SEC suspends Guinness Nigeria’s N40bn Right Issue over Pharma Deko’s N175m debt

As Pharma-Deko wants Guinness’ Chairman, CEO jailed

Pharma-Deko Plc, has  informed a Federal High Court, sitting in Lagos, that it has filed an application seeking to commit to Prison two management staff of Guinness Nigeria Plc, for violating the law as stipulated under the Company And Alied Matter Act, CAMA.
The commital to prison proceeding arose in the course of a windinding up petition instituted against Guiness Nigeria Plc over a debt of   N175, 699, 317.99 million.

It would be recalled that Pharma-Deko Plc, in its winding-up petition marked FHC/L/CP/69/2017, had approached the court seeking winding-up of Guiness Nigeria Plc, over the said debt.

At the resumed hearing of the winding-up petition today, counsel to Pharma-Deko Plc, Chief (Mrs) A. Williams Akinjide (SAN), told the court that her client has filed  two applications in relation to the matter.

The first motion dated March 30, 2017, according to Chief Akinjide (SAN), is seeking to commit to prison two top officers of Guiness Nigeria Plc, namely: Mr. Babatunde Abayomi Savage, and Mr, Peter Ndegwa, both the Chairman and Managing Director/Chief Executive Officer of Guiness Nigeria Plc respectively.

While the second Motion dated March 21, 2017, according to the senior lawyer, is seeking an order restraining Guinness Nigeria Plc, it’s directors, staff, agents and privies from  making any application to Nigerian Stock Exchange Commission (SEC), in respect of Guiness Nigeria Plc’s stocks and shares or dealing in any of its assets.

In urging the court to grant the two applications, Chief Akinjide (SAN),  said the respondents have violated  sections 413 and 415 of the  Company and Allied Matters Act (CAMA), which enjoyed them to seek the leave of the court before they can  deal in their accounts, shares, and issuing of right issues, once a winding-up petition have been filed against their company

She particularly stated that section 415 of CAMA made it clear that the winding-up petition stands once the petition is filed.

However, counsel to Guinness Nigeria Plc, Mr. M. Mordi, in response to the petitioner’s application, said he had filed an application challenging the court’s jurisdiction in entertaining the petition on the ground that  the alleged debt was status bar, having been over eight years.

Mordi said his client’s application dated January 23, 2017, is also seeking for stay of commital proceedings against his client pending when the jurisdiction issue is resolved.

The lawyer particularly stated that as a result of the petition, the Security and Exchange Commission, SEC, has written to the company to put on hold its proposed  N40 billion right issues.

He also informed the court that they have kept the draft of  N175 million which the petitioner is demanding for with the court’s Deputy Chief Registrar (DCR) pending when the matter is concluded and that there is nothing to fear by the plaintiff.
However, responding to Guinness’ submission, Chief Akinjide (SAN), said that the respondents’ submission manifested that they don’t have regards to the Provisions of CAMA.
The presiding judge, Justice Hadizat Rabiu-Shagari, has adjourned till Monday April 10, 2017, for hearing of all pending applications.

In the winding-up petition filed by Chief (Mrs) Williams Akinjide (SAN), on behalf of Pharma-Deko Plc, is urging the court to Wind-up Guinness Nigeria Plc, due to inability to pay an undisputed contractual debt of N175, 699, 317.99 million. 8

Pharma-Deko is also urging the court to appoint an official Receiver, as a provisional liquidator.

The petitioner also stated that it’s request to Wind-up the respondent was pursuant to the Provision of the Companies and Allied Matters Act Cap. C20, Laws of the Federation of Nigeria, 2004.

The petitioner in an affidavit of verifying winding-up petition deposed to by its production manager, Olukayode Isola, averred that it entered into a canning contractual with the Guinness Nigeria Plc, and as a result of breach of contract by the Guinness Nigeria Plc, an arbitration proceedings was conducted in accordance with the contract on the basis of which an award was made on July 1, 2016.

It also stated that Guinness Nigeria Plc participated in the proceedings fully and received the award at the same time it received it. Adding that by the award referred to, Guinness Nigeria Plc is contractually indebted to it in the sum of N175, 699, 317.99.

It stated further that all efforts since July 1, 2016, to get the contractual debt paid have been ignored/refused by the Guinness Nigeria Plc, despite writing and forwarding several demand notices in pursuant to statutory laws.

In response to the winding-up proceedings, Guinness Nigeria Plc, urged the court to strike out the suit in its entirety for want of jurisdiction.

Guinness Nigeria Plc in its affidavit in support of the Motion for striking out of the suit deposed to by Rotimi Odusola, the company’s legal director and Company’s Secretary, stated that by the notice of Arbitration dated February 10, 2010, Pharma-Deko Plc instituted an arbitration against Guinness Nigeria Plc, alleging a breach of contract and unlawful termination of contract canning agreement dated July 2006.

It aveered that upon the conclusion of the the Arbitration, the sole arbitrator, published a final award on July 1, 2016, of the sum of N195, 167, 986. 87, which was subsequently corrected and republished on August 1, 2016, in favour of Pharma-Deko Plc.

It however stated that upon the counter-claim filed by the Pharma-deko Plc, the Arbitrator awarded the sum of N21, 222, 421.43, to Guinness Nigeria Plc, thereby leaving a balance of N175, 699, 317. 99.

It further stated that Pharma-Deko Plc only presented the winding-up proceedings under the guise or pretext that Guinness Nigeria Plc, is insolvent. Adding that winding-up proceedings is not the proper mode of enforcing an arbitral award as set out in the law regulating Arbitration proceedings in Nigeria.

It also stated that the award is statue barred and unenforceable in law.

Consequently Guinness Nigeria Plc urged court to strike out Pharma-Deko Plc’s winding-up petition for want of jurisdiction.

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