Stockbroker sues Oyedepo, NSE for breach of contract

A stock brokerage firm, Valueline Securities and
Investment Limited, has instituted a legal action
against the founder of the Living Faith Church,
popularly known as Winners’ Chapel, Bishop David
Oyedepo, over alleged breach of agreement on a
N9bn worth of investment.
The firm along with its Managing Director, Samuel
Enyinnaya, are seeking an order of the court
compelling Oyedepo and others to pay them the
sum of N1.86bn jointly and severally as
professional fees and damages.
Besides Oyedepo, the other defendants in the suit
filed before a Federal High Court in Lagos are
Oyedepo’s wife, Abiola; his children and blood
relatives, Priscillia, Jesutobi, Makinde and Isaac.
Others are the World Mission Agency Inc, which is
the overall ruling organ of the Winners’ Chapel;
Covenant University, Ota, Ogun State; and the
Nigerian Stock Exchange.
The plaintiffs, in their statement of claim, averred
that Oyedepo and the other defendants entered an
Investment Portfolio Management Agreement with
them and appointed them as the portfolio
managers to oversee and to ensure the profitability
of the said investment worth about N9bn in the
Nigerian Stock Exchange.
According to the plaintiffs, it was agreed that 2.25
per cent of the net asset value of the portfolio and
an annual incentive fee of 10 per cent of the
returns on the investment would be paid to the
plaintiffs.
The plaintiffs said that in order to enhance
profitability of the investment, they went ahead to
obtain some margin loans from some Nigerian
banks, which turned out to be a great boost to the
investment.
They however said trouble started “when the first
defendant wanted to buy his first private jet and
the World Mission Agency Inc ordered the sale of
majority of the securities in the investment
portfolio, and that despite the professional advice
to the contrary, the plaintiffs were made to sell the
securities to raise the N3bn needed for the jet, a
development which brought about huge losses to
the investment.”
According to the plaintiffs, following the said sale of
securities coupled with the global economic
meltdown which caused stock market across the
globe to crash at the time, the investment recorded
losses.
But the plaintiffs said, “In a bid to avoid their
financial obligations to the plaintiffs, Oyedepo and
his organisations wrote a petition to the Economic
and Financial Crimes Commission alleging fraud
and embezzlement against the plaintiffs.”
They however said the EFCC found the them
innocent after six years of investigation but they
alleged that Oyedepo had gone ahead to use his
“religious denominational connection” to drag them
before the NSE on the grounds that the investment
portfolio was mismanaged and that the margin
loans were taken by the plaintiffs without the
consent of the first to 10th defendants.
The plaintiffs further alleged that their trial by the
NSE was conducted in a prejudicial manner, adding
that the NSE had frozen their trading accounts.
This situation, which they claimed had put them
and their business in a difficult situation, they
averred was the reason for the suit before the
Federal High Court.
Among others, the plaintiffs are praying the court
to “declare that the NSE had been conducting the
trial before it in a manner prejudicial to the
plaintiffs’ fundamental right to fair hearing.”
They also want the court presided over by Justice
Mohammed Yunusa to reverse what they described
as malicious freezing of their trading accounts by
the NSE.
Besides, the plaintiffs urged the court to compel
the NSE to pay them N61m for the closure of their
accounts and to make an order compelling the first
to 10th defendants to pay them N780m, being
their unpaid professional fees for managing their
investment portfolio.
In addition, the plaintiffs also want N1bn in
damages jointly and severally against the
defendants for the trauma and psychological
torture and loss of reputation they suffered by the
actions of the defendants as well as N25m
solicitors fees and the cost of instituting the action.
But in its preliminary objection, the NSE urged the
court to decline jurisdiction over the suit as same
ought to have been filed before the Investment and
Securities Tribunal and not at the Federal High
Court.
The NSE also argued that the plaintiffs failed to file
the mandatory pre-action notice before filing the
suit.
Yunusa has adjourned hearing in the case to
February 16, this year.