The companies involved in the case filed on November 19, 2021, are Bolawole Enterprises Nigeria Limited, Lesag Nigeria Limited and Intermanagement Nigeria Limited.
A Federal High Court in Lagos has ordered three Indian nationals to pay the sum of N98.2 million and an additional $325,000.00 to an 87-year-old businessman, Isaac Oluwole Oginni for removing him illegally as a director of three firms he established.
The companies involved in the case filed on November 19, 2021, are Bolawole Enterprises Nigeria Limited, Lesag Nigeria Limited and Intermanagement Nigeria Limited.
Justice Ayokunle Faji in his Judgement held that the illegal act of the three Indians is a breach of the right to a fair hearing and the clear provisions of section 262 of the Companies and Allied Matters Act (CAMA). He declared that the octogenarian remains a director of his three companies.
The Indians affected by Justice Faji's order in a suit numbered FHC/L/CS/1431/2019, are Mr. Jai Bhagwan Gupta, and his two sons, Vineet Gupta and Rachit Gupta.
In his statement of claims, filed and argued by his lawyer, Yakubu Galadima, the octogenarian had sought the following reliefs: "A declaration that he was a director and remains a director of the three companies listed as first, second and third defendants in the suit.
"A declaration that he being a first subscriber and director in the first to third defendants, is entitled to certain benefits, advantages and reliefs from the activities of the three companies.
"An order compelling the fourth defendant to render a comprehensive account of the Plaintiff of the N7, 000, 000, 000.00 (Seven Billion Naira) Export Everything Grant (E.E.G) granted to the first defendant by the federal government.
"An order directing the Corporate Affairs Commission, (seventh defendant) to investigate the affairs of the first, second and third defendants."
But the first to sixth defendants through their lawyer, Festus Afeiyodion, filed a 45-paragraph counter-affidavit with exhibits and written address to the suit, and urged the court to dismiss the plaintiff's originating summons for lacking in merit.
The seventh defendant, Corporate Affairs Commission (CAC) did not file any counter, and it was not represented by any lawyer for the three years that the suit lasted.
Justice Faji while delivering judgment held that no reasons were given by the defendants for the removal of the plaintiff, which showed a breach of the right to a fair hearing and the clear provisions of section 262 of CAMA. He noted that the crux of the issues was whether or not the provisions of the law as regards notice for extra-ordinary general meetings had been fulfilled.
Justice Faji held that "Section 262 of the law stated that reasons must be given in the notice requesting a director’s removal before a director can be removed while highlighting relevant sections of CAMA 1990.
"The court restrained the first to sixth defendants either by themselves, or their agents, privies, officers from any act that may curtail or impede the rights of the Plaintiff as a member and director of the first, second and third defendants.
"On the defendants' contention that the fourth defendant holds 40,000.00 fully paid up shares in the 1st defendant, as at 1987, the court stated that in exhibit 1009, it was clear that the company’s share capital is now 100,000,000.00 ordinary shares of N1.00 each.
"The fourth defendant holds 38, 000, 000. 00 of those shares which are not even paid for. The defendants did not controvert exhibit 10009 and same is deemed admitted. I must therefore hold that the defendants do not have 10 percent of the paid-up capital of the companies.
"Even plaintiff's exhibit 1009 showed that the fifth defendant has 15,000,000.00 of 100, 000, 000 but the shares were not paid for.
"The fourth defendant had 38 million shares as at 1st February, 2023 does not show that as at the date of the extra-ordinary general meeting in 2019 that he had the requisite shareholding. What is more, no reasons were given for the removal of the plaintiff and that to my mind shows a breach of the right to fair hearing and the clear provisions of section 262 of CAMA.
"I must therefore resolve issues 1 and 2 in favour of the plaintiff and hold that the first relief that is the plaintiff is a director and remains a director of the 1st to 3rd defendant has merit and is granted as prayed.
"It is obvious that the plaintiff is entitled to the following sums after prorating and deducting the figure relating to NIBCO Ltd and the Plaintiffs deceased wife to wit: Directors’ payments of N13.9 million, Vacation benefit of N12 million, Annual bonus of $150,000.00 and N55, 500, 000. 00.
"I therefore grant the plaintiff the sum of N81,000,000.00 and $150,000.00. This sum covers the benefits up to 17th August 2017, when Exhibit 1003 was made. The vacation allowance was N1,000,000.00 per year. The period from 2017 to date is 7 years. An additional sum of N7,000,000.00 is thus due to the Plaintiff as vacation allowance.”
