A Federal High Court sitting in Lagos southwest Nigeria has adjourned till March 25 a ruling on the preliminary objection filed by the founder, Living Faith Church, a.k.a. Winners’ Chapel, Bishop David Oyedepo, against a suit accusing him of breach of contract.
In the suit instituted by a stock brokerage firm, Valueline Securities and Investment Limited and its Managing Director, Samuel Enyinnaya the plaintiffs are claiming about N1.86billion from Oyedepo, his family, his book publishing company and the Winners’ Chapel for allegedly breaching agreement on a N9billion investment entrusted to them
Joined as co-defendants is the Nigerian Stock Exchange, which the plaintiffs accused of being biased in its investigations into the N9billion business dispute.
The plaintiffs are also urging the court to declare as illegal the freezing of their bank accounts by Nigeria Stock Exchange and to make an order to immediately unfreeze their accounts.
At the resumed hearing today, counsel for Oyedepo, Mr. Chioma Okwuanyi, drew the attention of the court to his client’s preliminary objection to the stockbroker’s claims.
In the three grounds of objection, Okwuanyi contended that the Federal High Court lacked jurisdiction to adjudicate on any matter pertaining to capital market.
According to him, by the provisions of Section 34 of the Investment and Securities Act, only the Investment and Securities Tribunal had the vested authority to entertain a dispute between a capital market operator and his client.
Okwuanyi further submitted that if it was true as the plaintiffs had said that the matter was “a simple contract” bordering on investment portfolio management, the state High Court and not the Federal High Court had jurisdiction on the case. Besides, the lawyer argued that the plaintiffs’ suit as presently constituted before Justice Mohammed Yunusa was premature, as the plaintiff had not explored all the avenues laid down to resolve such dispute before heading for the law court.
M. O Liadi appearing for the Nigerian Stock Exchange, told the court that the plaintiffs ought to have approached the NSE Council to ventilate their grievances rather than coming before the Federal High Court and if not satisfied, by the provisions of sections 284 and 289 of the Investment and Securities Act, the plaintiffs are permitted to proceed to the tribunal. We submit that the plaintiffs have failed to do this.”
But the plaintiffs’ lawyer, Mr. Rickey Tarfa (SAN), urged the court to assume jurisdiction and to dismiss the defendants’ preliminary objection for being irregular and for failing to comply with the rules of the court.
After entertaining submissions from all parties, Justice Yunusa adjourned till March 25 to rule on the preliminary objections.
The plaintiffs, in their statement of claim, averred that the Oyedepo’s entered into an Investment Portfolio Management Agreement with them and appointed them as the portfolio managers to oversee and to ensure the profitability of an investment worth about N9billion in the Nigerian Stock Exchange.
The plaintiffs said that in order to enhance profitability of the investment, they went ahead to obtain some margin loans from some Nigerian banks, which turned out to be a great boost to the investment.
However trouble started when Oyedepo wanted to buy his first private jet and the World Mission Agency Inc ordered the sale of majority of the securities in the investment portfolio, and that despite the professional advice to the contrary, the plaintiffs were made to sell the securities to raise the N3billion needed for the jet, a development which brought about huge losses to the investment.
But Oyedepo’s lawyer, Okwuanyi, said that the losses recorded by the investment was due to the plaintiffs’ recklessness with the margin loan purportedly obtained by the plaintiffs.
He contended that the margin loan was neither obtained with his client’s consent nor was for the purpose of the investment.
Okwuanyi said, “The defendants vehemently protested the borrowing and rejected same. The losses occasioned to the investment of the defendants were as a result of the negligence and recklessness of the plaintiffs. It was an outright fraud,” he said.
“None of the reports submitted by the plaintiffs captured the margin borrowing because they were all in their names and not in the name or on behalf of the defendants.”