NIGERIA: MAN, OTHERS TO GET N4.5B COMPENSATION FROM STANBIC IBTC BANK FOR BREACH OF CONTRACT

Patrick Olayele Akinkuotu, and his company, Longterm Global Capital Limited and 2 other co-plaintiffs have been awarded a N4.5 billion compensation by the Federal High Court, Lagos. Mr. Akinkuotu is also a former Group Managing Director of Afribank Nigeria Plc.

The court’s judgement was in respect of a 2012 suit filed by Akinkuotu and his company against Stanbic IBTC Bank Plc and the second defendant, Starcomms which alleged that the plaintiff was misled by Stanbic IBTC to buy Starcom shares through misrepresentation of facts and the presentation of false documents.

Justice John Tsoho reading the judgment on behalf of the panel also ruled that Stanbic IBTC and Starcomms Plc would continue to pay the plaintiffs an annual interest of 10 per cent on the judgment sum until it was finally paid off. The judgment also ordered that the 100 million units of Starcomm shares sold to the plaintiffs in the transaction in question were improper, invalid, null and void and therefore set aside. The sale of the shares was through a private placement in 2008.

Details of the suit show that the plaintiffs in 2008 received from Stanbic IBTC a proposal hrough one of its officers, Akintayo Mabeweji, for the sale of the shares of Starcomms through the means of a private placement. The bank then followed up by sending the plaintiffs an Investment Letter dated April 24, 2008, which bore the names of Stanbic IBTC and Chapel Hill Advisory Partners Limited as Joint Issuing Houses for the private placement offer.

On the receipt of these documents, the plaintiffs being convinced that the transaction was genuine went ahead to commit to purchase 25 million units of the Starcomms shares and went on take steps to comply with the instructions of the bank.

The plaintiffs carried out the purchase based on the Investment Letter and the Form of Commitment which were presented by Stanbic IBTC as the only placement documents which prospective investors needed to rely on before making their decision on the private placement.

Contrary to the bank’s advice, the plaintiffs surprisingly on July 24, 2012, received two separate investigation letters from the Securities and Exchange Commission (SEC), which drew their attention to several issues in respect of the private placement. Following this the plaintiffs made inquiries and found out that the authentic and final document prepared and submitted to the Securities and Exchange Commission (SEC) by the defendants was not the one given to them but a Private Placement Memorandum dated May 5, 2008.