Court Dismisses Stanbic IBTC, KPMG’s Suits against FRC

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A Federal High Court in Lagos has dismissed a suit filed by Stanbic IBTC Holdings Plc to challenge the N1 billion sanction imposed on it by the Financial Reporting Council of Nigeria (FRC) over alleged irregularities in its financial statements for 2013 and 2014. The court, which ruled on Monday, according to a statement, also dismissed a N100 million fundamental rights enforcement suit filed against the council and its Executive Secretary, Mr. Jim Obazee, by KPMG Professional Services and its partner, Mr. Ayodele Othihiwa.\r\n KPMG and Othihiwa had sued the council to challenge the suspension of Othihiwa for alleged complicity of the audit firm (KPMG) in the said Stanbic IBTC financial mis-statements. However, in a statement issued yesterday in response to the judgment, Stanbic IBTC said it had exercised its constitutional right of appeal and lodged an appeal at the Lagos Division of the Court of Appeal. \r\nStanbic IBTC has been advised by its Counsel, Fidelis Oditah QC, SAN, that it has a sound basis for lodging the appeal. The presiding judge, Justice Ibrahim Buba, resolved all the issues raised by Stanbic IBTC in its suit in favour of FRC and dismissed the suit. In dismissing the suit, Justice Buba stated that the suit filed by Stanbic IBTC was a mere academic exercise and therefore lacked merit. \r\nAccording to the statement, Justice Buba also said it was up to the court to protect Nigerian and non-Nigerian investors in these days of gross capital flight. “This court is unable to answer all the questions set by the plaintiff in favour of the plaintiff, rather against the plaintiff in favour of the defendants. All the issues argued are resolved against the plaintiff. This court must purposely through judicial creativity interpret our legislation meaningfully in these days of gross capital flight; Nigerian courts must protect Nigerian and Non-Nigerian investors. This court is unable to agree with plaintiff’s position,” the statement quoted the judge to have held.\r\nStanbic IBTC had filed its suit against the FRC following the suspension of its Chairman, Mr. Atedo Peterside, its Chief Executive Officer (CEO), Mrs. Sola David Borha and two other directors by the council over alleged irregularities in their financial statements for the 2013 and 2014. In the suit, the bank had asked the court to determine among other things whether FRC had the power to impose a fine of N1bn on it.\r\nIt urged the court to declare that the FRC has no power to dictate to a public interest entity the type of commercial agreement that it may enter into in the conduct of its businesses. It also prayed the court to declare that the council has ,no power to license directors or other office holders of a public interest entity who may sign financial statements of such entities for example by giving FRC numbers and insisting that the FRC numbers must be quoted on all financial statements signed by them.\r\nSued along with FRC was the National Office for Technology Acquisition and Promotion (NOTAP). The plaintiff had through its lawyer, Professor Fidelis Oditah (SAN), urged the court to declare that “failure to register a registrable agreement under the NOTAP Act is not a criminal offence.” The court however refused all the reliefs sought by the plaintiff and struck out the case for lack of merit.

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