Ads Top

Court Adjourns KPMG Suit Against FRC Again Till December 14 For Ruling on Objection


A federal high court sitting in Lagos south west Nigeria has  adjourned till Monday,14th December ,2015  for ruling, on a preliminary objection filed by Financial Reporting council (FRC) in opposition to a fundamental human right suit filed against it and its Executive Secretary Osayande Obazee by KPMG Professional Services and its Partner Mr Ayodele Othihiwa
        Mr Norrison Quakers SAN appearing for FRC while arguing his objection  told the court that the Executive secretary Osayade Obazee cannot be sued in his personal capacity as  he was acting on behalf a known principal therefore FRC in this contest he is not a juristic person consequently his name should be struck out from the suit
      Mr Quakers further urged the court to dismiss the suit on the ground that the applicant cannot stop the FRC from performing its statutory duties and functions. In addition the suit he contended is incompetent as the applicants failed to appeal to the technical and oversight committee or exhaust laid down procedure before filling this suit
   However, in his response Mr Babatunde Fagbohunlu SAN representing the applicants urged the court to grant the prayer of the applicant on the ground that FRC failed to comply with the statutory procedure for the investigation of any complain of dishonest practice, negligence or malpractice, which requires the FRC to notify the applicants whose conduct are under investigation, of the nature of the complain, and to then summon and hear the applicants.
    Mr Fagbohunlu also argued that the respondents delivery of the letter dated 30th of October,2015 to the applicants, the respondents had already infracted the applicants fundamental right to a fair hearing by holding in their regulatory decision of 26th October 2015 that the applicants were negligent, despite the respondents failure to summon the applicants or give the applicants an opportunity to be heard on whether or not they were negligent or in contravention of any regulatory policies or laws as alleged,
     Consequently, Mr Fagbohunlu contended that the respondents acted beyond their statutory duties which infringe upon the applicants rights to fair hearing and caused untold hardship, injury to the applicants reputation and irreparable damage to them also there in the interest of. Justice urged the court to grant the prsayers of the applicants,including an award of #100million as aggravated and exemplary damages in their favour.
      After listening to the argument of the two parties Justice Ibrahim Buba adjourned till 11th of December,2015 for ruling.
      Meanwhile the order of the court restraining Financial Reporting Council of Nigeria (FRC) and its executive secretary and CEO, Mr. Jim Osayande Obazee, from taking any action, sanction or measure against KPMG Professional Services and Mr. Ayodele Othihiwa, a Partner in the firm, pending the hearing and determination of the suit filed by the applicants still stands
       The interim order of the court granted was sequel to an application argued before the court by Barrister Chuka Ikwuazo from the law firm of Aluko and Oyebode, urging the court to restrain the respondents from taking any sanction and also order an accelerated hearing of the suit. The interim order was  granted by the court against the FRC,  On 4th of November, Justice Buba also ordered the FRC to maintain the status quo in a related case filed by StanbicIBTC bank  now pending before the court.
      KPMG and its Partner Ayodele Othihiwa had filed an application for the enforcement of their fundamental rights following the FRC letter of 26 October 2015, which it called a final notice and its ‘regulatory decision’ conveyed in another letter of 30 October, on the financial statements of StanbicIBTC Holdings Plc for 2013 and 2014.The FRC in one of its regulatory decisions had suspended Othihiwa  “until the investigation as to the extent of the negligence of KPMG Professional Services is ascertained”.
       KPMG and Othihiwa contend that the FRC decision was published and issued without informing or notifying them of the nature of the allegations made against them and inviting them to respond to the allegations.
FRC decision, KPMG and Othihiwa claimed not only violated their constitutional right to fair hearing but also offends Section 62(2) of the Financial Reporting Act, which spells out the procedure to be adopted by the FRC in investigating a professional body for any  ‘complaint or dishonest practice, negligence, professional Misconduct or malpractice’.
     The section states that FRC shall “ notify the professional whose conduct, act or omission is under investigation of the nature of the complaint and it shall summon or hear the professional”.
           The applicants further contended that FRC and Mr. Obazee, did not only breach this section, but they also breached Section 15(2) b of the FRC Act, which states that a Technical and Oversight Committee shall review “ sanctions to be meted out to any professional accountant, professional or public interest entity”.
             KPMG and Othihiwa further claimed that even where the Technical and Oversight Committee had ratified the decision of the FRC, the FRC had failed to exhaust the provisions of its own law, by allowing them to exercise their right of appeal to the Technical Committee and by subjecting its decision to the approval of the FRC board.
            The FRC at the moment has no board. It was dissolved on 16 July 2015. “In effect the respondents purported to make and they seek to enforce the aforesaid ‘regulatory decision’ at a time when the statutory means of recourse stipulated under the Act does not exist”, KPMG and Othihiwa stated in their application. KPMG and Othihiwa in asking the court for accelerated hearing averred that they have been greatly affected and have the potential of suffering greater loss of business opportunities and turnover of business, as a result of the action of the FRC, which they consider unfair, ultra vires and a breach of their fundamental rights to a fair hearing 

The court case marked the second reaction of KPMG Professional Services to the decisions of Financial Reporting Council within a month.

No comments:

Shybellmedia. Powered by Blogger.