Justice John Dagat of a Federal High Court in Lagos, on Friday, struck out a N1.8 billion suit against founder of the Living Faith Church, Bishop David Oyedepo, brought against him by a stock brokerage firm, Valueline Securities and Investment Ltd
In his ruling, the Judge described the plaintiffs’ suit as incompetent and dismissed it for want of jurisdiction.
It would be recalled that Valueline Securities and Investment Ltd and its Managing Director, Samuel Enyinnaya, had in February 2015, sued Oyedepo and his family for an alleged breach of contract in a N9 billion stock market deal.
The plaintiffs, through their lawyer, Mr Rickey Tarfa (SAN), sued for the enforcement of their fundamental rights and were claiming a total of N1.86billion from the defendants jointly and severally as professional fees and damages.
Joined with Oyedepo in the suit were his wife, Abiola; his children and blood relatives, Priscillia, Jesutobi, Makinde and Isaac, as well as his book publishing firm.
Also sued were the World Mission Agency Inc, which is the overall ruling organ of the Winners’ Chapel; Covenant University, Ota, Ogun State; and the Nigerian Stock Exchange.
The plaintiffs, in their statement of claim, averred that Oyedepo, his family and organisations entered into an Investment Portfolio Management Agreement with them.
He said that he appointed them as portfolio managers to oversee and to ensure the profitability of the said investment worth about N9billion in the Nigerian Stock Exchange.
According to the plaintiffs, it was agreed that 2.25 per cent of the net asset value of the portfolio and an annual incentive fee of 10 per cent of the returns on the investment would be paid to the plaintiffs.
The plaintiffs said that in order to enhance the profitability of the investment, they obtained some margin loans from some Nigerian banks, which, they claimed, turned out to be a great boost to the investment.
They however, said trouble started when the World Mission Agency Inc ordered the sale of majority of the securities in the investment portfolio.
He averred that inspite of professional advice to the contrary, the plaintiffs were made to sell the securities to raise N3 billion needed to buy a private jet.
He said that this was a development which brought about huge loss to the investment.
According to the plaintiffs, following the said sale of the securities coupled with the global economic meltdown which caused stock market across the globe to crash at the time, the N9billion investment recorded losses.
The plaintiffs, however, alleged that in a bid to avoid their financial obligations to the plaintiffs, Oyedepo and his organisations accused them of fraud and mismanagement.
He averred that the defendants also wrote a petition against them to the Economic and Financial Crimes Commission (EFCC).
They however, claimed that the EFCC found them innocent after six years of investigation after which Oyedepo further dragged them before the Nigerian Stock Exchange (NSE).
The plaintiffs alleged that the NSE unlawfully froze their business accounts and did not give them fair hearing.
They had therefore, urged the court to order the NSE to immediately unfreeze their accounts.
They also sought the payment of N1.86billion as their profession fee and damages.
But the defendants, through their lawyer, Mr Chioma Okwuanyi, had filed a preliminary objection and asked the court to dismiss the suit for lack of jurisdiction.
Contrary to the plaintiffs’ claim, Okwuanyi maintained that the losses recorded on the N9billion investment were due to the plaintiffs’ recklessness, adding that the margin loan they took was without the consent of the defendants.
He added that the loan was not channelled into his clients’ investment.
In the three-ground preliminary objection, Okwuanyi contended that by the provisions of the Investment and Securities Act, only the Investment and Securities Tribunal was vested with authority to entertain dispute between a capital market operator and its client
The lawyer further argued that the plaintiffs’ suit, as constituted before the Federal High Court, was premature, as the plaintiff had yet to explore all the internal dispute resolution mechanism within the NSE before heading for the court.
In its own objection, the NSE, through its counsel, Mr. M.O. Liadi, also contended that the plaintiffs ought to have approached the NSE council to ventilate their grievances rather than rush to the Federal High Court.
In his ruling on Friday, Justice Dagat upheld the defendants’ preliminary objections and dismissed the plaintiffs’ suit.
The judge agreed with the defendants that the plaintiffs ought to have taken their case before the Security and Investment Tribunal rather than the Federal High Court.
The judge also held that the plaintiffs failed to exhaust the internal dispute resolution mechanism provided in the Security and Exchange Commission before resorting to a legal action.
“On the whole, I hold as follows: This suit is based on a simple contract between the plaintiffs and the 1st to 10th defendants, which the Federal High Court has no jurisdiction to entertain.
“The plaintiffs have not complied with the pre-action requirements of the 11th defendant its rules and the Investment and Securities Act 2007.
“Even after satisfying both requirements, the appropriate venue to institute this action is the Investment and Securities Tribunal,” he said.