A Federal High Court sitting in Lagos has quashed the Share Purchase Agreement which transferred ownership of Newswatch Communications Limited to Global Media Mirror Limited owned by businessman, Jimoh Ibrahim.
The court also awarded N15.7 million damages against Jimoh Ibrahim and the other respondents in the suit.
Presiding Justice Ibrahim Buba also made an order halting further publications of Newswatch Daily among other reliefs sought by the petitioners.
The minority shareholders who petitioned were Mr. Nuhu Aruwa and Prof. Jibril Aminu, while the respondents were Newswatch Communications Limited, Global Media Mirror Limited, Jimoh Ibrahim, Newswatch Newspapers and Corporate Affairs Commission.
Justice Buba, in his judgement, upheld all the prayers of the minority shareholders who had filed the suit to challenge the validity of the takeover of the company. The court held that the respondents could not prove that they paid up for the shares.
“The Petitioners gave evidence to show that the second to third respondents have blatantly failed to pay for the shares in the company. They have not showed how and when they paid for the said shares. Nothing in paragraph 11 and 18A of the Respondents’ Statement of Defence shows how they have paid for the Shares. There is no evidence in paragraph 3.0 that the Respondents have paid on or before 5th May, 2011.
“The Respondents have only given their interpretation to that paragraph. Whatever monies they spent was spent on Daily Mirror and was confirmed by one of the defense witnesses during cross examination.
“The sum of N510million was supposed to be paid for shares and not for any other purpose,and there is no evidence to show that the shares have been paid for. Besides, it was a company called ‘Global Fleet’ that paid the N14million, not any of the respondents who contracted with the first respondent”, the judge ruled.
The judge therefore stated that the case of the Petitioners had merits. “The court grants all the reliefs as set out on the petition at the inception of this case as follows: an order setting aside the contract entered into between the first and second respondent companies by virtue of document titled “Share Purchase Agreement” between Newswatch Communications Limited “Seller” and Global Media Mirror Limited “Buyer” and executed by the parties therein on or about May, 2011.
“A Consequential Order setting aside the Form CAC2 – Statement of Share Capital and Return of Allotment of Shares of the 1st Respondent company dated the 27th day of August, 2012 presented for filing by one Gloria A. Ukeje.
“An Order directing the 2nd and 3rd Respondent jointly and severally to pay special damages in the sum of N15.7million to the 1st Respondent Company being loss of Business profits since August 2012 till October 2012 when the 1st Respondent’s operations were unilaterally shut down by the 2nd and 3rd Respondents and to pay an average sum of N5million per month for every month that the 1st Respondent is shut down without production of its weekly magazine until the determination of this Suit.”
The court held that it had come to the inevitable conclusion that the Petitioners have discharged the burden placed on them and have proved their case while the first to fourth Respondents have failed woefully to discharge the burden placed on them.
Mr. Nuhu Aruwa and Prof. Jibril Aminu, had filed the action seeking for an interlocutory injunction restraining the first to fourth respondents by themselves, their agents or privies from publishing and selling to the public or causing to be published and sold to the public a daily and weekend Newspaper known as Daily Newswatch, Saturday Newswatch and Sunday Newswatch as advertised in the National Mirror Newspaper of January 15, 2013 pending the hearing and determination of the substantial suit.
Supported by a 28 paragraph affidavit deposed to by Aruwa, the former shareholders averred that the 2nd and 3rd respondents purportedly came into majority ownership and/or control of the Newswatch Communications Limited by virtue of a Share Purchase Agreement entered into between 1st respondent and 2nd respondent in May 2011.
Aruwa insisted that under and by virtue of clause 3.0 of the said agreement, the 2nd defendant (Global Media Mirror) and the 3rd respondent (Ibrahim) purportedly acquired 51 percent of the first respondents company on the condition that they pay sum of N510million as purchase price for the said shares. He added that by clause 4.0 of the said agreement, the said sum of money was to be paid on or before May 5, 2011.
He stated further that clause 13.0 of the same agreement, the 2nd respondent was obligated to pay additional N500million within 90 days after take-over of the company which was supposed to be for a working capital for the company.
“That without complying fully with aforementioned conditions of the agreement, the 2nd respondent through the instrumentality of the 3rd respondent went ahead and took over full control and management of the first respondent company.
“That to our utter shock and detriment, the 2nd and 3rd respondents simply shut down the operations of the first respondent company, particularly the publication of Newswatch Magazine, which is the flagship and major source business and source of income of the first respondent company and from which we get returns from our investment in first respondent company.
“The magazine had been in publication for about 28 years before it was stopped by the 2nd respondent and 3rd respondents”, he swore.
He deposed that unless the first to fourth respondents are stopped from carrying out their said intentions, they would have succeeded in killing the business of the first defendant where the plaintiffs have shares and from which they expect dividends for their investment, adding that the first to fourth respondents would have also succeeded in appropriating the entire business of the first respondent to themselves by rendering same redundant and operating the 4th respondent which is owned by them to the detriment of the petitioners.
He said: “It is in the interest of justice that the respondents are called upon to explain and show cause why they cannot wait for the substantive issues herein to be determined before rushing to float the new newspaper despite the fact that it is a live issue in the substantive suit.”