Stock Firm Dragged To Court Over Fiduciary Duty

An aggrieved Nigerian businessman, Omotilewa Toyin Adediwura, a resident of the United Kingdom but desirous of investing in the stocks of the publicly quoted companies in Nigeria, has commenced legal action against First Trustees Nigeria Limited, over an alleged breach of fiduciary duty.

In a statement of claim filed before a Federal High Court by a Lagos lawyer, Adekunle Sulaiman, the plaintiff alleged that First Trustees Nigeria Limited assured him that he could monitor his accounts with it on-line for effective monitoring and personal decisions at any time.

Consequently, the relationship commenced with Mr. Omotilewa Toyin Adediwura, depositing money to the tune of N17,024,402.00. However, from the onset, he alleged that he has not been able to monitor the transaction as he was never able to access the account on-line despite several demands.

Consequently, the defendant’s management of the plaintiff’s stock has been characterised with vagrant mismanagement, negligence, misrepresentation, non disclosure of relevant facts and entitlements and at times, issues bordering on outright fraud leading to loss of both profit and capital invested, apart from outright concealment of stock entitlements.

The plaintiff further averred that he demanded without success from the defendants, proper and detailed account of all transactions involving the management of his stock, including relevant documents as well as respective registrars of the publicly quoted companies in which his money has been invested, except those of Union Bank Plc and First Bank Plc.

First Trustees was also alleged to have purchased some stocks at prices above what was quoted by the Nigerian Stock Exchange, resulting to N448,669.40 immediate cumulative loss to the plaintiff, while the company allegedly sold some stocks on behalf of the plaintiff below the Nigerian Stock Exchange officially quoted prices and 171,190 units of stocks omitted from his ownership and holding stock.

The plaintiff also alleged that certain dividends declared and issued were not credited to his account as in the case of Union Registrars’ statement, which showed that he has been issued with dividends of N200,646.90 as at 3 December, 2008, whereas only N72,281.70 was credited to his account, while there was short fall and loss of N17,814.17 in the sale of 55,000 shares of Union Bank Plc.

The bonus shares issued and rights issue with regards to the First Bank Plc stocks reflected in the First Registrars’ statement of account for the plaintiff were not reflected or shown in that with the defendant.

The plaintiff averred further that all the above mismanagement became evident in the report of a chartered accountant commissioned by him when he became concerned and uncomfortable with the way and manner his investment has been handled.

The defendant, in its letter dated 23 March, 2010, admitted lack of competence and not being able to explain the reversals in the transactions in the respective statements of account and directed the plaintiff to seek information and clarification from the respective registrars about the transactions.

Therefore, the plaintiff is claiming N9,645,348.76 being the value of various company stocks due to the him with regards to his stock under the management of the defendant; general and special damages for breach of fiduciary duty of trust imposed by law and owed to him with regard to the fiduciary special class of relationship between parties.

The presiding judge, Justice Binta Murtala-Nyako, has adjourned till 19 May, 2011 for further hearing.