A Federal High Court in Lagos has dismissed the bankruptcy petition filed against Dr. Sakiru Olanipekun Oyefeso, the former Managing Director of Starco Insurance PLC.
The court also awarded a cost of N50,000 against the insurance company in favour of Dr. Oyefeso.
The insurance company had filed the petition with application for issuance of Bankruptcy notice, notice of Bankruptcy and an affidavit of truth of statement in the petition. Attached to the petition were audit report of the creditor, Starco Insurance PLC, by Ernst& Young titled “Project Valentine” dated June 2018 and a letter of demand from the solicitors of the creditor dated 30 November 2018 demanding for the payment of certain sums of money to the Insurance Company.
But on 18 November 2019, Dr. Oyefeso’s counsel, Seni Adio, a senior advocate of Nigeria, SAN, filed a counter affidavit exhibiting various documents and a written address.
In its statement of facts, Starco Insurance alleged that Dr. Oyefeso was at all time the Managing Director/Chief Executive Officer of Starco Insurance Company; that while in office he obtained unauthorized loans in the name of the company and converted same; that he illegally made certain expenditures to and on behalf of his relatives, family members and other third parties from the funds of the company.
The company further alleged that Oyefeso made some payments to himself without due authorization of the company. These were discovered in the course of the forensic audit carried out by Ernest &Young, and that despite repeated demands he has failed to pay and as at the date of filing this petition he was owing the company N575,943,276.70.
Consequently, the company urged the court to issue an order adjudging Dr. Sakiru Olanipekun Oyefeso bankrupt.
The creditor sought for the following orders:
- That all assets, interests, and his holding either held personally or through third parties and privies be liquidated and proceeds applied towards off-setting the debts particularly the sum of N575,943,276.70.
- An order divesting Dr. Oyefeso of all shares, interests and holdings in all public and private companies.
- An Order of perpetual injunction restraining Dr. Sakiru Olanipekun Oyefeso from appointment as a director in any company in Nigeria.
However, Dr. Oyefeso denied the allegations against him. He stated that he has for 25 years invested and dedicated himself to the company as the founding Managing Director and shareholder. He denied that he is indebted to the company; that all the allegations against him are false, contrived and biased.
He relied on a forensic report by the National Insurance Commission (NAICOM) conducted on the company titled “Project Xenon”.
Dr. Oyefeso said that the funds that the creditor alleged as loan were monies he personally provided to the company in order to facilitate the company’s business when required; that the supposed loans are repayments by the company to him as reimbursements; that the Project Valentine report made by Ernest & Young was based on contrived false statements and one-sided information provided by the company to Ernest & Young; that the report clearly showed that all the transactions in question were co-signed and approved by other Directors of the board of the company.
He argued that some of the alleged unauthorized payments are deferred benefits he was entitled to and subsequently approved for payment by other Directors and for which the other Directors were similarly compensated; that all the allegations were trumped up charges made against him as a conspiracy to remove him as the MD/CEO of the company at all cost.
In his submission, Oyefeso’s counsel, Mr. Seni Adio, SAN, argued that by the provision of section 1(1) of the Bankruptcy Act, the company must establish that the Company has obtained a final Judgment or order against Dr. Oyefeso in this matter or any other matter; he has not committed any act of bankruptcy and that the company has no grounds to have the alleged debtor declared bankrupt.
Consequently, Mr Adio, SAN, urged the court to dismiss the petition.
In his ruling, the presiding Judge, Nicholas Oweibo, said: “In this case, there is an allegation by the Creditor (Starco Insurance) that the Debtor, Dr. Sakiru Olanipekun Oyefeso is indebted to it in various sums. Acts of bankruptcy which will entitle a creditor to file a petition are listed out in section 1(1)(a)(I) of the Act.
“Looking at the evidence as given by the Creditor, it is not the case that the creditor has obtained any judgment or final order against the Debtor for the payment of the amount in issue. This case cannot fit into paragraphs (b)-(h) of section 1(1) of the Act.
“I am, however, of the opinion that it is not sufficient to make the allegation; there must be evidence to support same. Going by the allegations made against the Debtor, it cannot be said that the acts of the debtor would constitute a debt in the true sense.
“The picture of the activities of the debtor painted above cannot in my mind constitute a debt.
“I am not satisfied that there exists a debt or that the debtor committed acts of bankruptcy to entitle the creditor to reliefs sought. The petition is accordingly dismissed. I award cost of N50,000 in favour of the debtor.”