Company Dragged To Court Over Failed Consideration

Ten business executives who reside at various parts of Lagos State southwest Nigeria have slammed N60 million on a fund management company Core Trust and Investment Limited, over a failed consideration.

Also joined as co-defendant is an Insurance company, Sterling Assurance Nigeria Limited.

In a statement of claim filed before the court by Dr. Wale Olawoyin on behalf of the ten plaintiffs, Olajumoke Bakare, Adebowale Adesanya, Oluwayemisi Edun, Adesoji Adeniji, Olusiji Adeyinka, Olufunmilayo Adedibu, Adam Nuru, Olulfemi Adekunle, Ayodeji Oyinlola and Adeyinka Hassan. It was alleged that sometime in February, 2008, the plaintiff were introduced to Core Trust and Investment Limited by one Ayobola Abiola for the purpose of subscription for the Sterling Assurance Nigeria Plc’s shares in a private placement memorandum regulated by the Investment and Securities Act 1999 Cap 124 laws of the Federation of Nigeria, 2004.

Subsequently, each of the plaintiffs applied for the allotment of shares in respect of Sterling Assurance Nigeria Plc private placement, whereby Core Trust and Investment Limited acted as a clearing house for the funds of the plaintiff for onward remittance to the Sterling Assurance in exchange for the shares to be issued to the plaintiff in their individual capacities by the company. In all, the plaintiffs made total payment of N58,250,000 through cheques which were paid to Core Trust and Investment company.

It was further alleged that in June, 2008 Core Trust wrote separate letters to the plaintiffs attaching a copy of a share certificate purportedly issued by Sterling Assurance Nigeria Plc and by letters informed each of the applicants that their application made in Febhruary 2008 was successful and also promised to credit the plaintiffs accounts upon dematerialization of the said share certificate and listing of the insurance company on the floor of the Nigerian Stock Exchange.

After waiting for over one year without receiving their share allotments from the insurance company, the plaintiffs instructed their solicitors to write letter to Core Trust and Investment Company expressing their doubt regarding the integrity of the entire process and demand for full refund of N58,250,000.

The plaintiffs alleged in a particulars of fraud that Sterling Assurance issued and Core Trust Company accepted a share certificate made in the name of Core Trust and Investment Limited and purported to cover the various subscriptions by the plaintiffs. There was no instruction whatsoever from the plaintiffs for the issuance of a single certificate on their behalf neither did they consent to the insurance, nor did they even have any prior notice of it.

The share certificate which purportedly evidenced the successful allotment of shares in February 2008 was in fact issued by the Sterling Assurance Limited to Core Trust and Investment in August 2007. The plaintiff through their solicitor then wrote a letter withdrawing their application for the allotment of shares.

Subsequently the plaintiffs received a letter from Nigeria Nominees Limited who are the Secretaries/Registrars to the Sterling Assurance stating that none of the plaintiffs is listed among the shareholders of the Insurance Company and that the plaintiffs did not meet the minimum subscription in the company’s private placement. Following the above admission, the defendants refused to refund the money paid for the shares.

The plaintiffs contended that there is a total failure of consideration by the defendants which entitles the plaintiffs to a full refund of their money with accrued interest or in the alternative that the failure to issue the shares in the plaintiffs individual names within a reasonable time is a repudiatory breach by the defendants.

Therefore the plaintiffs claim against the defendants jointly and severally are as follows: An order compelling the defendants to refund to the plaintiffs the sum of N58,250,000 being the total sum of the money given to Core Trust and Investment Limited by the plaintiffs for allotment of shares in Sterling Assurance Plc private placement on the ground that there is a total failure of consideration.

General damages in the sum of N5 million for the loss suffered.