NAN reports that the court, Presided over by Justice CJ Aneke, in a ruling on the preliminary objections filed by counsel to EMTS, upheld that the defendant’s prayers in Suit No. FHC/L/CS/153/2018 that there was no direct shareholding relationship between Spectrum Wireless and EMTS, thereby vesting on Spectrum the right to sue EMTS to protect its alleged shareholding in EMTS.
The Court also upheld the defendant’s position that there was no privity of contract between EMTS and Spectrum as Spectrum was not a shareholder in EMTS and could not be said to have been directly affected by the actions of its shareholders – Mubadala Holdings Cyprus Ltd, Myacynth and Etisalat International Nigeria Ltd.
The court further upheld the defendant’s position that if at Spectrum had a right of action, its action should be against PTHNV, the company it originally invested in and not EMTS.
The court, therefore, upheld the submission of counsel to EMTS that not being a shareholder of EMTS, Spectrum lacked the locus standi to bring the suit against EMTS on the basis of any decision taken by the shareholders of EMTS.
The court, therefore, upheld the defendant’s prayers saying that Spectrum lacked the locus standi to sue, adding that the concept of “indirect shareholding/economic interest” claimed by Spectrum was unknown to Nigerian law, which only recognized members of a company as those named in its Register of Members.
Justice Aneke also held that Spectrum is not a party to the credit facilities which it claimed were unlawfully obtained, and its elementary law that only parties to a contract can make judicial claims in respect thereof.
The court, therefore, dismissed the suit in its entirety.
In his reaction to the ruling, the Company Secretary/Legal Adviser, 9mobile, Ore Olajide, said “this was victory for democracy, victory for the rule of law in Nigeria, victory for company law, victory for legal practitioners, victory for corporate lawyers, academia and students of law.
“9mobile will continue to focus on satisfying our numerous customers and stakeholders who have faith in us and have stayed the course with us”.
It is recalled that Spectrum Wireless Communications sued EMTS and 16 other defendants including United Capital Trustees Limited (‘the Lenders’), the Central Bank of Nigeria (CBN) and the Nigerian Communications Commission (NCC) over the sale of the telco.
The company claimed that it acquired indirect holding of 30 per cent of the shares of EMTS after a private placement and was allotted 4,041,096 Class A shares of Premium Telecommunications Holdings NV (“PTHNV”) which owns 99% of the shares in MyaCynth Coperative UA (“MyaCynth”).
The plaintiff also claimed that MyaCynth holds 30 per cent of the shares of EMTS BV
and EMTS BV, holds 99.9 per cent of the shares of EMTS and that EMTS’ syndicated loan from the 2nd to 4th defendant’s and was granted without the requisite statutory approval of the CBN, and can, therefore, not be enforced through the sale of EMTS’ shares and assets by the 2nd to the 14th defendants.
Spectrum also claimed that its investments in EMTS would be lost if 15th to 17th defendants were allowed to effect the sale of EMTS.
Security Breach At MMIA: FAAN Suspends Security Chiefs Indefinitely
Following the airside incursion at the Murtala Muhammed International Airport, Lagos on Friday, the Federal Airports Authority of Nigeria (FAAN) has suspended indefinitely the aviation security unit heads who were on duty when the incident occurred, pending completion of an ongoing investigation into the security infringement.
Passengers aboard a Port Harcourt-bound flight panicked on Friday after a yet-to-be-identified man climbed the aircraft while it was about to take-off at the Murtala Muhammed Airport, Ikeja.
According to a viral video shot by one of the passengers in Lagos, the man illegally gained access to the airside with a piece of hand luggage.
The video also showed that the man climbed the aircraft wing and deposited the bag inside one of the engines. The aircraft was at the holding bay expecting clearance for take-off when the incident occurred.
The man’s action caused panic and frenzy as some of the passengers immediately demanded that the pilot and cabin crew open the aircraft doors for them to disembark due to safety concerns.
The Federal Airports Authority of Nigeria said the so-called “mad man” who climbed one of the aircraft of Azman Air ready for take-off to Port Harcourt Airport had been arrested and kept in its custody.
FAAN said the investigation into the serious security breach had already started but did not give details, while the name of the intruder was not also revealed.
The agency, in a statement by its General Manager, Corporate Communications, Mrs Henrietta Yakubu said that the aircraft pilot of the aircraft was the one that first raised the alarm to its security outfit, Aviation Security (AVSEC).
According to her, the incident, which involved an aircraft with the registration number 5N-HAI, occurred at 10:09 a.m when the aircraft was ready for takeoff after a clearance from Air Traffic Controllers (ATC).
Yakubu said its officers responded swiftly to the emergency call.
“The pilot of the Azman aircraft with registration number 5N-HAI departing Lagos to Port Harcourt reported the incident and AVSEC officials swiftly responded. The man has been apprehended and is now in AVSEC’s custody.”
