INTHE HIGH COURT OF LAGOS STATE IN THE IKEJA JUDICIAL DIVISION HOLDEN ATIKEJA BEFORE THE HONOURABLE JUSTICE K.A. JOSE (MRS.) oT DAY OF DECEMBER 2019 ‘SUIT NO: ID/112¢/2012 BETWEEN: FEDERAL-REPUBLIC OF NIGERIA COMPLAINANT i 1. ANAYO NWOsU 2. ASHOKISRANI i cmos GERTIFIED TRUE CODY: 5. NULEC INDUSTRIES LIMITED 6. BANK PHB/KEYSTONE BANK PLC DEFENDANTS: JUDGMENT By an amended charge dated 24” June 2019 the Defendants were charged with the following offences: ‘STATEMENT OF OFFENCE COUNT 1 Stealing by conversion contrary to Section 390 of the Criminal code, Cap C17 Vol. 2 Laws of Lagos State 2003, PARTICULARS OF OFFENCE ANAYO NWOSU, ASHOK ISRANI, OLAIIDE OSHODI, SUNNY OBAZEE, BANK PHB PLC/KEYSTONE BANK LTD and NULEC INDUSTRIES LIMITED between July 14 and 31° July 2008 in Lagos within the jurisdiction of this honourable Court did fraudulently convert to your own use, the sum of N285,000,000.00 (Two Hundred and Eighty Five Million Naira) being the property of Dozzy Oil and Gas Ltd and Treasure Much Ltd when you credited the account of Nulec with the said sum to defray its debt owed to Bank PHB Plc and to utilise the balance as against paying the sum into the private placement account of Nulec which 1sum was to be used as payment for the purchase of shares of Nulec industries Limited under a private placement. STATEMENT OF OFFENCE COUNT 2 Stealing by conversion contrary to Section 390 of the Criminal code, Cap C17 Vol. 2 Laws of Lagos State 2003. PARTICULARS OF OFFENCE ANAYO NWOSU, ASHOK ISRANI, OLAJIDE OSHODI, SUNNY OBAZEE, BANK PHB PLC/KEYSTONE BANK LTD and NULEC INDUSTRIES LIMITED between July 14 and 31" July 2008 in Lagos within the jurisdiction of this honourable Court did fraudulently convert to Your own use, the sum of N145,000,000.00 (One Hundred and Forty Five Million Naira} belng the property of Dozzy Oil and Gas Ltd and Treasure Much Ltd when you transferred the sald sum Into the account of Nulee with Guaranty Trust Bank as against paying the sum into the private placement account of Nulec whit sum was to be used as payment for the Purchase of shares of Nulec industries Limited under a private placement, ‘STATEMENT OF OFFENCE COUNT 3 Stealing by conversion contrary to Section 390 of the Criminal code, Cap C17 Vol. 2 Laws of Lagos State 2003, PARTICULARS OF OFFENCE ANAYO NWOSU and OLAJIDE OSHODI between June and September 2008 in Lagos within the jurisdiction of this honourable Court did fraudulently convert to your own use, the sum of N110,000,000.00 (One Hundred and Ten Million Naira) being the property of Dozzy Oil and Gas Ltd and Treasure Much Ltd when the sald sum was paid into the account of Drillcom Investement W/A Limited as premium charge of NJ.10 per share in respect of 100 milion shares aside the original N2.85 per share being payment for the purchase of shares Of Nulec industries Limited under a private placement. STATEMENT OF OFFENCE COUNT 4 ‘ Publishing a false statement contrary to Section 436(b) of the Criminal code, Cap C17 Vol 2 Laws of Lagos State 2003. PARTICULARS OF OFFENCE ‘ CERTIFIED TRUE COPY NULEC INDUSTRIES LIMITED and ASHOK ISRANI being a director of Nulec industries Limited Detween June and September 2008 within the jurisdiction ofthis Court with intert to induce Dozzy Oil and Gas Ltd, Treasure Much Limited and Sir Daniel Chukwudotie to buy the Saof Nulec Industries Limited published a written statement to wit: a private placement Memorandum wherein you stated in a material particular at page 8 thereof that the company would take the necessary steps to list the shares on the floor of the Nigerian stock Exchange immediately after the private placement has been concluded but which statement is to your knowledge false. STATEMENT OF OFFENCE COUNTS Publishing a false statement contrary to Section 436(b) of the Criminal code, Cap C17 Vol. 2 Laws of Lagos State 2003. PARTICULARS OF OFFENCE NULEC INDUSTRIES LIMITED and ASHOK ISRANI being a director of Nulec industries Limited between June and September 2008 within the Jurisdiction of this Court with intent to induce Dozzy Oil and Gas Ltd, Treasure Much Limited and Sir Daniel Chukwudozie to buy the shares of Nulec Industries Limited published a written statement to wit: a private placement memorandum wherein you omitted to state in a material particular at page 7 thereof that an amount more than 31.41% or N415,000,000.00 (Four Hundred and Fifteen Million Naira) of the proceeds would be used for loan repayment but you stated that the said published amount or percentage thereof was to be used only for loan repayment, and which ‘statement Is to your knowledge false. ‘STATEMENT OF OFFENCE COUNT 6 Publishing a false statement contrary to Section 436(b) of the Criminal code, Cap C17 Vol. 2 Laws of Lagos State 2003. PARTICULARS OF OFFENCE NULEC INDUSTRIES LIMITED and ASHOK ISRANI bei 18 a director of Nulec industries Limited between June and September 2008 within the Jurisdiction of this Court with intent to induce Dozzy Oil and Gas Ltd, Treasure Much Limited and Sir Daniel Chukwudozie to buy the shares of Nulec Industries Limited published a written statement to wit: a private placement memorandum wherein you omitted to state in a material particular at page 7 thereof that an amount more than 1.8% or N25,000,000.00 (Twenty Five Million Naira) of the proceeds would be used for local supply payment but you stated that the Said published amount or Percentage thereof was to be used only for local supply payment, and which statement is to your knowledge false. . = CERTIFIED TRUE COPY‘STATEMENT OF OFFENCE COUNT 7 Publishing a false statement contrary to Section 436(b) of the Criminal code, Cap C17 Vol. 2 Laws of Lagos State 2003, PARTICULARS OF OFFENCE NNULEC INDUSTRIES LIMITED and ASHOK ISRANI being a director of Nulec industries Limited between June and September 2008 within the jurisdiction of this Court with intent to induce Dozzy Oil and Gas Ltd, Treasure Much Limited and Sir Daniel Chukwudozle to buy the shares of Nulec Industries Limited published a written statement to wit: a private placement Memorandum wherein you omitted to state in a material particular at page 7 thereof that an amount more than 24.21% or N320,000,000.00 (Three Hundred and Twenty Million Naira) of the proceeds would be used for foreign supply payment but you stated that the sald published amount or percentage thereof was to be used only for foreign supply Payment, and which statement is to your knowledge false. ‘STATEMENT OF OFFENCE COUNT 8 Publishing a false statement contrary to Section 436(b) of the Criminal code, Cap C17 Vol. 2 Laws of Lagos State 2003. PARTICULARS OF OFFENCE NULEC INDUSTRIES LIMITED and ASHOK ISRANI being a director of Nulec industries Limited between June and September 2008 within the jurisdiction of this Court with intent to induce Dozzy Oil and Gas Ltd, Treasure Much Limited and Sir Daniel Chukwudozle to buy the shares of Nulec Industries Limited published a written statement to wit: a private placement ‘memorandum wherein you omitted to state in a material