Tribunal Overrules FCMB in N2.5bn Debt

The Investments and Securities Tribunal (IST) sitting in Abuja has finally resolved a decadelong cyclical dispute between a stock broking firm, Valueline Securities and Investments Ltd and First City Monument Bank Plc (FCMB) over the repayment of N2.5 billion shares purchase fund misappropriated in 2008 by the defunct FinBank Plc with which FCMB consummated a merger.

The Director, Corporate Affairs, IST,

Mr. Kenneth Ezea conveyed the Tribunal’s verdict via a press statement Tuesday.

The matter had been handled by the SEC, CBN, AMCON and the Federal High Courts over the decade.

Giving judgment in the case filed by Valueline Securities and Investments Ltd as claimant against Securities and Exchange Commission (SEC), Central Bank of Nigeria (CBN) and First City Monument Bank Plc as 1st, 2nd, and 3rd defendants, the ISt found FCMB liable to pay the claimant an outstanding debt of N988,533,205.86 plus further accrued interest calculated at 18 per cent in the manner earlier directed by the Securities and Exchange Commission (SEC) pursuant to her statutory powers listed in Section 96 of the Investments and Securities Act (ISA)2007.

FCMB is also to pay a penalty of N500, 000.00 to the Claimant as cost of the legal action and a further 10 per cent interest on the judgment debt from the date of the judgment until final defrayment.

The Chairman of the Tribunal, Hon. Siaka Isaiah Idoko-Akoh, who delivered the judgment, explained that the Claimant’s case was that in 2008, it applied for and deposited N2.5billion to buy shares in the Finbank Public Offer but at the end was neither allotted the shares nor was his money returned to him as required by capital market regulations.

According to its pleadings and testimonies, Idoko-Akoh said the claimant petitioned the SEC after failing to get its refund.

The SEC, in line with its regulatory functions investigated the complaint, found Finbank culpable and ordered it to pay back the N2.5billion with 18 per cent interest per annum from September 23, 2008 until full liquidation.

However, when the bank failed to pay, the SEC sought the intervention of the CBN; coincidentally, at the time when the FCMB and Finbank were planning a merger. An All Parties Meeting (APM) was convened where the FCMB undertook to repay the indebtedness of Finbank and for its account with the CBN to be debited at source by CBN provided the merger of the two banks was approved by SEC to succeed.