Firm News
The Federal High Court holds that the Financial Reporting Council cannot investigate or unwind mergers and acquisitions in Nigeria.
24 Oct, 2014


The Federal High Court, Lagos Judicial Division,Coram; Idris J, today, 24 October 2014 held that the Financial Reporting Council of Nigeria (“the FRCN”) lacksthe vires to investigate transactions culminating into the merger between Access Bank Plc and the defunt Intercontinental Bank Plc (“IBPLC”). It will be recalled that Dr Erastus Akingbola had earlier this year filed a Petition at the FRCN, urging the FRCN amongst others, to investigate the merger between the defunct IBPLC and Access Bank Plc. DrAkingbolain his Petition urged the FRCN to investigate the erstwhile Group Managing Director of Access Bank Plc, Mr Aigboje Aig-Imoukhuede and the current Group managing Director of Access Bank Plc, Mr Herbert Wigwe for their roles in the said acquisition.The FRCN, in a bid to investigate all transactions culminating into the Merger invited Messrs Aigboje Aig-Imoukhuede and Herbert Wigwe, who were at the helm of affairsof Access Bank Plc when the merger was concluded.

On behalf of the Directors, PUC filed a Suit at the Federal High Court challenging the competence of the FRCN to investigate the transactions culminating into the merger vide an Originating Summons dated and filed on 07 April 2014, to which the FRCN filed a preliminary objection on the grounds that Suit was too premature, the Directors having not exhausted the internal remedies available at the FRCN.  In a well-considered Judgment delivered today, 24 October 2014, the Federal High Court, accepting and affirming PUC’s arguments,held that upon a combined reading of the functions and objects of the FRCN as contained in the Financial Reporting Council of Nigeria Act, 2011 theFRCN lacks the competence to investigate matters relating to mergers, acquisition and other business combinations involving financial institutions. The Court opined that the vires to conduct such investigations is donated to Central Bank of Nigeria and Securities and Exchange Commission pursuant to their respective enabling Acts and not the FRCN. 

PUC had also contended that all of the issues raised by Dr Akingbola in his Petition to the FRCN were subjudice by reason of the fact that the said issues without exception constituted the reliefs pending in Suit No. FHC/ABJ/CS/203/2014: Abdullahi Sani v Mallam Sanusi Lamido Sanusibefore the Abuja Judicial Divison of the Federal High Court, – a suit filed by some alleged shareholders of the defunct IBPLc which challenged the merger.  In rejecting all of the FRC’s arguments on this issue, the Court instructively, found that what really matters is not whether the parties are the same but whether the subject matter and reliefs sought in the Abuja Suit and the contents of Akingbola’s Petition are the same, as contended by PUC. The Court resolved the poser in the affirmative and indeed, resolved all the issues framed in the Originating Summons in favour of the Plaintiff Directors. The Court consequently issued an order of perpetual injunction restraining the FRCN from conducting or attempting to conduct any form investigation in respect of the merger between Access bank Plc and IBPLC.

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