December 4, 2015

Will an agency defy Buhari on judicial corruption?

APPARENTLY miffed by the delay in the dispensation of justice and the corruption that it breeds, President Muhammadu Buhari recently made a case for far-reaching reforms in the country’s judicial system. Such reforms must include the reviews of laws, institutions, processes and procedures that hamper the speedy delivery of justice.

Speaking during the opening session of the All Nigeria Judges Conference in Abuja, the President lamented that Nigeria was fast losing trust and esteem in the eyes of the citizens due to unnecessary delay tactics employed by lawyers, in collusion with some judges, to stall trials, especially high profile corruption cases.

In addition, the President frowned at the unwholesome practice of appealing interlocutory decisions, a practice, he said, encourages unending litigations and miscarriage of justice.

Without making the appropriate reforms, it would be difficult for government to effectively tackle corruption and attract the desired level of investments the country needs for socio-economic development, President Buhari stated.

The President’s admonition readily brings to mind the Financial Reporting Council of Nigeria, FRCN, an agency under the supervision of the Federal Ministry of Industry, Trade and Investment. The body, which has recently come under heavy scrutiny for unsavoury reasons, is currently challenging, via an interlocutory appeal, the orders of the Federal High Court in Lagos which barred it from interfering in the business or operations of Stanbic IBTC Bank pending the outcome of the suit filed at the Federal High Court by the bank. It is strongly believed that FRCN’s action would potentially prolong the process; keeping stakeholders on edge for as long as the litigation lasts.

FRCN had on October 26 announced the outcome of its investigation of Stanbic IBTC for alleged infractions claimed by minority shareholders of the company, fronting as the Trusted Shareholders Association of Nigeria, TSAN.

According to FRCN, there were discrepancies in Stanbic IBTC’s financial statements and general financial reporting for 2013 and 2014. Among sanctions announced by FRCN was a fine of N1 billion on Stanbic IBTC and restatement of the financial reports for 2013 and 2014. As it turned out, FRCN acted without fair hearing from Stanbic IBTC or even consulted the Central Bank of Nigeria, CBN even when the rules and regulations stipulated that FRCN can only sue Stanbic IBTC if the latter disagrees with its interpretations. FRCN clearly lacks the legal powers to impose a penalty on Stanbic IBTC.

Nonetheless, Stanbic IBTC denounced what it described as inaccurate allegations against it and the manner FRCN chose to make them was procedurally defective.

Subsequently, Stanbic IBTC challenged FRCN’s action in court, resulting in Justice Ibrahim Buba of a Federal High Court in Lagos asking FRCN to stay action pending the final determination of a suit against the agency by Stanbic IBTC Holdings.

Also, the Central Bank of Nigeria, in a report personally signed by its Governor, Godwin Emefiele, punctuated practically every argument advanced by FRCN. In rejecting a request by FRCN to sanction Stanbic IBTC, CBN said it does not see enough grounds to advise or compel Stanbic IBTC to re-issue the statements or comply with the sanctions meted by FRCN. The apex bank said FRCN failed to consult it throughout the process of its investigation, noting that the pronouncements by the FRCN on Stanbic IBTC was not only capable of eroding investor confidence, but also very inimical to financial system stability. Not satisfied, FRCN fired a response to CBN in which its Executive Secretary, Jim Obazee, revealed details of meetings with the Chief of Staff to the President. The primary objectives of the FRCN, just in case its Executive Secretary has chosen to ignore them, are well spelt-out. These include protecting the investor and stakeholder interest, giving guidance on issues relating to financial reporting and corporate governance, ensure good corporate governance practices, ensuring accuracy and reliability of financial reports and harmonizing activities of relevant professional and regulatory bodies.

Imposing fines and arbitrary sanctions are outside the remit of FRCN; only the law courts are empowered to do so. What makes its current moves very unacceptable is the FRCN’s seeming disregard of the President’s counsel by choosing to pursue interlocutory appeals rather than to wait for the speedy determination of the real issues that are the subject matter of the suit, as promised by Justice Buba. And whose interest does FRCN seek to serve by attempting to destroy an institution that employs thousands of Nigeria and is often cited as a symbol of corporate governance?

As the current administration continues in its efforts to steer the country to safer ground, the least it expects are distractions, moreso from an agency of government, after well-intentioned interventions to calm frayed nerves and restore an ideal environment for businesses to thrive as well as attract the much needed inflow of FDI into the country.

Mr Akeem Ogunlade, an economic analyst, wrote from Abuja