particular at page 7 thereof that an amount more than 6.2% or N82,000,000.00 (Eighty Two Million Naira) of the proceeds would not be held in reserve but you stated that the said published amount or percentage thereof was to be held in reserve, and which statement is to your knowledge false, STATEMENT OF OFFENCE COUNT 8 i Publishing a false statement contrary to Section 436(b) of the Criminal code, Cap C17 Vol. 2 Laws of Lagos State 2003. PARTICULARS OF OFFENCE NULEC INDUSTRIES LIMITED and ASHOK ISRANI being a director of Nulec industries Limited between June and September 2008 within the jurisdiction of this Court with intent to induce Dowzy Cll and Gas Ltd, Treasure Much Limited and Sir Daniel Chukwudozie to buy the ™ 4 : GERTIFIED TRUE COPYOf Nulec Industries Limited published a written statement to wi private placement memorandum which in a material particular is to your knowledge false by omitting to state in the private placement memorandum that 9.6% or 'N104,000,000.00 (One Hundred and Four Naira) of the proceeds would be used for new Purchases and miscellaneous but which ‘statement is to your knowledge false. STATEMENT OF OFFENCE COUNT 10 Publishing a false statement contrary to Section 436(b) of the Criminal code, Cap C17 Vol. 2 Laws of Lagos State 2003. PARTICULARS OF OFFENCE ANAYO NWOSU, ASHOK ISRANI, OLAJIDE OSHODI, SUNNY OBAZEE, BANK PHB PLC/KEYSTONE BANK LTD and NULEC UNDUSTRIES LIMITED being promoters, directors and/or officers of Nulec industries Limited’s shares subscription by private placement between June and September 2008 within the jurisdiction of this Court with intent to induce Dozzy Oil and Gas Ltd, Treasure Much Limited and Sir Daniel Chukwudozie to buy the shares of Nulec Industries Limited published a written statement to wit: @ private placement memorandum wherein you stated in a material particular at page 8 thercof that the Private Placement is underwritten on a standby basis but which statement is to your knowledge false. ‘STATEMENT OF OFFENCE COUNT 11 Publishing a false statement contrary to Section 436(b) of the Criminal code, Cap C17 Vol. 2 Laws of Lagos State 2003, PARTICULARS OF OFFENCE NULEC INDUSTRIES LIMITED and ASHOK ISRANI being promoters and director of Nulec Industries Limited's shares subscription by private placement between June and September 2008 within the Jurisdiction of this Court with intent to induce Dozzy Oil and Gas Ltd, Treasure Much Limited and Sir Daniel Chukwudozie to buy the shares of Nulec Industies Limited published a written statement to wit: a private placement memorandum wherein You omitted to state in a material particular at page 7 thereof that an amount more than 'N480,000,000.00 (Four Hundred and Eighty, Million Naira) representing 36.31% of the Proceeds would not be used for the product line expansion but you stated that the said Published amount or percentage thereof was to be used only for product line expansion, and which statement is to your knowledge fals‘STATEMENT OF OFFENCE COUNT 12 Publishing a false statement contrary to Section 436(b) of the Criminal code, Cap C17 Vol. 2 Laws of Lagos State 2003. PARTICULARS OF OFFENCE NULEC INDUSTRIES LIMITED and ASHOK ISRANI being promoters and director of Nulec Industries Limited’s shares subscription by private placement between June and September 2008 within the jurisdiction of this Court with intent to induce Dozzy Oil and Gas Ltd, Treasure Much Limited and Sir Daniel Chukwudozie to buy the shares of Nulec industies Limited published a written statement to wit: a private placement memorandum wherein you stated in a material particular at page 13 thereof that the purpose of the offer was to add new production faci : ies for electric kettles, food blenders, free standing cookers and fans and which productions were expected to commence in October 2008 for small appliances and November 2008 for cookers but which statement Is to your knowledge false. STATEMENT OF OFFENCE COUNT 13, Publishing a false statement contrary to Section 436(b) of the Criminal’ code, Cap C17 Vol. 2 Laws of Lagos State 2003. PARTICULARS OF OFFENCE ANAYO NWOSU (officer of Bank PHB), [Link], OLAIIDE OSHODI(officer of Bank PHB), SUNNY OBAZEE(officer of Bank PHB), BANK PHB PLC/KEYSTONE BANK LTD and NULEC UNDUSTRIES LIMITED being promoters, directors and/or officers of Nulec industries Limited's shares subscription by private placement between June and September 2008 Within the jurisdiction of this Court with intent to induce Dozzy Oil and Gas Ltd, Treasure Much Limited and Sir Daniel Chukwudozie to buy the shares of Nulec Industries Limited Published a written statement to wit: a private placement memorandum wherein you omitted to state in a material particular at page 39 thereof that the loan of N130,000,000.00 (One Hundred and Thirty Million) owed by, Nulec Industries to Bank PHB would nat be Tepaid from the business cash flow of Nulec Industries Limited but you stated that the said Published loan thereof was to be repaid from the business cash flows of Nulec Industries Limited, and which statement is to your knowledge false. : ‘STATEMENT OF OFFENCE COUNT 14 Conspiracy to obtain money by false pretence contrary to Section (a) and punishable under’ Section 1(3) of the Advance Fee Fraud and Other Fraud Related Offences Act of 2006. GERTIFIED TRUE COPY 6PARTICULARS OF OFFENCE ANAYO NWOSU, ASHOK ISRANI, OLAIIDE OSHODI, SUNNY OBAZEE, BANK PHB PLC/KEYSTONE BANK LTD and NULEC UNDUSTRIES LIMITED sometime in 2008 in Lagos within the jurisdiction of this honourable Court conspired to commit an offence to wit: obtaining the sum of N&55,000,000.00 (Eight Hundred and Fifty Five Million Naira) from Dozzy Oil and Gas Ltd and Sir Daniel Chukwudozie on the false pretence that Nulec Industries Limited was in active profit making, manufacturing and trading activities thereby purporting same to be payment for the purchase of shares of Nulec industries Limited under a private placement. ‘STATEMENT OF OFFENCE COUNT 15 ‘Obtaining money by false pretence contrary to Section 1(3) of the Advance Fee Fraud and Other Fraud Related Offences Act of 2006, PARTICULARS OF OFFENCE ANAYO NWOSU, ASHOK ISRANI, OLAJIDE OSHODI, SUNNY OBAZEE, BANK PHB. PLC/KEYSTONE BANK LTD and NULEC UNDUSTRIES LIMITED sometime in 2008 in Lagos within the jurisdiction of this honourable Court with intent to defraud obtained the sum of NB55,000,000.00 (Eight Hundred and Fifty Five Million Naira) from Dozzy Oil and Gas Ltd on the false pretence that Nulec Industries Limited was in active profit making, manufacturing and trading activities thereby purporting same to be payment for the purchase of shares of Nulec industries Limited under a private placement. ‘The Defendants pleaded not guilty to the charges consequent to which the matter went into trial, The 1* prosecution witness (PW1) was Chukwuma Orjl an operative with the Economic and Financial-Crimes Commission (EFCC) who said that his office received a petition from Dozzy Oil and Gas Limited (the complainant) which alleged that the 1* Defendant