An aggrieved shareholder of FHN Management SPV Limited, Olukunle Babatunde, has dragged the company and two of its Directors – Obafemi Bajomo and Uchechukwugaeme Nwamara – before a Federal High Court, sitting in Lagos, over alleged unfairly treatment.
In an affidavit sworn to by Mr. Babatunde and filed before the Court by a Lagos Lawyer, Akinwumi Omisade, the deponent make oath and states as follows:
– That he is a shareholder and member of the FHN Management SPV Limited.
– That sometime in 2016 a consortium led by African Capital Alliance, ACA, including the FHN Management SPV Limited bought 70% of the shares in First Hydrocarbon Nigeria Limited, FHN.
– That the FHN Management SPV Limited’s share of the 70% shares of FHN acquired amounted to 15% of the shares in First Hydrocarbon Nigeria Limited, FHN.
– That he was allocated and acquired shareholding interest of 32,079 shares or 3.21 of FHN Management SPV Limited. This was equivalent to 700,000 shares in First Hydrocarbon Nigeria limited.
– That as part of the acquisition of the shares refered to above, he was to be responsible for his own proportion of the transaction costs and annual maintenance fees related to this acquisition of shares.
– That as part of the acquisition process, Messers Olumide Akpata and Ijeoma Uju were appointed as Trustees of his shares in the agreement that led to the acquisition of 15% of the shares in First Hydrocarbon Nigeria by the FHN Management SPV Limited.
– That ACA provided the finances for the acquisition of the shares and ACA was to be repaid its capital outlay from the dividends and other distributions from First Hydrocarbon Nigeria declared from time-to-time.
REFINANCING OF THE ACA LOAN
Mr. Babatunde avers further that Obafemi Bajomo and Uchechukwugaeme Nwamara, who are second and third defendants in this suit without his approval or consent sometime in 2021 approached Zenith Bank Plc for a loan to repay the loan provided by ACA for the acquisition of shares referred to above.
Zenith Bank Plc subsequently provided the funds to liquidate the advance from ACA.
He attended a meeting of shareholders on September 16, 2021, at which meeting, he queried some of the actions of the Obafemi Bajomo, especially the management of the affairs of the FHC Management SPV Limited, failure to hold regular statutory meetings, failure, refusal and / or neglect to provide answers (documents and information) when requested for, as well as financial transactions that appeared shrouded in secrecy.
Obafemi Bajomo, who is the Managing Director of First Hydrocarbon Nigeria and a Director of the FHN Management SPV Limited, however singled him out and chastised him after the meeting for asking questions.
CALL ON SHARES
Sometime in June 2022, there was a call on the shares of the FHN Management SPV Limited as a result of a shortfall in the servicing of the loan of USD$8,450,000 (Eight Million, Four Hundred & Fifty Thousand US Dollars) obtained from Zenith Bank. The shortfall was in the sum USD$337,499.99 (Three Hundred & Thirty-Seven Thousand Four Hundred & Ninety-Nine US Dollars & Ninety-Nine Cents).
He could not meet the call demand and consequently, forfeited the equivalent of 70,000 shares out of the 700,000 equivalent shares that he had in First Hydrocarbon Nigeria.
Sometime in July 2022, 16.66% of the shareholding interest in the company at an implied valuation of ($30,000,000.00 (Thirty Million US Dollars) were strategically sold to an investor towards raising fund or cash injection of $5,000,000 (Five Million US Dollars) for the FHN Management SPV Limited to repay Zenith Plc loan.
In August 2022, he received notification that the sum of $300,000.00 (Three Hundred US Dollars) was to be distributed as dividends but instead this was applied towards the liquidation of the debt owed to Zenith Bank Plc.
Also, there was a shortfall of about $269,907,50 (Two Hundred & Sixty-Nine Thousand, Nine Hundred & Seven US Dollars and Fifty Cents) due to Zenith Bank Plc.
As a result of the shortfall of $269,907,50 (Two Hundred & Sixty-Nine Thousand, Nine Hundred & Seven US Dollars and Fifty Cents) owed to Zenith Bank Plc, a further call on the shares of the company was made on August 7, 2022, to meet the said shortfall.
Again, he could not meet the call demand and consequently, he forfeited the equivalent of 31,500 shares of his remaining shares in First Hydrocarbon Nigeria. At this time, he had forfeited 101,500 shares out of the 700,000 shares he was holding at the outset of his acquisition of shares.
The 2nd and 3rd Defendants had indicated that this will be the final call on the shares and that any further distributions received from First Hydrocarbon Nigeria will be paid directly to the shareholders of FHN Management SPV Limited including himself.
SALE OF SHARES AND DIVIDENDS/ CASH DISTRIBUTION
Sometime in January 2023 Uchechukwugaeme Nwamara wrote to him intimating him of an impending cash distribution after the settlement of all of the FHN Management SPV Limited’s liabilities.
In the email referred to above, Uchechukwugaeme Nwamara requested for his US Dollar bank account details to enable easy transfer of the cash distribution to him.
Again, on February 2, 2023, Uchechukwugaeme Nwamara wrote to him requesting him to execute a document purporting or designed to terminate the Trust Deed executed for the set up and running of the FHN Management SPV Limited; in the same letter, he was requested to attend a Zoom meeting of the shareholders of the FHN Management SPV Limited on February 3, 2023, at 1.30pm.
