FHC Declares Attempted Takeover of EkoCORP A Criminal Act, Orders AGM


Monday, July 23, 2018   04.32PM  /  By Ayodeji Ake of Thisday         

The Federal High Court sitting in
Lagos, presided over by Honourable Justice CMA Olatoregun on Monday the 7th of May, 2018 declared in its judgment, that the attempted takeover of Ekocorp Plc by Messrs Geoff Ohen. Ltd, through the alleged acquisition of more than 30% of the company without a formal takeover bid was unlawful and illegal. 

Hon. Justice Olatoregun in her Judgement stated that the evidence before the court is in support of the fact that 1st Respondent, Geoff Ohen Ltd and 2nd Respondent, Dr Geoffrey Ohen having failed to comply with the provisions of section 134 (1) and (2) of the Investment and Securities Act (ISA) are liable to be punished as provided under Sections 137 of the Investment and Securities Act 2007.

In summary section 137 (1) of ISA, states that a corporation or an individual should not make a takeover bid except it has been approved by a board resolution and section 137 (2) indicates that noncompliance would amount to an offence with the offending parties liable to a a fine of N100, 000 or imprisonment or both and this was the position taken by the court in respect of the purported takeover by Geoff Ohen Ltd and Geoffrey Ohen.

Proshare Nigeria Pvt. Ltd. 
Source: Bloomberg, July 23, 2018 5 Year Chart


The court, on the question of whether Geof Ohen Ltd and Dr Geoffrey Ohen violated any law or regulation in acquiring the 110 million shares and the shares from GTB and Security Swap Ltd; declared that Geof Ohen Ltd and Dr Geoffrey Ohen failed and or refused to disclose their shareholding standing in Ekocorp when the issue of the private placement was discussed by the board and that they also failed to obtain shareholders’ approval at the Annual General Meeting before the SEC approval for the private placement was sought and obtained. 

The Court therefore concluded that the SEC was misled by a false resolution in approving the scheme. It stated that there is no evidence that Regulations 89, 90(i), (ii) and (iv) of the Securities and Exchange Commission rules and Regulations were complied with as such “the basis upon which SEC granted its approval is non-existent. The approval must fail. Same is set aside “

The court asserted that Geoff Ohen Ltd and Dr Geoffrey Ohen the first and second Respondents deliberately refused to make a takeover bid in contravention of the provisions of the Investment and Securities Act, and the absence of any evidence of a takeover bid by the 1st and 2nd Respondent in line with section 131 of ISA, the acquisition is declared illegal ab initio. 

On the conversion of debt owed by Ekocorps to the Founding Directors namely, Dr Alexander Eneli, Dr Sunday Kuku, and Late Dr Augustine Obiora to equity, the court stated that from the evidence it is clear that EKOCORP was indebted to them and that Dr. Geofferey Ohen did not protest at the Board meeting where it was agreed that 75% of the debt be converted to equity while 25% of the debt be paid to them in cash as seen from the adopted minutes of meeting. 

The Court in approving the prayer of the Founding Directors (Petitioners) and in a bid to regularize the operations of EKOCORP PLC ordered that an Annual General Meeting be held within 60 days from the date of judgment for the approval of (I) the Debt Equity Swap; and (II) the Special Private Placement. As it conclusively held that “I am satisfied that the equitable way to go is for parties to go back to an Annual General Meeting and seek approval for the special placement as well as the debt equity swap”. 

The judgement of the High court has once again shown the resolve of the judiciary to secure entrepreneural efforts of hard working citizens of the country and to discourage hostile takeovers outside due process.

The Court Judgment

Proshare Nigeria Pvt. Ltd.


Visit EkoCorp Plc IR Page via @TheAnalystNG

 Proshare Nigeria Pvt. Ltd.


Related Links to Case

1.       Court Declares Attempted Takeover of Eko Hospital a Criminal Act ... Thisday Jul 4, 2018

2.      #CorporateStories: Eko Hospital and the 'Barbarians' at its gate ... Nairametrics Sept 16, 2017

3.      Lagos' Eko Hospital battles for own life as founders engage in fierce ... Premium Times Mar 22, 2014


 Proshare Nigeria Pvt. Ltd.


Related News

1.       Ekocorp Plc Postpones Its EGM Earlier Slated for Thursday, 5 July 2018

2.      Why These Listed Companies Have Delayed Filing Results As At March 31, 2018

3.      EKOCORP Plc Announces delay in filing FY 2017 financial Statements

4.      EKOCORP Declares N1.21bn Loss in 2017 Audited Results,(SP:N3.37k)

5.      EKOCORP Declares N79.60mln PAT in '16 Audited Results,(SP:N3.37k)

6.      The $680m July 6, 2018 Judgment by The London Court of International Arbitration (LCIA) London

7.      LCIA Gives Judgment For Ansbury, Orders OODP and Whitmore To Pay $680m

8.     Oando Plc Sets the Record Straight Regarding the LCIA’s Ruling on Whitmore, OODP BVI and Ansbury

9.      VBS Saga Ruffles PIC Feathers: Executive Head, Legal Jumps Ship, Appoints Forensic Investigator

10.  Largest Award Issued In Commodity Fraud Case; Trading Firm Charged $3.4m For Attempted Manipulation

11.   Buhari Signs Law Separating NFIU from EFCC

12.  HKSFC Reprimands And Fines Citigroup Global Markets Asia $4m For Alternative Liquidity Pool Failures

13.  Unconstitutional, Null And Void - Legal Opinion On Preservation Of Suspicious Assets Order

14.  Supreme Court Upholds Appeal, Drops All CCT Charges Leveled Against Saraki

15.   Morgan Stanley Pays $3.6m SEC Fines For Failure To Detect Or Prevent Misappropriation Of Client Fund

16.  134,663 Crime Cases Were Reported in 2017 - NBS

17.   National Human Rights Commission Begins Audit of Police Detention Cells In Nigeria 

Related News