approached one Chukwudozie Daniel managing director of the complainant and his associates to invest in the private placement of shares of the 5" Defendant and they so invested, It was alleged that the shares were not listed on the Stock Exchange as promised and that the collection of money for the sale of the shares had been fraudulent. The complainant also sald that it had been misled into investing in the 5" Defendant by the false information given to it by fp 7 GERTIFIED TRUE COPYDefendant. The EFCC thereafter wrote the 6" Defendant to request for the private placement proceeds account as well as the operating account of the 5" Defendant and was given the account statements, PW41 said he saw fraudulent manipulation in the account statements and the 1* Defendant was invited to make a statement. In same he stated that he was the one who invited the complainant to invest in the private placement. He agreed that he gave the complainant the impression that the shares would on completion of the private placement be listed at a higher price than that of the placement. PW1 said that investigation showed that the 1* Defendant was the one who moved funds from the complainant's Zenith Bank account to the account of another company called ‘Treasure Much Limited (Treasure Much) which was also being run by Chukwudozie Daniel. The 1" Defendant was said to have given instructions for the issuance of a bank draft of N285 Million from the account of Treasure Much and this draft was used to buy shares in the private placement for Daniel Chukwudozie and his associates, PW1 said as at the time Of the private placement the 5" Defendant was almost a dead company and was indebted to the 6" Defendant in the sum of N130 Million. The 1 Defendant who was the account officer to the 5 Defendant packaged the private placement to make sure that the N130 Million owed to the 6" Defendant was paid through the proceeds of the private placement which was to open on 16” July 2008 and close on 31* July 2008. On 14" July 2008 however, the draft of N285 Million issued by the complainant was paid into the 5" Defendant's operating account instead of the private proceeds account which had yet to be opened, PW1 said that the sum of Ni.1 Billion was realised from the private placement and from this, the sur of N102 Million was used for expenses. Out of the balance of N970 Million, the sum of N547 Million was wired outside Nigeria whilst the private placement was still ongoing through a company in Switzerland called Risa Enterprises. From Switzerland the monies were wired back to the UBA domiciliary account of the 2" Defendant. PW1 said that although the draft of N285 Million p: into the 5" Defendant’s operating account was said by the 5" Defendant to have been paid in error and the transaction reversed, no reversal took place as the money realised at the end jof the private placement was a little bit over N700 Million as against the over N900 Million that should have been realised. He said the monies were also spent during the private placement as opposed to the private ne SERTIFLED TRUE COPY‘memorandum which stated that the sums from the private placement would be kept in an interest ylelding account until after allotment, PW4 said the 2" Defendant was been invited to the EFCC and he accepted violating the Purpose of the offer as no money was used for product line expansion. Investigation also revealed that a company called Drillcom Nigeria Limited operated by the 3” Defendant undertook to underwrite 100 Million units of shares and for this purpose it received N19.5 Million from the 5 Defendant, This company was also paid N110 Million as premium on the shares purchased by the complainant and this money was fixed in the 6" Defendant and grew to N136 Million before it was lodged in Skye Bank in an account of which the 3 Defendant was signatory. PW1 said that the N110 Million was refunded to the complainant whilst the interest of N26 Million that accrued on it was shared amongst top management of the 6" defendant. PW/1 sald that when enquiries were made as to why the shares were not listed on the stock exchange it was revealed that this was because the 5" Defendant was unable to provide Post private placement audited account to the Securities and Exchange Commission (SEC). The investigators visited the factory of the 5"" Defendant and saw that It was not doing well and did not produce or invest what it claimed in the prospectus. It was also revealed that "1104 Million and N28 Million were sent from the 5" Defendant to a relation éf the 2 Defendant called Sasha Israni who was invited for interview and said he would come but ever did. PW4 said further that the proceed sums were not invested as stated in the Private placement memorandum which had indicated that 6% of the proceeds would be held In reserve whilst 36% would be for product line expansion. The investigation by EFCC rather revealed that the proceeds were used to pay loans owed by the 5" Defendant. The EFCC also saw that the private placement was not underwritten as in ted in the placement memorandum but it was Drilicom Limited which entered into a memorandum with the 5" Defendant for underwriting of 100 Million units of shares and for this it received N19.5 Milllion from the 5 DefendantSeveral documents including the petition written by the complainant, the private placement memorandum and statements made-by the Defendants were tendered through PW1 and marked as Exhibits P1-P391, PW1 when cross examined by Counsel to the 1", 3" and 4" Defendants agreed that shares ‘were bought during the private placement by Daniel Chukwudovie and his associates but Said he did not know the names of Daniel Chukwudozie's associates who bought shares and that al the shares had now been consolidated in the name of the complainant Dozzy Oll and Gas. He agreed that 22 milion were shares bought in the name of Daniel Chukwudozte Which amounted to N62 Million whist his associates. bought 278 Million units of shares valued at N792.3 Million. He said he did not know if the 1", 3" and at Defendants were Involved in the acquisition of the shares by Chukwudozle or when the shares were acquired by the complainant as this was not part of his investigation. He ‘agreed that the 1% 3" and 4" Defendants were not Part of the promoters or directors of the 5 Defendant and the Private placement memorandum (Exhibit F9) contained a clause that prospective Investors should seek professional advice before investing. When it was put to him that the 4” Defendant was not involved in the allegations made by the complainant, PW1 stated that the 4 Defendant was the head of the 6! Defendant's asset management unit which Prepared the private placement document. He agreed that from Exh P9, N445 Million from the private placement was to be used for debt repayment but sald the sums used for debt repayment were higher. He also agreed that the private placement was subscribed by the 4 Defendant and other staff of the 6” Defendant. He said he was not aware