The suit by three minority shareholders in Gaslink Nigeria Plc who filed a petition before a Federal High Court in Lagos against Wale Tinubu and others, claiming that their rights in the board of the company have been restricted will be determined by a Federal High Court in Lagos on January 30, 2015.
Atlantic Ocean Services Limited, Owel Petroleum Limited and Patriot Investment Limited, minority shareholders (petitioners) of Gaslink Nigeria Limited, filed the petition against the firm and its six directors over restriction of their rights to nominate or appoint directors.
The respondents are Gaslink Nigeria Limited, Jubril Adewale Tinubu (major shareholder of Gaslink Nigeria Limited and Oando Plc), Mobolaji Adeyemo, Omamofe Boyo, Tunji Ladoja, Ifeanyichukwu Ochonogor and Oando Plc.
On the said date, the trial judge, Justice Mohammed Yunusa, will rule on whether the six directors (respondents) would respond to the petition filed against them by the petitioners or have their names struck out from the petition.
Earlier, the respondents had filed a preliminary objection to the petition and asked the court to strike out their names from the suit.
Arguing on the preliminary objection seeking to strike out the names of the directors, counsel to the 2nd to 7th respondents, urged the court to strike out their names from the petition. He argued that their names ought to be struck out from the suit because they are ‘merely’ directors and not shareholders of the 1st defendant (Gaslink). He canvassed that it is only the company that can be sued.
Aligning with him, counsel to Oando, Oluyele Delano (SAN), argued that the directors under the law are only agents of the company and cannot be sued, submitting that it is only the company which can be sued.
Replying to the arguments of the respondents, the petitioners’ counsel, Anthony Idigbe (SAN), stated that all the respondents’ argument against his petition is ‘useless’. He urged the court to look at the petition and all the exhibits, submitting that while his clients are not disputing the fact that the 2nd to 7th respondents are directors, they are the people who run the affairs of the company and therefore should be sued. He maintained that the directors committed so many infractions which undermined the interest of his clients, such as using the name of Gaslink to obtain loan for sister companies.
“We urge the court to hold that there is challenge to the management of the first respondent and the 2nd to 7th respondents are in charge of management of the company. We urge the court to dismiss the preliminary objection,” Idigbe prayed.
After listening to arguments of parties, the trial judge adjourned the matter till January 30 for ruling.
In the petition, Atlantic Oceanic Services Limited and the other two plaintiffs claimed that at an annual general meeting (AGM) of Gaslink held on April 20, 2006, a special resolution was passed by the majority restricting the right of holders of less than 10 per cent of the share capital of the company to nominate or appoint directors.
The petitioners averred that they are founding members and holders of about three per cent of the shares of the company, while Oando (8th respondent) holds the majority shares of Gaslink.
“By the special resolution, the majority shareholders surreptitiously removed the powers of the petitioners from appointing or nominating directors to the board of the company, thereby completely extinguishing the pre-existing right and legitimate expectation of the petitioners to participate in the management of the company,” the plaintiffs stated.
They claimed that as a result of their ouster in the management of Gaslink, 2nd to 7th respondents who are connected to the 8th respondent have taken and is still taking oppressive, unfair and prejudicial actions against the petitioners’ interest.
The petitioners cited a case alleging that Gaslink shareholders’ funds and resources were utilised for the benefit of the subsidiaries of Oando like East Horizon Gas Company Limited (EHGC).
According to the petitioner, “The 1st respondent’s shareholders’ funds are being treated as part and parcel of the finances of Oando and its subsidiaries. The 1st to 7th respondents in breach of the Articles, obtained a loan facility to the tune of N3 billion in the name of Gaslink and diverted the said facility amount to a subsidiary of Oando, East Horizon Gas Company; yet the interest and other charges on the loan facility were paid out of Gaslink shareholders’ funds.”
Among other numerous allegations bordering on sharp practices, the petitioners affirmed that the respondents by their actions have deprived them of reasonable returns on their investment in Gaslink.
Consequently, they prayed the court to order that their right of representation in Gaslink’s board of directors be restored and that at least three board seats be reserved for them.
Further, they prayed for an order for the refund of the N3 billion and rendering of proper accounts to the petitioners of all benefits so derived by Oando, including the $250 million proceeds of sale of East Horizon Gas, as well as Oando repaying N12 billion loan and all debts and receivables together with accrued interest owed to Gaslink. They also want to be paid their share of any profit made on such monies, among other prayers.
The petitioners supported their position with an affidavit.
In its response, Oando denied that Gaslink funds are being treated as part and parcel of its finances and subsidiaries.
“The 8th respondent avers that all the businesses of the subsidiary companies of the Oando, including Gaslink, are carried out according to the provisions of the law and principles of good corporate governance,” it stated.
It also denied advancing loan of N12 billion of Gaslink’s shareholders funds to Oando and funding of its projects. According to Oando’s averment, “The 8th respondent denies the allegations in paragraph 12(p) and (q) and states that the 8th respondent never loaned N12 billion or any such money to the 1st respondent to pay dividends to the 1st respondent’s shareholders and did not receive any sum as dividend from the alleged loan.”
Having denied most of the claims, the firm urged the court to dismiss the petition with substantial costs, as it described the petition as vexatious, frivolous and gold-digging exercise.
The firm also filed a 21-paragraph counter-affidavit.
In the same vein, 1st to 7th respondents denied most of the allegations in the petition and filed a counter-affidavit to that effect. They also filed a preliminary objection saying the petition is incompetent and discloses no reasonable cause of action. Besides, they are challenging the jurisdiction of the court to entertain the action. It is also supported by an affidavit and a written address.