Stockbroker Sues Bishop Oyedepo, Nigeria Stock Exchange 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.