that before the Private placement closed, the 5 Defendant approached the 6 Defendant for a bridging loan of N4S0O Million which the 6 Defendant disbursed pending the end of the placement. When asked about Drilleom, PW sald it was a front company being operated by the 1" and 3" Defendants though he agreed ‘that nether Defendant was a shareholder in same but the 3" Defendant told the EFCC that hhe would take responsibilty for the said company. He agreed that Brilleom underwrote 100 million units of shares and that it was for this that it was patd N19.5 Million as underwr is fee by the complainant. He said the standby underwriter should have been the 6” Defendant and that it was approached by the 5" Defendant after the subscription vistas f* 10 S GERTIFIED TRUE COPYfell short by N300 million for Payment of this sum based on the underwriting agreement but the 6" defendant did not pay the said N300 Million. He however agreed that no name was mentioned in Exhibit P9 as the underwriter of the placement. When cross examined by Counsel to the 2™ and st Defendants PW1 maintained that the N2E5 Million paid on behalf of the complainant by Drillcom into the operating account of the 5" Defendant before the private Placement opened was did not stay in the private Placement account as although the money was transferred into the placement account, it was moved back into the operating account immediately by the 6" Defendant. He agreed ‘hat the complainant filed a suit in the Federal High Court against the s* Defendant but said this was not the reason why the shares were not lsted on the stock exchange and the non listing was due to failure of the 5” Defendant to ‘meet with the requirements of SEC. When asked if was due to the shortfall in the amount realised from the subscription and the 130 Million taken by the 6" Defendant that the 5! Defendant was not able to utilise the Smounts earmarked in the private placement, PW1 said even the litle amount realised was OF used as stated in the private placement. PW/1 said he knew Sasha Israni was a board ‘member of the 5" Defendant but he did not know if the 5" Defendant borrowed money from him. When cross examined by the 6" Defendant's Counsel PW4 sald the complainant was advised by the 1* and 3" defendant on the Purchase of the shares but he did not know if It engaged professional advisers, He also did not;know if the complainant ‘sought the consent of the 6" Defendant before having the @ssoclates of Daniel Chukwudorie transfer their shares to it Pw2 was Jatau Nanpon a stockbroker with a company called APT Security and Funds Limited, He testified that the 5" Defendant was. client of his company and approached it in 2008 after completion of its private placement exercise for the purpose of getting its shares listed on the Nigerian Stock Exchange (NSE). His company gave the 5 Defendant the list of documents required for getting the shares listed but it did not et these docurnents within a reasonable period of time, The application Was eventually filed in February 2009 and the NSE commenced the process of going through the documents during which it Teovenss or 11 CFRTICJED TRUE CODYadditional documents. One of the documents requested for was the full account of the 5" Defendant as at December 2008 whether audited or not but what the 5 Defendant Provided was the audited accounts for nine months account which ended in September 2008. The NSE thereafter granted provisional approval for the listing. The process of registering the Securities and Exchange Commission (SEC) then commenced but the 5" Defendant did not provide the required documentation ‘one of which was audited accounts up tl 2009. The NSE sent several reminders from 2009 up tll 2012 by which time there was a need to submit the audited accounts for 2010 as well. A final reminder was sent by SEC which stated that ifthe 5" Defendant could not comply with the requirements the entire process would be [Link] would have to start afresh, PW2's employer thereafter received a letter in which It was informed that the S" Defendant aid not have a managing director and had just appointed one in 2014 and that once he came on board it would supply the audited account for 2009 and 2010. The 5 Defendant however did not send any audited accounts and PW2 sald he assumed that the SEC would have aborted the process because of what was stated in the last reminder. When asked ‘what the audited accounts had to do with the private placement, PW2 said that it was a document that would reflect how the placement proceeds was disbursed. He sald the final approval of SEC was not obtained with the audited account of 2008 as what was used was the management account of September 2008 on which it gave approval in principle and that all outstanding documents including the audited accounts for 2008 were expected to be Presented before listing. When cross examined by Counsel to the 1", 3% and 4" Defendants PW2 sald company was appointed by the 5" Defendant for the listing of the shares and that such listings usually took between 2-4 months to get approval. He did not know if the 1° 3" and 5! Defendants hhad any listing role after the private placement exercise, Under cross examination by Counsel to the 2° and 5! Defendants PW2 sald that approval in Principle was granted by SEC for the ing of the shares but before same could be listed the 5" Defendant would have to submit all the documents required. He agreed that NSE officials visited the factory of the S'* Defendant and that a dead company could not get 12 b } aenecicn ToHZeNDyapproval. He said that he wrote asking for the audited accounts but he did not have the letter before the Court, however several letters were written by SEC asking for the accounts. He sald he was not aware of a petition written by the complainant against the 5" Defendant or that an action was filed by the complainants. A letter written by SEC to the 5“ Defendant was at this stage tendered through PW2 and marked as Exhibit 395, When cross examined by the 6" Defendant's Counsel, PW2 said he did not know the 6 Defendant and the 6 Defendant was not responsible for the audited accounts which had Not been provided. The 3 witness PW3 was ‘Azukaego Ezemakam an employee of Guaranty Trust Bank Plo (GTBank). This witness testified that the 5" Defendant maintained an account with her bank. Between July and August 2008 GTaank received the sum of N245 Million from the 6” Defendant into the 5® Defendant's account and these monies were used to revalidate bills for collection. PW3 said bills for collection meant that ‘the customer was putting up a request to purchase foreign funds and remit ‘Same to its supplier whose name in this case ‘was Risa Enterprises and the revalidation was to revive previous approvals that had been given for purchase of such foreign currency. She referred to some Form Ms which were due for payment between 2005 ‘and 2006. Further sums of N6O Million and N69 Million were received from the 6" Defendant into the S! Defendant's account also used