N9bn stock deal: Court Fixes March 25 to rule on Bishop Oyedepo's objection To Broker's Suit

N9bn stock deal: Court Fixes March 25  to rule on Bishop Oyedepo's objection To Broker's Suit

  

A Federal High Court in Lagos will on March 25, 2015 decide whether or not to dismiss a suit filed against the Founder of the Living Faith Church, a.k.a. Winners' Chapel, Bishop David Oyedepo by a stock brokerage firm, over an alleged breach of contract.

The trial judge, Justice Mohammed Yunusa fixed the date yesterday after hearing a preliminary objection filed by Oyedepo challenging the jurisdiction of the court to entertain the suit.

The stock brokerage firm, Valueline Securities and Investment Limited and its Managing Director, Samuel Enyinnaya had filed the suit claiming about N1.86bn from Oyedepo and others as damages for allegedly breaching an agreement on a N9 billion investment managed by the firm.

Apart from Oyedepo other defendants in the suit are: Living Faith Church, World Mission Agency Inc (the overall ruling organ of the church), Covenant University, David Oyedepo Foundation, Mrs Faith Abiola Oyedepo (Oyedepo's wife), Joys Priscillia Oyedepo, Love Jesutobi Oyedepo, David Makinde Oyedepo, Isaac Oyedepo (all Oyedepo's children and blood relatives).

Also joined as defendant in the suit is Nigerian Stock Exchange, which the plaintiff accused of being biased in its investigations into the N9 billion business dispute.

The plaintiffs had also urged the court to declare as illegal, the freezing of their bank accounts by NSE, and to make an order to immediately unfreeze the accounts.

When the case resumed for hearing on Monday, counsel to Oyedepo, Chioma Okwuanyi, brought to the notice of the court a preliminary objection to the plaintiffs' claims.

Bishop Oyedepo, in the three grounds of objection filed on his behalf by the lawyer submitted that the Federal High Court lacked jurisdiction to adjudicate on a matter pertaining to the capital market.

Okwuanyi cited the provisions of Section 34 of the Investment and Securities Act, saying that it is only the Investment and Securities Tribunal, has the vested authority to entertain a dispute between a capital market operator and his client.

The lawyer aldo argued that if it was true as the plaintiffs had said that the matter was "a simple contract" bordering on investment portfolio management, the state High Court and not the Federal High Court had jurisdiction on the case.

Also, the lawyer argued that the plaintiffs' suit as presently constituted before the court was premature, as the plaintiff had yet to explore all the avenues laid down to resolve such dispute before heading for the court.

He said ; "my Lord, what we are saying is that, going by the reliefs sought by the plaintiffs, they have said that this issue is a simple contract relating to investment portfolio management and our contention is that issues of simple contracts are never within the jurisdiction of the Federal High Court.

"Also, going by the Clause 14 of the Investment Management Agreement, this matter as presently constituted is premature in that what clause 14 prescribed is that parties would resort to arbitration to resolve all disputes.

"My Lord, Section 251 of the Constitution does not donate jurisdiction to this court in respect of capital market. We therefore urge your Lordship to uphold our objection and to strike out this suit or refer the case to the Investment and Securities Tribunal or to arbitration."

The lawyer who represented the Nigerian Stock Exchange in court, M.O. Liadi, argued that the plaintiffs ought to have approached the NSE Council to ventilate their grievances rather than coming before the Federal High Court.

Liadi said, "Given the complaints of the plaintiffs against the decision of the applicant, the plaintiffs ought to have approached the applicant's council and if still unsatisfied, the plaintiff is obliged to proceed to the Security Exchange Commission. If still unsatisfied, by the provisions of sections 284 and 289 of the Investment and Securities Act, the plaintiffs are permitted to proceed to the tribunal. We submit that the plaintiffs have failed to do this."

Responding to the defendants' submission, the plaintiffs' lawyer, Rickey Tarfa (SAN), urged the court to assume jurisdiction, and to dismiss the defendants' preliminary objection for being irregular and for failing to comply with the rules of the court.

The plaintiffs, in their statement of claim, averred that the Oyedepos  entered an Investment Portfolio Management Agreement with them and  appointed them as the portfolio managers to oversee and to ensure the profitability of an investment worth about N9 billion in the Nigerian Stock Exchange.

The plaintiffs had claimed that in order to enhance profitability of the investment, they went ahead to obtain some margin loans from some Nigerian banks, which turned out to be a great boost to the investment.

They however stated that trouble started when Oyedepo wanted to buy his first private jet and the World Mission Agency Inc, ordered the sale of majority of the securities in the investment portfolio, and that despite the  professional advice to the contrary, the plaintiffs were  made to sell the securities to raise the N3 billion needed for the jet, a development which brought about huge losses to the investment.

But Oyedepo's lawyer, Okwuanyi, said that the losses recorded by the investment was due to the plaintiffs' recklessness with the merging loan purportedly obtained by the plaintiffs.

He argued that the margin loan was neither obtained with his client's consent nor was for the purpose of the investment.

Okwuanyi said, "The first to the ten defendants vehemently protested the borrowing and rejected same as borrowing was and still banned in the activities of the first to the tenth defendants.

“The losses occasioned to the investment of the 1st to the 10th defendants were as a result of the negligence and recklessness of the plaintiffs. It was an outright fraud.

“None of the reports submitted by the plaintiffs captured the margin borrowing because they were all in their names and not in the name or on behalf of the first to the ten defendants.