Davidson Iriekpen
19 November 2008
Lagos — The suit instituted by some shareholders of Spring Bank on the acquisition bid by Platinum Habib Bank Plc (Bank PHB) was yesterday struck out by a Federal High Court in Lagos.
The shareholders had asked the court to restrain the management of Spring Bank Plc from going ahead with plans to merge with Bank PHB, pending the conclusion of its post merger adjustment.
In his ruling, presiding judge, Justice Ramat Ahmed Mohammed held that since the said shareholders brought the suit following the permission of another court, which granted them a year, the authority of the said shareholders to represent other shareholders had been extinguished.
Justice Mohammed also held that from the submissions before the court, it was obvious that the shareholders lacked the locus standi to maintain the action.
The judge noted that, the said shareholders should have gone back to the said court to renew their authorisation to represent the shareholders, at the expiration of the one year.
Justice Mohammed thereby struck out the entire suit.
The plaintiffs in the matter -- Mr. M. A. Sulaimon (on behalf of shareholders representatives of Legacy Fountain Trust Bank Plc) and Dr J.O. Ashaolu, representing shareholders of Legacy Omega Bank Plc. - had approached the court with an ex-parte application seeking to stop the defendants from any move to acquire Spring Bank.
The defendants are Central Bank of Nigeria (CBN), Security and Exchange Commission (SEC), Nigerian Stock Exchange (NSE), Spring Bank Plc and Western Technologies and Energy Services Ltd.
The plaintiffs had asked the court to stop Spring Bank from being acquired or merging with any other bank, pending when the post-merger process, which started in 2005, is concluded.
Counsel to the defendants, Mr. Olisa Agbakoba (SAN), had in a preliminary objection to the suit, prayed the court to dismiss same, contending that the time given to the plaintiffs to seek any remedy had expired, hence they had no locus standi to bring the action.
He had also argued that the merger agreement of 2005, entered into by both parties had given an aggrieved party one year to seek remedy or challenge any process, hence the plaintiffs could not come to court after a year and at the expiration of the year to ask the court to do anything.
The plaintiff's counsel, Mr. Dela Adesina (SAN), who asked the court to discountenance the contention of the defendants' counsel, had argued that the post merger adjustments started in 2004 and had not been completed due to interference of the CBN in the affairs of Spring Bank.
He had further argued that CBN, even though a regulatory body, had deliberately frustrated the post merger adjustment, by showing favour to some shareholders, against others and that the favouritism, more than any other reason delayed the post merger adjustment.
Adesina said the adjustment was a requirement of law that guides the merger and acquisition process and until the post merger adjustment was completed, Spring Bank would be in perpetual transition.
It was alleged that Bank PHB had already spent about N29.7 billion to acquire shares of Spring Bank from individuals and groups of shareholders of the bank which the plaintiffs alleged is illegal.
Part of the amounts are warehoused shares worth N8.5 billion, rejected shares by the CBN worth N13.2 billion, and Ondo State Government shares worth N8 billion.
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