Farida Waziri, EFCC Boss Photo: Sun News Publishing

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Investments and Securities Tribunal (IST) at the weekend ruled that two executive directors of Cadbury Nigeria Plc, Messrs J.S.T Bogunjoko and Biodun Jaji must pay various fines running into billions of naira and face the Economic and Financial Crimes Commission (EFCC). They were also banned from holding directorship positions in any company over presentation of untrue financial statements by Cadbury Nigeria Plc.

Details of fines include, N100,000 in the first instance and a penalty of N5,000 per day from June 30, 2002 to December 14, 2006 amounting to N8,245,000 within 21 days from the date of the decision for filing with the first respondent financial statements that contained untrue/misleading statements, failing which trading on its shares will be suspended.

They are also to pay a fine of N100,000 in the first instance and a penalty of N5,000 per day from August 24, 2005 to the date of the decision amounting to N4,855,000 within 21 days for filing a Rights Circular for the N5 billion irredeemable convertible loan stock which contained false/misleading statement, failing which trading on the company’s shares will be suspended; and they are to pay a penalty of N5,000 per day from June 30, 2002 to December 14, 2006 amounting to N8,120,000 within 21 days from the date of the decision for failing to provide funds in bloc for payment of dividends to its shareholders despite the first respondent’s directive to the appellant.

In addition to that, the directors are variously disqualified from operating in the Nigerian capital market, being employed in the financial services sector and holding directorship positions in any public company, amongst others.

SEC had earlier imposed the fines on the two executives in view of the fraudulent behaviours of their officers thus prompting them to filed an appeal with the IST on the grounds that Cadbury plc was denied fair hearing and that the SEC did not have the powers to impose punishments on the directors and refer them to the Economic and Financial Crimes Commission (EFCC).

The appellants had also argued that the case was founded on breach of the right to fair hearing under the rules of natural justice and non-compliance with the mandatory rules of procedure in commencing and continuing the proceedings against the appellants by SEC.

”Given the multiplicity of roles performed by the officers of the SEC, who also constituted the APC, it was impossible for the appellants to be accorded fair, independent and impartial hearing by reason of the fact that the SEC and its APC were the investigator, complainant, prosecutor and judge” the directors further argued, insisting that their constitutional rights were breached by the failure of SEC to adhere strictly to Rules 2 and 3 of the Schedule VII SEC Rules and also failure by SEC to invite the appellants to its sittings of March 27 and 28, 2008.

But SEC and APC, defending, argued that the appellants were given several opportunities to defend themselves. They argued that their Records of Proceedings showed that the appellants were invited to its sitting and, indeed, did appear but refused to participate in the proceedings.
SEC also argued that it has powers to regulate, monitor, control, investigate, and prevent fraudulent dealing and unfair practices in the capital market.

It also submitted that the provision of Section 36 of the Constitution of the Federal Republic of Nigeria 1999 provides an opportunity for appeal against any decision the party disagrees with, adding that since the decision of the panel was not final and conclusive, SEC could not have breached the appellants’ constitutional right to fair hearing.

However, having heard both arguments, IST held that the appellants’ (Cadbury Nig. Plc, J.S.T Bogunjoko & Biodun Jaji) right to fair hearing was not breached by the Respondents (SEC & APC) at the APC’s proceedings and that SEC and APC have the power to impose the sanctions they did on the directors and to refer them to the Economic and Financial Crimes Commission (EFCC) the way they did.