The Investments and Securities Tribunal, IST, delivered judgment on 26/11/2012 in respect of an originating application filed by the Securities and Exchange Commission, SEC, in which certain reliefs were sought against Union Bank of Nigeria Plc-UBN, B. Ebong, S. Ayininuola, A. Obigwe, K. Adeyemi, A. Abdullahi, E. Emeruem, W. Mbah, A. Esangbedo, M. Yakubu, A. Abubakar, M. Ahmed, J. Akinyele, E. Edozien, I. Gobir, F. Odimegwu, O. Olusanya, C. Udofot, L. Idowu and E. Odikanekwu.

The Respondents were alleged to have engaged and/or participated in a scheme and or artifice enabling UBN to either directly or indirectly fund the purchase of its shares and thereby retaining the beneficial ownership of the shares as well as creating a false and misleading appearance of active trading of Union Bank securities and or shares.

Third Respondent filed a Notice of Preliminary Objection challenging the jurisdiction of the Tribunal to entertain the matter. Submissions were that 3rd Respondent was only a director and not a registered capital market operator as contemplated under Sections 38 and 315 of ISA 2007 and hence 3rd Respondent fell outside the scope of parties indicated in Section 284 of the Act.

However, the Tribunal in assuming jurisdiction found that the 3rd Respondent is a market participant as defined in Section 315 of the Act and that the Applicant is mandated by Section 13 of the Act to take action against violation and possible violations of the Act.

At the trial, the Applicant had one witness. The 4th, 14th and 20th Respondents each testified for himself/herself while the 19th Respondent testified for himself and the 1st, 10th – 13th, 15th – 18th Respondents. Applicant’s witness tendered several exhibits including exhibits AW2J and AW2K covering board resolutions on procurement of loans of $150million and N12billion from Merrill Lynch and HSBC Bank Plc respectively as well as exhibits AW2M and AW2S covering Assets Management Agreements made in 2007 and 209 respectively between Union Trustees Ltd and Falcon Securities Ltd.

4th Respondent stated amongst other things that deposits from Merrill Lynch and HSBC were to improve 1st Respondent’s liquidity and that he was not aware at the material time of the facility granted Union Trustees and Falcon Securities.

14th Respondent stated amongst other things that the alleged scheme never formed the subject matter of any Board deliberation. 20th Respondent testified amongst other things that as Company Secretary/Legal Adviser, she executed board resolutions for the transactions with Merrill Lynch and HSBC but that the resolutions were not presented to the entire Board of the 1st Respondent.

19th Respondent testified amongst other things that none of the parties he was giving evidence for was involved in the alleged transactions and that apart from 1st Respondent, the others were non-executive directors who were not involved in day-to-day running of the 1st Respondent’s business.

Arguments exchanged amongst the parties included whether the 5th – 9th and 14th Respondents were deemed to have admitted the claim against them once they failed to adopt their witness statements. Also whether the 1st, 10th – 13th and 15th – 19th Respondents acted to conceive an artifice, device or scheme, and/or refrained from acting to restrain the action that culminated in 1st Respondent purchasing its own shares and whether the written statement of the 19th Respondent is competent as it relates to the 10th – 13th and 15th – 18th Respondents. 10th – 13th and 15th – 19th Respondents maintained that they were not liable for any act purportedly done by other persons within the 1st Respondent without their knowledge and/or consent.

The 7th Respondent indicated that he was not liable for the alleged breaches while the 8th Respondent indicated that the Applicant did not plead any material facts in its pleadings requiring his response. The 4th Respondent argued that he could not be held vicariously liable for the activities or actions of the 1st Respondent.

The 20th Respondent maintained that she did not come under the provisions of Section 305 subsection 3b of the Act and hence she had no liabilities in respect of the credit facilities. The 14th Respondent argued that he should not be held liable for the alleged infractions which according to him commenced on 13 November 2007, two days before he retired from the Board of the 1st Respondent.

The Applicant replied to the submissions of the Respondents and the Tribunal subsequently entered its decision.

….TO BE CONCLUDED