TheCable

A federal high court in Lagos has quashed the Share Purchase Agreement (SPA) that transferred ownership of Newswatch Communications Limited to businessman Jimoh Ibrahim.

Nuhu Aruwa and Jubril Aminu – two minority shareholders – had filed a petition urging the court to nullify the agreement.

The applicants also sought an order restraining the respondents from publishing and selling to the public, Newswatch daily and weekend newspapers.

Respondents in the suit were Newswatch Communications Limited, Global Media Mirror Limited, Jimoh Ibrahim, Newswatch Newspapers and the Corporate Affairs Commission (CAC).

Delivering judgment on Monday, Justice Ibrahim Buba upheld all the prayers of the minority shareholders.

He also awarded the sum of N15.7 million as damages against Ibrahim and 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.

“They have not showed how and when they paid for the said shares, and nothing in Paragraphs 11 and 18a of the respondents’ statement of defence shows how they paid for the shares,” Buba ruled.

“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.”

The judge, therefore, held that the case of the petitioners had merits and so he granted all the reliefs sought.

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 averred that by virtue of Clause 3 of the said agreement, Ibrahim purportedly acquired 51 per cent of the company on the condition that he 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 Ibrahim was obligated to pay additional N500 million within 90 days after takeover.

The amount was supposed to serve as working capital for the company and they said that Ibrahim took over the management of the company without complying fully with the conditions of agreement.

The newspaper had been thrown into crisis since 2011, when the agreement commenced.

Its head office in Oregun, Ikeja, had been converted into a private property of Ibrahim, while the paper was operating from a location at Lagos Island owned by him.

Newswatch was established in 1984 by Dele Giwa, alongside Ray Ekpu, Dan Agbese and Yakubu Mohammed.

However, Moses Jolayemi, chief executive officer of the paper, said an appeal had been filed already because the judgement conflicted with an earlier judgement.

He recalled that earlier in an earlier judgement in 2013, Justice O E Abang had said: “I have evidence before me that the 2nd and 3rd plaintiff paid the purchase price of N510,000,000.00. If indeed they did not pay this amount before the completion date ,which was 5/5/2011, I wonder why the agreement was even executed and I also wonder why he was admitted into the board of the 1st plaintiff and elected chairman’’.

Jolayemi said the management of Newswatch Communications had filed a notice of appeal against the judgment, as the federal high court is not a final court in Nigeria and it will be appropriate to file appeal against the ruling.

“Another Federal High Court had earlier last year ruled in favour of the majority shareholders. Justice Abang had declared the sales of Newswatch Communications Limited to the new investor valid and had invalidated the purported decision of the board in appointing Ray Ekpu to the board of the company,” he said in a statement.

“Justice Abang, in a commended judgment, held that the sum of N510 million was paid for the purchase for the 51 per cent shares of the company and that the sum was transferred to Newswatch’s account where the payment to Ray Ekpu and other directors were made. Hon Justice Abang’s judgment was admitted into evidence in the proceeding before Justice Buba.

“In the new case brought by minority shareholders of the company, who together own less than one per cent shares, Justice Buba declared the sales of the majority shareholding invalid. Despite the fact that the judgment of his learned brother, Justice Abang, was before him, Justice Buba said he could still not find any evidence of receipt of payment.”

Reacting to the judgment, Ibrahim directed the management of the company not to contribute to the problem of the judiciary and that the matter should be laid before the court of appeal where he is convinced justice will be done.

“Monday’s judgment lacked legal foundation and moral reasoning and I am sure the court of appeal will re-establish justice and the integrity of the judiciary,” he said.
MOSES JOLAYEMI, MD/CEO
NEWSWATCH NEWSPAPERS LIMITED