Yakubu explained that the aircraft immediately taxied back to the apron for a thorough check and departed for Port Harcourt afterwards.
Federal Airports Authority of Nigeria (FAAN) has since suspended indefinitely the aviation security unit heads who were on duty when the incident occurred.
The affected officers are the Airport Chief of Security; Mamman Mohammed Sadiku; International Terminal Security Officer, Oni Adedamola Abiodun; Head of Department Domestic Terminal 2, Owotor Kenneth Okezie and Head of Department Domestic Terminal 1, Badejo Adebowale Ayodele.
A statement by the General Manager, Public Affairs, FAAN, Mrs Henrietta Yakubu, stated that in the interim, a General Manager of the Authority, Dr Anne Enyinnaya-Egbadon, had been detailed to take charge of security at the airport. Other affected officers have also been replaced.
The current arrangement, she said was aimed at ensuring an efficient and thorough investigation towards the recovery and sustenance of the airport’s proactive security integrity.
FAAN views this breach as a serious security concern and has commenced an investigation to ascertain the remote and immediate causes of this incident to forestall future occurrence.’
Today’s security breach is not the first at the airport. It will be recalled that SaharaReporters had detailed how security at the Domestic Terminal of the Murtala Muhammed Airport, Lagos, appears compromised as faulty security equipment are being used to screen bags of travellers making use of the airport.
It was also discovered that security screeners deployed by the Federal Airport Authority of Nigeria to MMA Terminal Two are not certified by the National Civil Aviation Authority to carry out the screening.
SaharaReporters had previously reported how a Nigerian woman bypassed all security points at the international wing of the airport and attempted to sneak into a United States of America-bound Delta Air Line. She was, however, arrested by the security of the aeroplane, as she was about to board the plane.
It was reliably gathered that of the not less than 629 staff of FAAN Aviation Security at the Lagos airport, about 85 security personnel are NCAA screeners certified.
NSE: Investors Net Worth Drops By N110 Billion
The Nigerian equities market opened trading for the week on Monday on a negative mood with the market indicators shedding 0.79 percent.
Specifically, the market capitalization shed N110 billion or 0.79 percent to close at N13.812 trillion compared with N13.922 trillion achieved on Friday.
Also, the All-Share Index which opened at 28,566.79 dipped 225.76 points or 0.79 percent to close at 28,341.03, following price loses.
Investors traded 175.168 million shares worth N2.144 billion in 3111 deals against 100.373 million shares valued at N1.459 billion exchanged hands the previous day in 2,707 deals.
A breakdown of the price movement chart indicates that Total recorded the highest loss to lead the losers’ chart with N10 to close at N130 per share.
Dangote Cement trailed with a loss of N3 to close at N170, while Guaranty Trust Bank dipped by 90k to close at N29 per share.
MTN Nigeria Communications decreased by 65k to close at N129, while Eterna was down by 25k to close at N3.40 per share.
Conversely, Nestle led the gainers’ table, increasing by N3 to close at N1,228 per share.
Nigerian Breweries followed with a gain of 50k to close at N58.50, while Conoil appreciated by 40k to close at N20.40 per share.
Vitafoam added 16k to close at N3.70, while Dangote Flour gained 10k to close at N17.50 per share.
In spite of the drop in market indices, the volume of shares traded closed higher as investors bought and sold 175.17 million shares valued at N2.14 billion in 3,111 deals.
This was in contrast with a turnover of 100.37 million shares worth N1.46 billion traded in 2,707 deals on Friday.
Wapic Insurance was the toast of investors for the day, exchanging 42.03 million shares valued at N16.81 million.
United Bank for Africa followed with an account of 24.24 million shares worth N141.95 million, while Guaranty Trust Bank sold 16.04 million shares valued at N478.82 million.
Lasaco Insurance traded 15.11 million shares worth N4.68 million, while Transcorp accounted for 14.61 million shares valued at N15.02 million, News Agency of Nigeria reports.
Coronation Research’s Nigeria weekly update: CBN goes for growth
This year US$18.79bn has flowed into the NAFEX market with Foreign Portfolio Investment (FPI) accounting for 65.40% of inflows (US$12.29bn). The CBN’s supply of US dollars to the NAFEX market has been 3.02% of inflows (US$0.57bn). In effect, FPI is supplying sufficient US dollars to take the pressure off the CBN, hence our confidence that the exchange rate will hold this year. And the CBN has new-found confidence to target growth.
Bonds & T-bills
The yield on a Federal Government of Nigeria (FGN) Naira bond with 10 years to maturity fell by 24bps to 13.95%, and at 3 years declined by 25bps to 13.20% last week. The yield on a 364-day T-bill fell by 51bps to 12.50%. The yield on a T-bill with 3 months to maturity declined by 27bps to 10.30%.