to make Payments on bills for collection. She sald that prior to the inflows from the 6" Defendant the account had not been in a good state as the 5" Defendant was indebted to the bank and that after the inflows were received, same were used to pay for the expired bills and the 5" Defendant remained indebted to his bank, A letter written by GTBank was admitted through Pw3 and admitted as Exhibit P398, PW3 said that from another document being Exhibit 396 there was a transfer of N29,275,000 by the 5 Defendant to Sasha Israni. Under cross examination PW3 said she did not know if it was the 1", 3" and 4" Defendants that effected the transfers of money from the 6" Defendant to GTBank, She said there was nothing wrong with the transactions on the bills for collection and that same were usually cone when the payment on such bills expired and the customer would apply through cei 3 CERTIFIED TRUE copybank to the CBN for revalidation, PW3 said she did not see from the records any payment made by Sasha Israni to the 5" Defendant's account. Pw4 was Amaka Ukachukwu an employee of United Bank for Africa (UBA). She sald that the 5" Defendant maintained a dollar and Nalra account with her bank. In respect of the dollar account, there were several inflows of dollar amounts from Risa Enterprises and payments to persons who Included one Ume Vashi Isran and Vashi Dejanni. As regards the Nalra account, there were inflows of a total sum of N143,018226.04 from the 6" Defendant into the 5% Defendant’s account with her bank. From the account the 5" Defendant then made Payment of tax In favour of Lagos State Government as well as payments for bills for Form M (bills for collection). PW4 said the account was later frozen based o' struction from the When cross examined PW4 said the transactions did not involve the 1 3" and 4” Defendants, She did not know the source of the funds that came from the 6” Defendant but all the payments on the bills for Collection were made to Risa Enterprises. PWS was Olawale Adekunle an employee of Skye Bank Plc. He also testified about inflows totaling N225 Million into the 5" Defendant's account from the 6" Defendant, Out of this ums about N30 Million was used for liquidation of debt on the account, whilst about N65 Millon purchase dollars for bills for collection on behalf of the S'* Defendant and the rest withdrawn in cash by the 5" Defendant. PWE6 was Adefemi Kolawole an employee of First City Monument Bank (FCMB) Plc. He testified as to th low of a total sum of N59,100,000.00 from the 6" Defendant into the 5" Defendants account. Out of this Naa Million was used for purchase of dollars for settlement of bills for collection and the rest used for the payment of the §'* Defendant's loan to FCMB, PW? was Dairo Oluwakemi an employee of Access Bank Plc. His testimony was also on inflow of N23,500,000.00 from bank PHB to the 5! Defendants account which was used to Purchase dollars and same remitted to Risa Enterprises. 14 - & ' OTRIIFIED TRUE COPYPW was Hector Oghobahafe a bank employee with ‘Skye Bank Ple. He sald that on 2™ October 2008 the sum of N34 Milion was received into the account of Drillcom Limited from the 6* Defendant out of which the sum of N110 Million was paid out to the complainant. Another N20 Million was given value in the name of Kalushe Resources Limited whilst the remaining money was placed in fixed deposit and later paid out in tranches, ‘When cross examined PW8 said he did not know If the 1, 3 and a Defendants were directors of Drillcom and he did not know the signatories to the account. He also did not know the 2% and 5" defendants and he agreed that the 6! Defendant did not benefit from the inflow or outflow from ‘the account, PW9 was Nkoye Egonu an employee of Diamond Bank le. She testified as to the account of the 5" Defendant which had Previously been in debit and how the sum of. N79,600,000,00 was on 11" August 2008 received fram the 6! Defendant into same. The said sum reversed the Indebtedness on the account and the rest of the amount in the account now in credit WAS used to make bids for the purchase of dollars on behalf of the 5" Defendant which were paid to Risa Enterprises. On 9" September 2008 another Payment of N65 Million was received from the 6" Defendant and this sum along with other Payments made into the account put the 5 Defendant's account with Diamond Bank account which had gone into debit after the purchase of the dollars back into a credit position, PW20 was Usman Zakari an operative of the EFCC who also testified on investigations done by the EFCC. He said a cheque of N285 Million was released by the complainant for the Purchase of shares of the 5" Defendant's in the private Placement. That Prior to this the 6” Defendant was indebted to the 5" Defendant in the sum of N130 Million and two days before the commencement of the private placement the cheque of N285 Million was ‘Credited into the 5" Defendant’s account with the 6 Defendant. When this was done the indebtedness of the 5" Defendant was erased, On the same day the 5" Defendant wrote that the payment should be reversed stating that the crediting of its account was done in Srror as there was a private placement account into which the money should have ne 15 S aratifjeD TRUE COPYPaid. The 5" Defendant however also instructed the 6" Defendant to issue @ cheque in the sum of N19,500,000.00 to Drillcom. He said that before the reversal of the N285 Million Payment, there were series of debits to the tune of the N130 MI FCMB, Skye Bank, Diamond Sank thus the N285 qn and the transfers to illion payment was not reversed. PW10 sald that all the transfers were done after the letter of reversal was written, PW10 said that Drillcom in which he sad the 3" Defendant, his younger sister and her husband had interest, He said there was a memorandum of understanding (MOU) between the 5" Defendant and Drillcom in which it was agreed that a flat fee of 7% of the underwritten sum would be paid to Drillcom. When the MOU was shown to the 3 Defendant he agreed he would refund the sum of N19,500,000.00 but he failed to do that. PWA0 said that Drillcom was not featured in the private placement memorandum and what ‘the public saw was the 6" Defendant as the standby underwriter. Under cross examination PW10 said that he did not know whether the ‘SEC regulated private Placements but the.6" Defendant's job in the placement would end after the proceed funds had been pald to the 5! Defendant and the shares allotted, He agreed that Daniel Chukwudozie only bought twenty two million units of shares worth N62 Million and brought other persons who subscribed to additional shares worth N792 Millon. He agreed that it ‘was after allotment that the complainant acquired the shares from the other persons and became the owner of same. He agreed that this was a secondary transaction to the initial Private placement and he did not know the other persons that bought shares and sold same to the complainant. He agreed that by Exhibit P9 the persons with responsi! lity