A Federal High Court in Lagos on Monday quashed the Share Purchase
Agreement (SPA) which transferred ownership of Newswatch
Communications Ltd to a businessman, Mr Jimoh Ibrahim.
Two minority shareholders -- Mr Nuhu Aruwa and Prof. Jubril Aminu -- had
filed a petition, urging the court to nullify the agreement which
transferred ownership of the company to Ibrahim.
The applicants also sought an order restraining the respondents from
publishing and selling to the public, Newswatch daily and weekend
magazines.
Respondents in the suit are Newswatch Communications Ltd, Global Media
Mirror Ltd, Mr Jimoh Ibrahim, Newswatch Newspapers and the Corporate
Affairs Commission.
Delivering judgment in the suit on Monday, Justice Ibrahim Buba upheld
all the prayers of the minority shareholders.
The judge also awarded the sum of N15.7 million as damages against
Ibrahim and also gave an order stopping further publications of
Newswatch Daily.
Buba held that the respondents could not prove that they paid up for
the shares as the petitioners gave evidence to show that the second to
the third respondents totally failed to pay for the shares of the
company.
Buba said:"They have not showed how and when they paid for the said
shares, and nothing in paragraphs11 and 18a of the respondents'
statement of defence shows how they paid for the shares.
"There is no evidence in paragraph 3 that the respondents paid on or
before May 5, 2011 as stated, as they have only given their
interpretation to that paragraph.
"Whatever monies they spent was spent on Daily Mirror and this was
confirmed by DW2 during cross-examination.
"The N510 million was supposed to be paid for shares and not for any
other purpose; there is no evidence to show that the shares have been
paid for.
"Besides, it was a company called Global Fleet that paid the N14
million, not any of the respondents who contracted with the first
respondent".
The judge, therefore, held that the case of the petitioners had merits
and so granted all the reliefs sought.
"The court grants all the reliefs as set out on the petition at the
inception of this case.
"An order setting aside the contract entered into between the first
and second respondents' companies by virtue of document titled "Share
Purchase Agreement", between the first and second respondents executed
in May 2011.
"A consequential order setting aside the Form CAC2 ( Statement of
Share Capital and Return of Allotment of Shares) of the 1st respondent
company dated Aug. 27, 2012, and presented for filing by one Gloria A.
Ukeje.
"An order directing the 2nd and 3rd respondents jointly and severally
to pay special damages in the sum of N15.7 million to the first
respondent company being loss of business profits since August 2012
till October 2012 when its operations were unilaterally shut down,"
the court held.
The court also held that the petitioners had discharged the burden
placed on them by proving their case, while the first to fourth
respondents failed woefully to discharge the burden placed on them.
The petitioners had averred that the 2nd and 3rd respondents
purportedly came into
majority ownership of the Newswatch Communications by virtue of a
Share Purchase Agreement entered into in May 2011.
They averred that by virtue of clause 3 of the said agreement, the 2nd
respondents purportedly acquired 51 percent of the company on the
condition that they paid the sum of N510 million as price of its
shares.
They added that by clause 4 of the agreement, the money was to be paid
on or before May 5, 2011, and that the 2nd respondent was obligated to
pay additional N500 million within 90 days after takeover.
The amount was supposed to serve as working capital for the company.
The petitioners averred that without complying fully with the
aforementioned conditions of agreement, the 2nd respondent through the
instrumentality of the 3rd respondent, went ahead and took over full
control and management of the first respondent's company.
Consequently, they filed the action, seeking to quash the takeover.
(NAN)
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