A Federal High Court sitting in Lagos has ordered Stanbic IBTC Bank Plc to pay a former Group Managing Director of Afribank Nigeria Plc, Patrick Olayele Akinkuotu and his company, Longterm Global Capital Limited, the sum of N4.5 billion for breach of contract.
The presiding judge, John Tsoho, also ordered Stanbic IBTC and the second defendant in the case, Starcomms Plc, to pay interest of 10 per cent on the judgement sum per annum until the date of final liquidation.
The court also ordered that the 100 million units of Starcomm shares sold to the plaintiff through private placement in 2008 were improper, invalid, null and void and were thereby set aside.
The judgement of the court was sequel to a suit filed by Akinkuotu and his company against Stanbic IBTC Bank Plc and Starcomms before the court in 2012 alleging that the Stanbic IBTC deliberately misled them into buying shares of Starcom (the second defendant) by misrepresenting facts and issuing false documents.
Joined as co-plaintiffs in the suit are: Mrs. Oluyinka Akinkuotu and a limited liability company, Lakeside Mews Limited.
?According to the claim the plaintiff filed before the court through his counsel, Chief Felix Fagbohungbe (SAN), in April, 2008, the bank through one of its officers, Akintayo Mabeweji, proposed to sell shares of Starcomms to the plaintiffs by way of private placement. Thereafter, the bank gave the plaintiffs an Investment Letter dated April 24, 2008, bearing the names of Stanbic IBTC and another company, Chapel Hill Advisory Partners Limited as Joint Issuing Houses. The Investment Letter and the Form of Commitment were represented by the bank as the only placement documents which target prospective investors were expected to rely on before they made their unfettered independent investment decisions in respect of the placement.
Based on these documents , each of the plaintiffs was committed to purchase 25, 000, 000 units of Starcomms shares and promptly complied with the instructions of the bank.
However on July 24, 2012 the plaintiffs received two separate investigation letters from the Securities and Exchange Commission (SEC) which raised several issues in respect of the private placement and upon inquires the plaintiffs discovered that the authentic and final document prepared and submitted to the SEC by the defendants was a Private Placement Memorandum dated May 5, 2008 and not the one given to them.
Consequently,the plaintiffs averred that they were induced and misled by the representation which were deliberately made by Stanbic IBTC Bank Plc which made them apply and pay for Starcomms shares.
In its defence, the bank challenged the jurisdiction of the court to entertain the suit and urged the court to dismiss it because it was frivolous and vexatious,while also claiming that the bank did not conceal any material information in order to induce the plaintiffs to offer or participate in the private placement
However, Justice Tsoho, in his Judgement agreed with the plaintiffs that the defendants deliberately concealed useful information which may have assisted them to reach a more informed decision.
He therefore declared that the plaintiffs are legally entitled to rescind the four Forms of Commitment for 100 million units of Starcomms shares which were subsequently manipulated by Stanbic IBTC Bank and were improperly and unlawfully treated as three valid applications for subscriptions and purchases under the private placement exercise.
The court also ordered Starcomms the second defendant to cancel forthwith from its register of shareholders the names of the plaintiffs.