The Federal High Court in Lagos, will on September 26, resume hearing in a suit filed by executors of the estate of Mrs. J. O. Olaitan against Union Bank of Nigeria (UBN) Plc, for the restoration of her 1,114,886 Unilever Nigeria Plc shares.

The executors, represented by her four children: Prince Babasola Thomas, Mrs. Abiola Oshodi, Prince Olabode Thomas and Prince Gloria Thomas as applicants, alleged that their shares, in the custody of the bank’s Registrar’s Department, were fraudulently sold in 2001.

The case, being heard by Justice Mohammed Idris in suit No. FHC/L/CS/675/2013, was instituted through the applicants’ counsel, Mrs Funke Adekoya (SAN), following a February 26, 2004 judgment of the Investment and Securities Tribunal (IST) in the children’s favour.

The IST, in that judgment, directed the bank to restore fraudulently sold shares, including those of the applicants, to affected investors and the applicants are seeking its enforcement.

The 1,114,886 shares, they told the court, were vested in them after their mother’s death in 1987 and, at 50 kobo per share on August 1, 1998, a share certificate No. 96039758 was issued in their favour by Unilever.

In 2001, 2002 and 2003, Unilever issued bonus shares for the ones already held, entitling the administrators to a cumulative sum of N4,253,290.09 as dividends paid and bonus shares from 2004.

Earlier in 2001, the children discovered that the share certificate for the 1,114,886 shares had been cloned and sold and the Registrars were immediately notified.

They alleged that UBN, in a letter dated July 20, 2004, acknowledged the fraud.

In 2004, the Securities and Exchange Commission (SEC) through its Administrative Proceedings Committee (APC) ruled that a firm, Gosord Securities, was liable to buy back the shares and return them to the affected investors or pay them the cash equivalent.

An appeal by UBN failed at the IST which directed the bank (at page 31 of the judgment) to restore the shares to the affected investors.

The IST said, among others, that “We note from the APC’s record that those shares were stolen either from Unilever PLC (former Registrar) or UBN Registrars by the fraud syndicate, but there was no determination in the findings as to whether it was stolen when Unilever had custody of those shares or after UBN Registrars took over as Registrars in 1998.”

It also observed that UBN “had bought back the Unilever shares as directed by the APC and has instituted an action against the stock-broker, ISS Ltd, for the recovery of the N15 million being the value of the shares bought back”.

On May 30, 2013, Justice Idris granted the applicants leave “to register and issue a process for the enforcement of the judgment of the Tribunal in that suit made on February 26, 2004 in favour of the Applicants against the Judgment Debtor”.

The judge also made an order registering the IST judgment as the judgment of the Federal High Court and substituted the applicants’ names as judgment creditors in the place of the SEC.

The case, which has suffered several adjournments, was on July 1, last year further adjourned sine die. The court will reconvene on September 26, to hear a pending application filed by the plaintiffs.

Culled from The Nation onlineng