14th July, 2011
A Federal High Court sitting in Lagos has dismissed a suit instituted by four none directors against Acorn Petroleum Plc, its chairman, Mr. Doyin Adeyinka and ten others.
The four directors, Lt.-General Mohammed Wushishi (rtd), Omooba A.O Odumayo, Olufemi Adebunmi and Tunji Ladoja, in their petition, alleged that the affairs of Acorn Petroleum Plc are being conducted in an illegal and oppressive manner and that they were seeking relief from such conduct.
The petitioners also complained about the non-repayment by the chairman of the company of an outstanding debt of N1,320,003.90 allegedly owed the company and that they knew nothing about details of transactions entered into by the company with Afribank Plc, which they claimed resulted in exposing the bank.
The directors claimed that they were disturbed by this development and consequently demanded for management’s explanation and the account presented showed a loss of about N220 million for the period between 1 July and 30 September, 2009.
The applicants supported their verifying affidavit to the petition with 12 documents, while the defendants, Acorn Petroleum, Fortis Construction, Albuic Investments, Shoreline Power Company, Shugaba Resources, Jamal Communications, Adetunji Olatunde, Adekanmi Olusegun, Adebimpe Olusegun, Kolapo Lawson and Doyin Adeyinka, urged the court to dismiss the petition for incompetence on the following grounds:
•Failure of the petitioners to supply prima facie evidence of any illegal, oppressive or unfairly prejudicial conduct by the respondents or any of them against the petitioners
•The suit offends the rule of the majority prescribed by Section 299 of the Companies and Allied Matters Act
•That the principal remedy sought by the petitioners is to reverse the express power of the general meeting contrary to Section 38 (d) of the Article of Association of the company
•That the petition contained unfounded, speculative and unsubstantiated allegations against them.
They therefore filed a 77-paragraph affidavit in support of their motion sworn to by the company’s secretary.
In his ruling, the presiding judge, Justice Charles Archibong, dismissed the petition, describing it as premature and misconceived.
He said much of the documentations exhibited were out of date, uncertified or incomplete, particularly as fraud needed to be established, adding, “I find it strange that the petitioners do not welcome the focus and attention of extra ordinary general meeting on the problems and issues they have portrayed in this petition. At best, this petition is premature. The organs of a company should be allowed to function, power lies where power lies and it is when the extra ordinary general meeting fails to act to prevent oppressive behaviour of the director of a company that remedies in court could be sought.â€