Alleged Fraud: Court Dismisses Suit Against EFCC By IGI

By Innocent Anaba

A Federal High Court sitting in Lagos, yesterday, dismissed the suit by Industrial and General Insurance Plc, IGI, against the Economic and Financial Crimes Commission, EFCC, and seven others, seeking to stop the anti-graft agency from investigating an alleged N141 million private share allotment fraud involving the firm.

Justice Tijjani Ringim, the trial judge, held that the EFCC has the powers under the law to investigate public fraud and financial crimes in the security exchange sector.

The plaintiff, IGI in the suit against the EFCC, Ahmed Ghali, the Lagos Zonal Head of the EFCC; Ronke Idayat Suleiman, Team B lead, Capital Market and Insurance Fraud, CMIF, unit; Osom Properties Limited; Royal Descent Limited; Frososom Nigeria Limited; Ilekhuoba Osaretin and Fando Construction Limited, had urged the court to declare that 1st to 3rd defendants lack the powers to question “purely civil commercial transaction” between it and the 4th to 8th defendants.

The plaintiff also asked the court to declare that the continued invitation of the plaintiff’s officials and employees by the EFCC in connection with the investigation of the private placement offer of its shares to the 4th to 8th defendants in 2007, is beyond the powers granted the organization under the EFCC Act and therefore, ultra vires.  

But Justice Ringim, in his ruling, said: “In contrast, to the defendants, the placement of the shares and the subscriptions by the 4th to 8th defendants were conditional to the shares being listed on the floor of the Stock Exchange, which the plaintiff refused or failed to do.

“In my humble view, such refusal or failure to comply with a term of a contract could at best be treated as a contractual breach to which the 1st to 3rd defendants have no business entertaining any grievance. In this context, the 4th to 8th defendants must go through the civil procedure route and not the criminal flag they seemed to have thrown up here.

“Nevertheless, it also appeared to me that the petition of the 4th to 8th defendants to the 1st defendant cried for public fraud. It, then, dawned on me that if such allegations of fraud could be investigated and found to be true, the 1st to 3rd defendants would be justified into committing resources to curb such a seemingly financial crime in the security exchange sector. I am not oblivious of the position of the law that vests wide powers to the 1st defendant in matters of investigation and prosecution of economic and financial crimes, which include section 6(b and h) of the EFCC Act, 2004.”

Dismissing the plaintiff’s suit, Justice Ringim held that he does not see the infringement or the threat to infringe on its fundamental rights beyond being invited by the 1st to 3rd defendants such as to conclude investigation to which progress was being made. “In the light of the above, this application fails and same shall accordingly be dismissed with no order as to cost,” he held.

IGI in 2006 requested private placement of funds and issued a public prospectus to that effect for individuals and corporate bodies to subscribe. The company had sought to raise N2.9 billion by selling ordinary shares for 50k each at N2 per share.

– Vanguard News Nigeria