Wealthzone Limited V. Securities And Exchange Commission (2016)

LawGlobal-Hub Lead Judgment Report – COURT OF APPEAL

FREDERICK OZIAKPONO OHO, J.C.A. (Delivering the Leading Judgment)

The main issue raised in this Appeal is whether the Nigerian Investments and Securities Tribunal’s (IST) decision to entertain this suit in which the Appellant and 55 others were made Respondents for operating as ?Fund Managers? without being licensed by the Securities and Exchange Commission (SEC) and/or the Central Bank of Nigeria (CBN), is a violation of the provisions of Section 251(1)(d) of the Constitution of Federal Republic of Nigeria 1999 (As Amended), which gives exclusive jurisdiction to the Federal High Court in Civil Causes and Matters connected with or pertaining to the banking, banks and other financial institutions.

There is also the side issue whether the said suit is bad for reason of mis-joinder of causes of action and/or of parties. This suit and indeed, this Appeal is one of many others which have sign-posted some of the challenges of a private sector driven economy typified by the up-surge in the Securities and Capital Market Operations in Nigeria in recent times.

?By an Amended Originating Application dated 29-2-2008 and filed on the 7-4-2008, the Applicant

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now Respondent instituted an Action against the Appellant and 55 others as Respondents claiming one Declaratory Relief and a number of Orders as follows;

1. A DECLARATION that the 1st to 36th Respondents transactions as Funds Managers, without due registration by the Applicant as Fund Managers are illegal.
2. A DECLARATION that the deposit of money with the 1st to 36th Respondents by the public for a fixed period and bearing interest is illegal.
3. AN ORDER stopping the 1st to 37th Respondents from doing and/or from continuing to do business as Fund Managers.
4. AN ORDER stopping the 1st to 36th Respondents from receiving deposits of money from the public.
5. AN ORDER authorizing the Applicant and the 37th Respondent determine the status of the investors? funds kept in the custody of all banks and companies by the 1st to 36th Respondents.
6. AN ORDER authorizing the Applicant to take custody of the investors funds received by the 1st to 36th Respondents for the benefit of the investors.
7. AN ORDER authorizing the Applicant, as custodian of the investors funds to withdraw and release to the investors all the

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investors funds found in the possession of the 1st to 36th Respondents and such other investors funds kept by them in the 38th to 55th Respondents banks and company in every other bank and company.

8. AN ORDER of perpetual injunction restraining the 1st to 36th Respondents their servants, agents, and privies from operating and or withdrawing money from its investors accounts in all banks and companies in Nigeria.Demographics
9. THE COSTS AND EXPENSES incurred by the Applicant in this suit.

10. SUCH OTHER ORDERS OR ORDERS as this Hon Tribunal may deem fit to make.

The Originating Application was supported by a 62 paragraph ?Fact giving rise to the Applicant?s claims? and an Applicant?s witness statement on oath deposed to by one Sufianu Abdulkarim, Male, Nigerian Citizen and a Manager in the Investigation and Enforcement Department of the Applicant. Paragraphs 3 to 9 and 11 and 12 of the witness statement on oath reads;

?3. That I have the consent and authority of the Applicant to depose to this Affidavit.

4. That the Applicant is a creation of statute to wit; the Investment and Securities Act 1999, with powers

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to register and regulate investments and securities business in Nigeria and to act in the public interest having regards to the protection of investors and the maintenance of fair and orderly investment climate in Nigeria with its Head Office situate as Plot 272/273, Central Business District, Abuja.

5. That the 1st, 4th, to 22nd to 35th and 37th Respondents are Limited Liability Companies incorporated under the Laws of the Federal Republic of Nigeria and having their Head Offices in Nigeria.
6. That the 38th Respondent is a creation of statute and has the power, amongst several other powers to promote and maintain adequate and reasonable banking services for the public, to ensure high standards of conduct and management throughout the banking system; and to further such other policies not inconsistent with the Act creating it as shall be in the National interest with Head Office at Central Business District, Abuja FCT.