of preliminary objection stating that this court has no jurisdiction to hear capital market matters because there is a special tribunal set up for it. And the court agreed with us. So the court upheld our preliminary objection and therefore struck out the application.”
SEC had in a statement after the suspension said its action was based on a comprehensive review of the petitions by Alhaji Dahiru Mangal and Mr Gabrielle Volpi of Ausbury investment over the ownership and shareholding structure of Oando plc, which showed that Oando Plc breached provisions of the Investments & Securities Act (ISA) 2007, breached of the SEC Code of Corporate Governance for Public Companies, and had insider dealing.
Oando Plc had obtained an interlocutory injunction stopping the NSE from carrying out the SEC directive, as well as the five firms of forensic auditors, including Akintola Williams Deloitte, which it argued was illegal, among others.
It argued that the suspension of its shares and initiation of a forensic audit was “prejudicial to the company.”
But the SEC argued in a statement that its “primary role as apex regulator of the Nigerian capital market is to regulate the market and protect the investing public. The commission notes that the above findings are weighty and therefore needs to be further investigated. After due consideration, the commission believes that it is necessary to conduct a forensic audit into the affairs of Oando Plc. This is pursuant to the statutory duties of the Commission as provided in section 13(k), (n), (r) and (aa) of the ISA 2017.
“To ensure the independence and transparency of the exercise, the forensic audit shall be conducted by a consortium of experts made up of auditors, lawyers, stockbrokers and registrars,” the regulator had stated.