for the Private placement memorandum were the directors of the 5 Defendant and not the other Defendants. He said he was not aware that the 4" Defendant was not involved in the Private placement and was only charged because an argument ensued when he went to the. EFCC to explain the private placement exercise. When asked if there was anything wrong with the 5 Defendant using the funds after allotment PW10 said there was no allotment. when cross examined further PW10 agreed that al subscribers were meant to study Exhibit P9 before investing. He said he was not aware if the st* Defendant had been able to hold its annual general meeting but he agreed that the no name was listed on Exhibit P9 as stern 1s CERTIFIED TRUE copyPW41 was Danie! Chukwudozie the chairman of the complainant. He sald he knew the 1 Defendant through his wife as the 1* Defendant's wife and his wife were childhood friends and that the 1* Defendant's wife was also his account officer in Zenith Bank, The 3% Defendant was brought to his office by the 1% Defendant when they came to introduce the 5* Defendant's private placement to him, They told him that the 5" Defendant was doing well and Its shares would be listed on the Stock Exchange within @ month at the rate of NS Per share. He was told that he could purchase 200 million units of shares at N2.85 per share ‘whilst he would need to pay a premium of N.20 on an additional 100 milion units. Pw11 said though he was informed that some of the private placement proceeds would be used 0 pay part of the loans owed. by the 5!" Defendant, he was not informed that the 5” Defendant was indebted to the 6 Defendant. He was however told that the shares were tnderwriten by the 6 Defendant. PW12 said he thereafter Invested a total sum of NESS Millon to buy 300 milion units of shares in the private placement and also paid adeltional Sum of N40 Million for the premium on a 100 milion units of shares. He sad he was told that the N20 was for premium but it was later that he found that the premium was meant for the 1 and 3" Defendants. The total sum invested was transferred to the 6" Defendant by the 1°* Defendant's wife as the 1* Defendant told her he had concluded with PW11. PW11 said that though he was shocked at this, he later signed cheques to cover the movement of money which he did, After the money had been transferred to the 6% Defendant, the 1* and 3” Defendants brought Exhibit 9 to him. The shares were however not lsted within a month ag promised and PW11 said he started putting pressure on the 1 Defendant who said he would talk to the 2% Defendant. The 2"! Defendant then told him that he would get some people to buy back the shares but he did not see the 2™ Defendant again until after the matter was reported to the EFCC. PW11 said he tried to. 0 to the 5™ Defendant's factory in ‘Sagamu but the 2" and 2 Defendants asked him not to 80 as the shares would soon be listed. When nothing happened, he engaged a consultant who told him that he should have checked before buying the shares but he did not do so because he thought he was dealing with People that he knew and that their bank was warehousing the funds of the private Placement as well as underwriting same. He eventually contacted the 5 Defendenes fe 7 GZRTIFIED TRUE COPYlawyer who agreed that they could go to the factory, whilst on the way he was called back to come for a meeting at the 5" Defendant's jora office but he sald they were already on ‘the way, When he got to the factory, he saw the manager who told him that not much was going on in the factory and he was not allowed to inspect the factory and was just looking at old machines from outside. Pwi1 said he then employed People to investigate and he got somebody to go to SEC where he was informed that the 5" Defendant had been asked to bring the required documents but had not done so, therefore SEC could not list the shares. He however still continued waiting since the 5" Defendant had said it wanted to import Machines and he felt that if it was in business, then he could recoup his investment, in 2011 he learnt that the 5" Defendant was to hold its annual general meeting (AGM) in Lokoja and {his was belng done without notifying him. He therefore called his lawyer to go to court to get an injunction to stop the AGM. PW11 said he was still waiting to be invited toa meeting by the Sth Defendant but nothing had been done. He said he wrote a petition to the EFCC that the 5" and 6" Defendants had connived to defraud him, In the course of investigation the EFCC tock all the parties to the 5" Defendant's factory site and it was seen that nothing ‘was working and that the factory had closed down about four or five years before, When asked in whose name the 300 Million units of shares had been Purchased, PW11 sald that he had wanted to bring in people to buy the shares but because of the short time and pressure, the 1* Defendant took his (PW11’s) wife to the 6" Defendant to provide a Tame and several names were written including his wife’s name and names of people he did not know. However the whole responsibility was on him thus he asked that the shares be moved to the name of the complainant, He id he did not employ another person to verify what he was told by the 1 and 3" Defendants because he relied on them and if what they had told him was true the business would still have been viable. He sald it was not true that he had previously purchased shares ‘through the 1" Defendant and that the only shares that hhe had ever purchased through him was that of the 6" Defendant, PW1L agreed under cross examination that he met the 4" Defendant at the EFCC office. He agreed that 22 million u of shares were bought in his name whilst the rest were bought in other names but said all the sharés were bought during the private placement with his money. He sald It was when he was asking for refund of his money that share certificates 18 SERTIFIED TRUE COPY sfwere issued by the 5" Defendant and that the complainant had no choice than to take over the shares since its money was involved. He agreed that he had a lot of professionals working for him but said the 1" and 3" Defendants did not. give him the chance to conduct due diligence on the 5" Defendant's private Placement. He however agreed that he was Siven Exhibit P9 before the shares were purchased. When cross examined by Counsel to the 2 S® Defendants PW11 said that the sult he filed to obtain injunction against the 5® defendant had been struck out. When cross examined by Counsel to the 6" Defendant PW1 ‘maintained that it was the complainant that transferred money to the Treasure Much account in the 6 Defendant with which the shares were bought. The last prosecution witness (PW12) was Omudya Dafinone a chartered accountant who sald he was engaged as a report accountant for the private placement of the 5* Defendant's ‘shares, In the course of this assignment, he audited its financial ‘statements for years 2003- 2007 and also reviewed the Profit forecast together with the assumption