Securities and Exchange Commission V. Osindero Oni & Lasebikan (2008)

LawGlobal-Hub Lead Judgment Report

JIMI OLUKAYODE BADA, J.C.A.

This is an appeal from the Judgment of the Federal High Court, Abuja, in Suit No:FHC/ABJ/270/2003 – OSINDERO ONI & LASEBIKAN VS. SECURITIES AND EXCHANGE COMMISSION delivered on the 2nd day of April, 2004.

Briefly, the facts of the case are that in the year 2000, the National Council on Privatization set up by the Federal Government offered for sale to the public 86,400,000 Ordinary Shares of African Petroleum (AP PLC) held on behalf of the Federal Government of Nigeria by the Nigerian National Petroleum Corporation (NNPC). A year after, Sadiq Petroleum Nig. Ltd, the core investor in the offer alleged that the past management of African Petroleum PLC had not disclosed huge debts owed to creditors to the tune of N22.5 billion which debts were said to have been owed to NNPC, some banks and other financial institutions.

The core investor, Sadiq Petroleum Nig. Ltd alleged that the said indebtedness was not disclosed in the prospectus used for the privatization of the Federal Government’s Shares in AP LTD. The prospectus which contained the financial statements of the AP PLC was based, among other things, on the audit reports submitted by the Respondent as the external auditors to AP Plc.

As a result of the above allegations, the Appellant in exercise of its regulatory functions set up a committee to conduct preliminary investigation into the allegation levelled against the Respondent by Sadiq Petroleum PLC that the Respondent was negligent in the audit of the books of account of the AP PLC. The committee in its report indicted the Respondent and found inter alia that:-

“there was obvious lack of depth in the auditing of the company’s book and affairs by the firm of Osindero Oni & Lasebikan i.e. the Respondent.”

The Respondent was later served with an Application No: APC/22/2002 wherein the Appellant summoned the Respondent to appear before its Administrative Proceedings Committee to explain why disciplinary action should not be taken against it for its role in the transaction in issue.

The Respondent proceeded to Lower Court seeking “an Order of Prohibition, prohibiting the Administrative Proceedings Committee of the Appellant from hearing any evidence, adjudicating and/or entertaining the Application No: APC/22/2002 in so far as it relates to the Respondent and pending before the Appellant”.

The Learned Trial Judge after the oral argument of both counsel gave judgment in favour of the Respondent.

The Appellants dissatisfied with the said judgment now appealed to this Court.

The learned Senior Counsel for the Appellants formulated two issues for determination as follows:-

“i. In the face of the express denials in the Appellant’s Counter Affidavit, were there some other materials before the lower Court to support the Court findings-

(a) That the APC as constituted by the Appellant was conducting or intending to conduct a criminal trial of the Respondent; and

(b)That the Appellant, through the APC, was constituting itself into a complainant/accuser, prosecutor, and judge in the proceedings, the subject matter of this Appeal?