A Federal High Court in Lagos has ordered that all the court process filed before the court by a minority shareholder of Seven Energy International limited be served on the company and 13 other defendants, majority of whom are outside the jurisdiction of the court.
The minority shareholder, Saltire Investment Company, filed the petition against Seven Energy International Limited and 13 others namely, Seven Exploration & Production Limited, Accugas Limited, Savannah Energy, African Infrastructure Investment managers, Seven Uquo Gas Limited, Mr Micheal Lynch-Bell, Ani Umoren, Bassey Umoh, Chris Thomas, Ian Brown Peterside, Manish Maheshwari, Daniel Svanstrom and Mr Atul Gupta over oppressive, unfairly, and prejudicial way of running the company.
The minority shareholder, Saltire Investment Limited, is claiming special damages in the sum of $14,740,123.94.
In a petition filed before the court on behalf of Saltire Investment Limited by the law firm of Simons Cooper Partners, the petitioner who is a minority shareholder holding about 2% of the Seven Energy International Limited, alleged that he is challenging the unfairly prejudicial actions of the respondents which actions are contrary to the shareholding interest of the petitioner and other shareholders of the Seven Energy International Limited.
Despite express disapproval of the transaction by the petitioner and other shareholders of the company at shareholders meeting the 7-14 respondents – Mr Micheal Lynch-Bell, Ani Umoren, Bassey Umoh, Chris Thomas, Ian Brown Peterside, Manish Maheshwari and Daniel Svanstrom – who are the Directors and controlling minds of Seven Energy International Limited were alleged to have sold the assets of Seven Energy International Limited, Seven Exploration & Production Limited, Accugas Limited, and Seven Uquo Gas Limited to Savannah Energy and Africa Infrastructure Investment managers and the 14 respondents Mr Atul Gupta, who is the former chairman and Director of Seven Energy International Limited who were alleged to have proceeded to wrongfully procure illegal and unauthorized board resolution, as they wrongfully concluded purported negotiation on transaction which centers around the transfer of all the primary assets and cash generating businesses of the company to Savanna Energy and African Infrastructure Investment managers, companies without authorization, with even clear order of the court to cease further steps pending the determination of the suit
Sometime in 2016, under the pretext that it was facing operational funding and liquidity challenges, the company through its controlling mind, 7th – 14th respondents, commenced unauthorised negotiation with relevant stakeholders and investor on possible restructuring options available.
However, the company’s balance sheet as at September 2019 revealed that rather than protect the interest of the shareholders especially the already unfairly treated and the prejudiced minority shareholders such as the petitioner, the administration of the company has been steered towards a huge loss with the company incurring a huge deficit to the tune of,$2,092,399,624 representing a significant increase in the total liability of the company and thereby imperiling the petitioner’s shareholding value as a minority shareholder in the company.
Savanna Energy’s balance sheet also revealed that the company is not a capable counter-party to buy or restructure Seven Energy International Limited
When the unauthorized restructuring discussion commenced with Savannah Energy Company in 2017, it had less than 10 employees, with no revenue, production or reserves and only $8,400,000 in cash with outstanding exploration commitment on its assets exploration permits in Niger.
On the contrary Seven Energy International Limited owns $2,400,000,000 in assets, 2Trillion Cubic Feet of gross gas, 80,000 barrel of oil equivalent per day production and supplies to over 20 Million Nigerians with reliable gas. Despite this glaring and abject lack of capacity of the Savannah Energy to buy or restructure Seven Energy International Limited, the 7th-14th respondents willfully proceeded with the unauthorized transaction and thereby imperiled and greatly prejudiced the petitioner’s minority shareholding interest in an unfair manner
Consequently, the petitioner brings this petition on the basis of the prejudicial, oppressive, unfair, unlawful, and unauthorized manner the transaction was carried out with the attendant losses to the company prime assets, cash generating businesses, and subsidiaries which has adversely eroded the minority shareholders rights and interests of the petitioner in the company.
Consequently, the petitioner is urging the court to declare:
• That by the facts contained in the petition and the relevant sections of the Company and Allied Matters Act, the, 7th to 14th respondents acted oppressively, unfairly, prejudicially, and without authorization when the said respondents unilaterally and arbitrarily, decided to negotiate and conclude the negotiation for the unauthorized restructuring of the company.
• An order granting special damages against the Seven Energy International Limited Company and the 7th-14th respondents in the sum of$14,740,123.94 to the petitioner for the fundamental and substantial erosion of the equity and value of the petitioner’s shares.
The presiding Judge, Chuka Obiozor, has adjourned the matter till 27 of January 2021 for hearing.