Appeals judgement on Starcomm Shares

Stanbic IBTC has informed the Nigerian Stock Exchange that it is appealing the Lagos High Court judgement that ordered it to pay N4.5 billion to  a former Group Managing Director of Afribank Nigeria Plc, Patrick Olayele Akinkuotu and his company, Long Term Global Capital Limited over alleged misrepresentation of facts on Starcomm Shares.

In the filing, the bank said it has a legitimate basis for lodging the appeal.

“Stanbic IBTC affirmed its position that the bank, as Joint Issuing House with Chapel Hill Advisory Partners Limited, did not misrepresent any facts in the investor letter issued in relation to the private placement nor was such letter fraudulent.”

Justice John Tsoho of the Federal High Court, sitting in Lagos, in a ruling last week ordered the bank and Starcomm to pay Akinkuotu and his company  N4.5billion  plus interest for alleged breach of a 2008 contract

Tsoho, also ordered Stanbic IBTC and the second defendant in the case, Starcomm Plc, to pay interest of 10 per cent on the judgement sum per annum until the date of final liquidation.

The court also ordered that the 100 million units of Starcomm shares sold to the plaintiff through private placement in 2008 were improper, invalid, null and void and were thereby set aside.

The judgement of the court was sequel to a suit filed by Akinkuotu and his company against Stanbic IBTC Bank Plc and Starcomms before the court in 2012 alleging that the Stanbic IBTC deliberately misled them into buying shares of Starcom (the second defendant) by misrepresenting facts and issuing false documents.

Joined as co-plaintiffs in the suit are: Mrs. Oluyinka Akinkuotu and a limited liability company, Lakeside Mews Limited.

‪According to the claim the plaintiff filed before the court through his counsel, Chief Felix Fagbohungbe (SAN), in April, 2008, the bank through one of its officers, Akintayo Mabeweji, proposed to sell shares of Starcomms to the plaintiffs by way of private placement. Thereafter, the bank gave the plaintiffs an Investment Letter dated April 24, 2008, bearing the names of Stanbic IBTC and another company, Chapel Hill Advisory Partners Limited as Joint Issuing Houses.

The Investment Letter and the Form of Commitment were represented by the bank as the only placement documents which target prospective investors were expected to rely on before they made their unfettered independent investment decisions in respect of the placement.

Based on these documents , each of the plaintiffs was committed to purchase 25, 000, 000 units of Starcomms shares and promptly complied with the instructions of the bank.

However on July 24, 2012 the plaintiffs received two separate investigation letters from the Securities and Exchange Commission (SEC) which raised several issues in respect of the private placement and upon inquires the plaintiffs discovered that the authentic and final document prepared and submitted to the SEC by the defendants was a Private Placement Memorandum dated May 5, 2008 and not the one given to them.

Consequently,the plaintiffs averred that they were induced and misled by the representation which were deliberately made by Stanbic IBTC Bank Plc which made them apply and pay for Starcomms shares.