to the profit forecast for years 2008-2011, The materials made avallabe to him were the financial report and the profit forecast that had been done by the management. He said he made Projection for increased Profit from N2,449,665.00 in 2006 and N5,386,585.00 in 2007 to N98 Million in 2008 and N291 Million in 2009, This Profit forecast was based on the assumption that after the te placement, the money injected into the 5" Defendant ‘would have been used to buy new machinery and reduce its indebtedness, He said that the ‘forecast could not happen if proper utilization of the Funds was not done and that the job of management was to utilise the funds in the manner specified in thelr record for the best interest of the shareholders. PW12 agreed under cross examination that. his company was engaged to work for the 5 Defendant. He sald he did not test if all the things that had been stated in his report for the 5™ Defendant was true as it was not Possible to test everything and he only carried out Sample tests but he attended the board meeting at the Stock Exchange after the private Placement and as at that time he stood by his report. He sald that in writing the report, his job wes not to do due diligence which [Link] entailed more invest igation. He agreed that sometimes projected profits do not always come out as planned, et x CERTIFIED TRUE COPY 19Upon conclusion of the prosecution's case all the Defendants made no case submissions which were dismissed by the Court and after this the 1* to 5" Defendants led evidence whilst the 6" Defendant rested Its case on that of the prosecuti ‘The 1 Defendant was the 1* defence witness (DW/). He testified that he got to know PW11. through his wife and that although he tried to make PW11 open an account with the 6” Defendant, PW refused saying that he was interested in private placements which DW1 could bring to his attention anytime he saw a good one. Consequent to this DW1 introduced the public offer of shares by the 6" Defendant to PW11 and that of another company called Dufll Prima, In July 2008 the 5" Defendant which was one of the 6" Defendant's customers wanted to raise funds by private placement so DW1 introduced same to PW11. He went with the 3" Defendant who was his boss at work to meet PW11. Exhi it P9 was given to PW1i who said he wanted full allotment of the shares he was applying for and the 3° Defendant told him that he knew a company that could arrange for him to get 100 million Units of shares on preferential allotment based on @ premium of N2.10 per share. The offer was to open on 16" July 2008 but on 16" July, PW11 gave DW1 and the 3 Defendant instructions to debit Treasure Much Limited’s account and signed a cheque to this effect. Prafts of N285 Million and N110 Million were raised from the cheque for the purchase of the shares and for payment of premium to Drillcom respectively. DW said the draft of N285 Million was paid into the 5! Defendant's account on 14" July ‘two days before the offer opened. After the payment, sixteen forms were taken to PW11’s wife and the shares were allotted ‘and DW1 delivered the certificates, Said share certificates were admitted and marked as Exhibits D6 (1-16). DW1 said the only person he dealt with ‘was PW11 and that the persons in Whose names the certificates were issued included Pwia’s wife and children, other names borne by PW14 and his children whilst others were in the names persons he did not know. DW sald he got to know all these when he was arrested by EFCC and PWi1 claimed that he had been forced to acquire the shares of his associates but he was unable to Produce the said associates at the EFCC, After delivery of the share certificates, PW11 called him and: asked if he could help to recover his money, because SEC had made a rule that shares could only be listed atthe price upon which they were Issued and also asked that he talk to Drillcom to return the premium pai 20 GERTIFIED TRUE COPYsaid he did not sell shares to the complainant and he was not involved in the consolidation of the shares to the name of the complainant. He was aware that several other persons including the staff of the 6 Defendant purchased the 5" Defendant's shares none of whom Sota refund of their money. With respect to the N285 Million payment which was alleged to have been used to liquidate the 5" Defendant's indebtedness, DW sald that this was not the case as the 5" Defendant had an overdraft with the bank which was stil operating at the time the cheque was paid in. He said that the N285 Million was the proceeds of a Preferential allotment of 100 million units of shares which predated the commencement of the offer. He said that the major drawdown allowed by the 6” Defendant was the sum of N45 Millon transferred to GTBank and that the facility which had been granted in January 2008 before the private placement commenced was for a 12 month tenor and continued running, He Identified the entries on the account as including the debit of N285 Million based on the 5 Defendant's letter that the sum be moved to the private placement account. There was however another letter from the 5" Defendant that the money should be moved back to the ‘operations account for its use which instruction was complied with by the S" Defendant, Out of the N28S Million, N45 Million was transferred to GTBank on 17 July, N5,490,494.2k used by the 6" Defendant on same day to pay for mature bills for collection. He also identified other withdrawals by the 5" Defendant as including N2.8 Million on 31° July, N4 Million on 7 August, 'N28,300,000.00, N74,740,000.00, N73,750,000.00, N79,600,000.00, N60,800,000.00 and N23,500,000.00. DW said all other proceeds of the private placement were paid into the private placement account including further sums paid for shares by PW11 and his associates. DW4 said the N285 Mi n was payment for the preferential allotment of 100 lion units of shares and the additional shares PW1 and his associates bought amounting to 200 Million units were ‘ot preferentially allotted. He said that in 2008 the allotment of shares of private companies was not regulated by NSE or SEC so the 6" defendant saw the preferential allotment as being a private arrangement between the subscribers and the Si defendant and on the Strength of writing to the bank with the names of the allottees, the 6! Defendant did not object to the utilization of the funds. He said further that in a private placement, the sompany did not need to wait until the end of the offer period before allotting shares. He said that the cheque of N395 Million issued by Treasure Much which instructed eg 2 QERTIFIED TRUE COPYDefendant to raise two drafts of N285 Million and N110 Million in favour of the 5” Defendant and Drillcom respectively were properly issued and signed by the complainant. On 8" September 2008 the amount standing as balance in the private placement account in the sum of N748,000,603.68 was transferred to the 5" Defendant's operations account. WI said it was not true that he spent out of