"The yearly bonus is $25,000.00 per year making a total of $25,000 for 7 years $175, 000.00, Directors payment of N1, 400, 000.00 for 7 years is N9, 800, 000. 00. Up to date therefore, the plaintiff is entitled to the sums of N98, 200,000.00 and $325,000.00," the court held.
Justice Faji, however, refused the plaintiff's request for an order directing the first, second, third and fourth defendants to pay to him the sum of N500 million, being his benefits, commissions and brokerages from the activities of the first to third defendants. The court refused to grant relief 11, stating that it would amount to double compensation having granted reliefs 2 and 4.
The octogenarian in an affidavit averred that he is a director as well as the Executive Chairman of the three firms with 5,250,000 million ordinary share capital interest and that his wife (now deceased), who was the second plaintiff was also a director in the companies with an interest shareholding of 2, 750, 000 million, ordinary share capital.
The octogenarian stated the following: "That the companies were incorporated under the Companies and Allied Matters Act with the objectives among others include the production, procurement supply, exportation of cash crops such as, cocoa, palm kernel, crude palm kernel oil, palm kernel cake and other. And management of corporate entities, coordinating inter-relationship between corporate bodies and ensuring their cordiality.
"That upon the request and plea of the fourth defendant, Jai Bhagwan Gupta and with the consent of my wife, the fourth defendant was absorbed into the management of the Bolawole Enterprises Nigeria Limited, as a trainee and/employee, learning the skill of trading in cash crops; such as: the supply, production, storage and exportation of cash crops.
"That upon my retirement from active service in 2005 and devoting all my time and attention towards the attainment of the objectives of the companies and because of the snail trailing of the companies, several loan facilities were obtained from financial institutions secured with the statement of the net worth of properties belonging to my wife and we are joint personal guarantee of both 1st and the 2nd plaintiffs.
"That while I became fully active in the firms, the defendants in 2005 no emolument or monetary benefit was payable to me and my wife, the second plaintiff, despite several verbal demands.
"That within the year 2012 to 2014, I was able to secure a government Export Expansion Grant (EEG) in the sum of N7, 390,543,659.60 billion, for the benefit of the firms, which were diverted by Mr. Jai Bhagwan Gupta, to acquire personal property both within and outside the shores of this country."
Pa. Oginni stated that having noticed that the firms were running on huge debt, he engaged the services of a law firm known as P. I Oyewole and Co., which wrote a letter dated December 11, 2017, to the fourth defendant for the oppressive and prejudicial conduct of the firms.
He added that with no change in sight and the trend of mismanagement, the law firm by a petition dated February 26, 2018, invited the Economic and Financial Crime Commission (EFCC) to investigate the illegal repatriation and/or diversion of the Federal Government’s Export Expansion Grant (EEG).
He stated further that without his consent or a board resolution to that effect, the Indians sometime in November 2017 illegally removed and changed the signatory to the corporate accounts of the firms and that he engaged the services of a law firm known as Marble Partners LP, who wrote a letter dated June 25, 2019, to the firms’ financial institutions, notifying them about the fraudulent conduct perpetrated by Indians on the firms’ accounts.
He also stated that the Indians by a notice of extraordinary general meeting scheduled to take place on August 21, 22 and 23 respectively had proposed to remove him and the second plaintiff as directors and to strip them of their positions in the firms.
Speaking on the judgment, the plaintiff's lawyer, Yakubu Galadima, described the judgment as 'a sound and unassailable'.
He said: "This is a sound and unassailable, and also to say victory at last! It was a lesson learned. That is, our client, Chief Oginni set up an indigenous company called Bolawole Enterprises Nigeria Limited in the 80s and brought a friend of his; that is, the fourth respondent, who was sacked from another organization to manage the company.
“As time went by, the fourth respondent brought his children into the company as directors, altered the initial shares and ultimately tried to remove our client and his late wife as directors. That was when we approached the court.
"The seventh respondent (CAC) had been directed by the order of the court to audit the affairs of the companies in question. After their interrogations, appropriate sanctions will be imposed.
"As I stated elsewhere, it is a big lesson for the indigenous companies to trade with caution whenever they are dealing with foreign partners so as not to take over their companies. Our clients passed through a lot of pains while dealing with these aliens called business partners."