By Romanus Okoye
The Investment and Securities Tribunal sitting in Lagos has ordered a stock brokerage firm, BGL Securities Limited to pay a lawyer, George Etomi, and Helmsworth Investment Limited N90 million being the proceeds of their shares in National Sports Lottery Plc sold by BGL Securities company, in addition to a N5 million general damages. The judgment sum is to run at six percent interest rate per annum until it is liquidated.
In its judgment, the tribunal adopted the lone issue formulated by both parties: “Whether the claimants have successfully probed their entitlement to the reliefs sought in the amended originating application”. The head of the tribunal, Hon. Jude Udini identified the areas where there was convergence in the positions held by the parties, such as transfer of shares, sale of the shares, transference of the proceeds to the third defendant, re- crediting of five million shares to the claimants account, and the directive of SEC to the first defendants to pay N90 million, being the amount the shares were sold to the claimants.
He said one area of divergence is the ownership of the five million units of NSL shares. He noted that having allowed shares and issued a share certificate, the third defendant cannot turn around to claim ownership. “While in one breath, the writer admitted that the shares were allowed to Helmsworth Investments, in another breadth it is stated that no shares of NSL Plc was subscribed to, or paid for by Helmsworth. The question is, how do you allot shares to a person who did not subscribe to such shares”, he asked. “We could not understand how the first defendant who claimed that at all times material to the sale of the shares; it acted for the first claimant could turn around and remit proceeds of the sale of the first claimant’s shares to the second defendant on the instruction of a third party. The argument by the first defendant that it was acting under the instruction of the third defendant when it sold and remitted the proceeds of the first claimant’s shares to the second defendant is surprising because the Tribunal, having examined all the documents tendered by both parties is unable to find anywhere both as a matter of fact and evidence where the first claimant appointed the third defendant as its agent, or where it delegated or donated its power to the third defendant in order to deal with the five million shares. Therefore, it is our view that this contention not being supported by evidence must fail”.
The tribunal’s judgment follows suit filed by Helmsworth Investments Limited and Etomi as first and second claimants. The defendants are BGL Securities Ltd, Premier Holdings Limited and Noel C. Okorougo. The tribunal was presided over by Hon. Jude Udini with Hon. Nosa Osemwengie, Hon. Emeka Madubuike, Hon. Edward Ajayi and Hon Mamman Zargana as members.
The claimants stated that sometime in 2006, Etomi rendered legal services to the third defendant, Okorougo by representing his interests in National Sports Lottery Plc (NSL). The third defendant offered Etomi five million units of shares out of his shares at NSL as settlement for his legal fees. Etomi and his law firm reluctantly accepted, complaining that the shares were not commensurate with work done. They however requested Okorougo to transfer the shares to the first claimant, Helmsworth Investment Ltd which was done and a share certificate was issued. The defendants subsequently sent account opening forms to the second claimant for the purpose of opening the Central Securities Clearing System (CSCS).
However, in 2008, a staff of the first defendant, Clara Mshelia, called the second claimant to come and collect N10 million, being proceeds from the sale of his five million shares. Etomi rejected the money, that he did not authorize such sale. The second claimant informed Mr Okorougo that since the shares had been duly transferred to the first claimant as agreed, he had no right to give instructions to the first defendant for the sale.
Etomi petitioned the Securities and Exchange Commission and Economic and Financial Crimes Commission (EFCC), seeking the investigation of the unauthorized sale. It was discovered that the first defendant sold the shares to Dangote Sugar Company for N90 million at N18.00 per share. The claimants petitioned SEC again, asking the commission to prevail on the first defendant to pay them N90 million. SEC queried the first defendant who claimed that it acted on the instructions of the third defendant (Okorougo) who in its record was the beneficial owner of the shares and that the second claimant was considered to be a third party to the transaction.
In a letter on July 15, 2011, SEC stated that the first defendant’s conduct constituted an infraction and ordered them to pay the claimant. The first defendant however refused. Rather, it re-credited the account of the first claimant with the five million shares. Not satisfied, the claimants filed a suit before the tribunal.
In its pleadings filed on August 24, 2018, the defendants through its lawyer, P.E Ogiebor, stated that the account it opened for the claimants was on the instructions of the third defendant, and that it was he who informed it that the second claimant (Etomi) would be a signatory to the account in trust for the third defendant.
BGL Securities, the first defendant further claimed that it obtained the true identity of the owner of the shares from NSL Plc and that by a letter dated July 23, 2008, NSL informed it that they belonged to second and third defendants. It further claimed it sold the shares on the instructions of both first claimant and the third defendant.
The securities company further pleaded that prior to the sale of the shares, the third defendant was the coordinator and facilitator of the first claimant’s (Helmsworth) shares in NSL; that it was after misunderstanding amongst the shareholders, particularly Okorougo, and Etomi that the latter started claiming that Okorougo had no authority to sell the shares.