At this stage, he was concerned that what the 3rd Defendant referred to as cash distribution was actually dividends and the insistence to execute the Termination of Trust Deed and Amendment Restatement Agreement.
He attended the shareholders’ meeting of February 3, 2023 at which meeting he queried the following:
– The valuation of the shares being sold that will give rise to the cash distribution and or dividends;
– Who the purchaser(s) of the shares is or are;
– The Share Purchase Agreement upon which the cash distribution and or dividends is premised; and
– How did the Defendants arrive at the amount for the cash distribution and or dividends?
– What was the rationale for him to execute the Termination of Trust Deed document.
At this stage, he was concerned that what the 3rd Defendant referred to as cash distribution was actually dividends.
PARTICULARS OF UNFAIR TREATMENT AND DISCRIMINATORY PRACTICES
Aside making requests for the information and mechanics of the projected dividends/ cash distribution from the sale of proceeds of shares of FHN Management SPV Limited, during the zoom meeting of February 3, 2023, on February 7, he instructed the law firm of AIDAN Partners to write to 2nd and 3rd Defendants to demand for information and documents pertaining to the management and running of the FHN Management SPV Limited.
He had instructed his lawyers to request for the information and documents since the 2nd and 3rd Defendants had failed, refused and or neglected to respond to him.
The Defendants failed, refused and neglected to respond to his lawyers’ requested for documents and information.
On February 10, 2023, despite the fact that the FHN Management SPV Limited had not called either a General or Extra Ordinary General Meeting, a shareholders’ meeting was called at which meeting the 3rd Defendant informed those in attendance that the shares of the company were to be sold to Ameyaa Energy at $24,750,000.00 (Twenty-Four Million, Seven Hundred & Fifty Thousand US Dollars).
At the meeting referred to above, the 3rd Defendant further confirmed that 90% of the said sum of $24,750,000.00 (Twenty-Four Million, Seven Hundred and Fifty Thousand US Dollars) had been paid and that the 2nd Defendant was not receiving his own dues in full and that the 2nd Defendant will wait to be fully paid when the unpaid 10% is paid in 2024.
The 3rd Defendant further informed the meeting that the amount to be paid out to shareholders from the proposed sale to Ameyaa Energy will be net of lawyers and consultants fees and investor’s that invested US$5,000,000 00 (Five Million US Dollars). The details of the lawyers or consultants’ fees or the amounts payable to the investor that invested USD$5,000,000 were not provided despite requests by him.
ACTIONS OPPRESSIVE PREJUDICIAL TO HIS INTEREST AND DISCRIMINATORY TO HIS INTEREST
The Defendants have indicated that there will be a cash distribution by way of dividends from the proposed sale of the shares of FHN Management company to an investor.
There has not been any general or extra ordinary meeting of the company to discuss the renumeration of the 2nd and 3rd Defendants in over 4 years.
He had made known the consequences of failing to hold the requisite meetings (general or extra ordinary meeting), but was rebuffed and called ingrate.
He verily believe that the 2nd and 3rd Defendants have not been transparent and open in their dealings in the shares of the FHN Management SPV Limited company.
The 2nd and 3rd Defendants have deliberately refused to provide him with answers to his requests as they hold majority shareholding interest in the company.
Following the meeting of February 10, 2023, the 2nd and 3rd Defendants are coercing, forcing and unfairly using their majority shareholding to force through the purported sale of shares to Ameyaa Energy.
That he believe it is discriminatory, unfair and prejudicial for the Defendants to wilfully, maliciously, deliberately refuse, reject and neglect to allow a general meeting and or extra ordinary general meeting of the company to hold.
Consequently, it will be in the interest of justice that the reliefs sought are granted.
A declaration that the failure, refusal and or neglect by the 2nd and 3rd Defendants to provide the Plaintiff with information, documentation and reports relating to the financial transactions of the 1st Defendant is oppressive and prejudicial to the Plaintiff.
A declaration that the failure, refusal and or neglect by the 2nd and 3rd Defendants to provide answers to the queries of the Plaintiff regarding the running and management of FHN Management SPV Limited is oppressive and prejudicial to him.
An order restraining the 2nd and 3rd Defendant whether by themselves or through their agents, privies and any other person acting under their authority from acting or further acting in the purported sale, transfer, assignment or charge of any of the shares of the FHN Management SPV Limited company pending the determination of this case.
However, in a notice of preliminary objection filed before the court by thier lawyer, professor Adewale Olawoyin SAN,the defendants are urging the court to strike out the suit on the ground that the plaintiff cause of action is one of unfair prejudice contrary to the provisions of the companies and Allied Matters Act 2020.
By virtue of section 354 of the companies and Allied Matters Act 2020 and Rule 4 (1) of the companies proceeding rules 1992, a claim for unfair prejudice must instituted by way of petition.
The mode of commencement of the action by Originating Summons instead of Petition is contrary to substantive and procedural laws.
The improper mode of commencement is an incurable defect and not a mere irregularity.
The presiding Judge, Peter Lifu has adjourned till 24th of October, 2023 for hearing.