Investors are reacting to the CBN’s revised Standing Deposit Facility (SDF) placement by banks which is now capped at N2.0 billion (US$5.7 million) from N7.5 billion previously. The T-bill market is currently characterised by high demand and strong market liquidity which depressed yields this past week. In the absence of frequent Naira fixed income auctions by the CBN, we expect yields to be stable and not derail significantly from current levels. With this amount of liquidity in the market the initiative lies with the CBN to set rates.
The price of Brent rose by 3.99% last week to US$66.72/bbl. The average price, year-to-date, is US$66.10/bbl, 7.80% lower than the average of US$71.69/bbl in 2018, but 20.75% higher than the US$54.75/bbl average seen in 2017.
The 2019 oil market is themed by supply cuts, for the most part. The latest report from the International Energy Agency (IEA) shows that oil supply exceeded demand by 0.9 million barrels per day for the first half of the year. This comes on top of pre-existing stockpiles and rising shale production. With oil price protection in view, OPEC’s tightening measures are understandable, especially with the US/China trade war still unresolved.
The Nigerian Stock Exchange (NSE) All-Share Index lost 2.41% last week, resulting in a year-to-date return of negative 9.11%. Last week Cadbury Nigeria (+8.64%), Flour Mills of Nigeria (+8.00%) and Unilever Nigeria (+3.13%) closed positive while Forte Oil (-23.33%), PZ Cussons (-10.14%) and Nestle Nigeria (-8.92%) fell.
Last week saw the listing of Airtel Africa which closed the week at N323.50/share, down 18.98% from its listing price of N363.00/share. Such a reception continues to show weak investor sentiment in the market. While investors maintain a cautious stance on investing in equities, some stocks are trading close to multi-year lows and present a good entry point for investors, in our view.
The CBN pushes the growth pedal
The last few weeks have seen a flurry of activity from the CBN; a circular on mobile money & financial inclusion; hints of banking sector re-capitalisation 2.0; another circular prohibiting banks from a loan to deposit ratio less than 60%; and finally a ‘no thank you’ note to banks which may wish to park excess cash in the CBN vault, for excess cash balances above two billion Naira (US$5.6m).
What is the overall signal?
The CBN’s recent focus for the past two years has been on monetary stability. Following a 7.50 percentage point decline in inflation, a rise in foreign exchange reserves and hard-earned currency stability, one could argue that it has won the battle. And it has been helped by the downward prospects for US dollar interest rates, which take the pressure off emerging market currencies to some extent. Now the CBN can return to its other agenda. It wants economic growth.
Nigeria’s GDP growth rate mimics the growth rates of developed countries even though it isn’t one. One sign of sluggish growth has been slow growth in commercial bank loans, which suggests, among other things that the supply side of the economy is weak. The CBN’s approach to galvanising growth had been skewed towards the supply side, and it has deliberately held down loan rates in several areas, such as agriculture, in order to implement its policy. The problem with this initiative is that commercial bank loans have not grown as a result, leading the CBN to come up with more radical measures than before.
Typically banks keep cash balances when the CBN Open Market Operation (OMO) auctions are imminent, driving up overnight lending rates around auction dates. But there is a clear downward trend this year in the rate at which very short-term unsecured loans are traded between banks around OMO auction dates.
In fact, on 4 July the cost of overnight loans between banks fell to its lowest this year (4.86%) suggesting that for a given level of liquidity mop-up by the CBN, banks are willing to lend to themselves at cheaper rates than before. During H2 2018, this relationship was upward trending (when adjusted for outliers).
The CBN is attempting, through its circulars, to unlock excess liquidity trapped within the banking system in the hope that it will be channeled towards the real economy. Banks now have an extra incentive to target firms, and the affluent with (soft) loans when other forms of risk-free income become pressured.
All of this reads well for consumer spending, which is the dominant component of aggregate demand, but it may mean thinner margins for banks. The argument that banks may still expect to improve or maintain their margins without a corresponding expansion in loan books must be nuanced with the guidance that the CBN may restrict banks’ participation in the OMO and T-bill market for their own account. By and large, the CBN’s actions are likely to drag down interest rates until the point is reached where it finds Naira liquidity is negative for the currency.
Indeed, in our view the CBN may be wary of a steep reduction in market interest rates and what they could mean for the Naira exchange rate, on two counts. One, some of the excess liquidity in the banking system could find its way into the FX market. If stability remains a priority, the CBN will have to part with more of its dollar reserves. Two, moderating market interest rates could erode the appeal of the naira carry trade prompting foreign portfolio investors to unwind their positions.
But these are still early days, and we await the CBN’s upcoming auctions to learn more of its rate policy.
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