the private proceeds amount or that the 5 Defendant was a dead company at the time of the placement as it was operational and several members of the 6 Defendant's staff Invested in the private placement. When cross examined by the 2" and 5" Defendant's Counsel, DW1 agreed that It was the 6" Defendant that prepared Exhibit P9 but said he could not confirm if it was meant to monitor the money and see that It was spent for the purpose stated in Exhibit P9, He agreed ‘that the 5" Defendant protested vide a letter after the N2&S Millon was ald into its Curent account that same should have been paid into the private placement account. He Sereed that the payment was made by Drllcom and that he was the one who collected the ‘cheque and handed over same to the 3" Defendant who Bave It to Drillcom, He said there NAS an agreement (Exhibit P413) on the preferential allotment which was between Drilleam and the 5 Defendant on one hand and Drillcom and thé complainant on the other hand. He ‘hen agreed that in all private placements the funds must be placed in the placement Sccount, He said it was not stated on Exhibit P9 that the 6” Defendant was the underwriter of the shares. He said all the payments made by the 6! Defendant were in accordance with the purpose of the private placement, He said the 5! Defendant Was no longer indebted to the 6 Defendant and that its overdraft had expired, When asked if N130 Million was Geblted from the account, DW1 said it was not debited but when funds are eid into an account, the account would adjust itself to remove any debit on same. When cross examined by the 6" Defendant's Counsel DW1 said that there was nothing he ‘old the complainant which was not in Exhibit P9 and at the time he handed ‘over Exhibit PS one Mr Williams a chartered accountant was with PW11. He agreed that the 6" Defendant was not involved in the negotiations between Drillcom and the 5 Defendant or Drillcom and the complainant. am SERTIFIED TRUE COPYUnder cross examination by Counsel to the prosecution, DW1 agreed that out of the N978 Million realised from the private placement the sum of N&S5 Million was invested from the ‘Treasure Much account of the complainant and that he also knew that the money paid into Treasure much came from Oozzy Oil and Gas’s account. He agreed that the loan of N130 Million owed to the 6" Defendant was paid after the end of the placement. He agreed that the complainant was not a party to the memorandum of understanding between Drilicom and the 5" Defendant. He sald that apart from PW11 there was no complaint from other subscribers about the non listing of the 5" defendant's shares after the allotment. He agreed that he did not mention in his statements to the EFCC that the reason PW11 reported to the EFCC was due to non refund of his money. He agreed further that the account of the S Defendant had been dormant as at 10" January 2007 before It was reactivated and it was after this that the loan facility of N10 Million was granted to it by the 6" Defendant. DW1 agreed that the debit balance of the 5" Defendant as at 30” June 2008 was Nasi, 144,460.63k and when the cheque of N285,Million was paid in on 14 July the account balance betame N153,855,539.37 credit, He agreed that four other cheques were issued on 15" July by the 5" Defendant and transactions were also done by the 5" Defendant on the account. He said the N285 Million payment was reversed on 16" July but the payments from the account between 14" and 16" July. were not reversed and that the N25 Million was paid back into the account on the same day after the reversal. He said that on 15 October 2008 the sum of 19,950,000 was issued in the name of Drillcom but disagreed that said money was shared by him and other management staff of the 6” Defendant. He agreed that there was nothing on exhibit P9 that spoke about preferential allotment of shares. He agreed that by Exhibit P9 the time,for the 6" Defendant to release the proceeds from the share placement to the 5” defendant was 22™ August 2008. He said the proceeds were not paid until 8"" September when the 6" Defendant paid the N748 Million proceeds to the 5" Defendant and on sald date, the 5" Defendant was indebted to the 6" Defendant in the sum of NS45,801,547.22 and when the proceeds were paid into its account its balance became N202,199,026.64 credit. DW1 said he could not remember if he had attended a meeting with the 5"" Defendant: prior. to the private placement or if the 5” k Nt CERTIFIED TRUE COPY 23Defendant wrote expressing its displeasure that the 6” Defendant did not take up the remaining shares as underwriter. DW2 [Link] 3“ Defendant. He said got to know about the 5" Defendant's private placement when it invited proposals on same from several banks and the 6"” Defendant won the bid for said placement, He said when PW1 was marketed on the private placement he said he wanted guaranteed allotment. DW2 said he then told PW11 that he was a member/financial controller of an investment club called Drillcom and that he could ask Drillcom to enter into negotiation with Nulec to buy the shares for PW11 for which would have to pay him a commission of N1.10 per share for his efforts and PW14 agreed to this. DW2 said he told the 2" Defendant that he had a potential preferential deal for 100 million units of shares and the 2" Defendant agreed to pay him a fee of N19.5 Million and an MOU to this effect was signed between Drillcom and the 5" Defendant, By the end of 2008, share prices were falling and SEC also made a policy that shares could only be sold at the last price at which same were sold. it was at this point that DW2 got a call from DW4 that PW11 was not happy that he might be making a loss. DW2 agreed to speak to other members of Drillcom and a refund of the N100 Million was made. PW21 then said he wanted the money paid for the shares back and a meeting was arranged with the 5" Defendant's officers. The 5 Defendant offered to buy out PW11 over a period of three Years but he insisted on having his money back or that he should be made a director of the 5" Defendant. DW2 said he was invited to ‘the EFCC and when the matter was explained the EFCC asked them to go and resolve it among themselves. At another invitation by the EFCC he learnt that PW11 said he bought shares worth NESS Million which he was not aware of. He however offered to make a refund of the N19.5 Million paid to Drilicom by the © Defendant, He said that although he earlier said the N19.5 Million was shared with other staff of the 6" Defendant, the ‘2% and 3" Defendants were not among those who shared same. DW2 agreed that the cheques for N285 Million and N110 Million were handed over to Drillcom officials and that after the N285 Million was Paid into the 5 Defendant's account on 14 July it wrote that same should be transferred into the private placement account when same opened on 16" July, He agreed that the N285 Million was later moved back to the 5" Defendant's operational account based on the 5" Defendant's written woe R 24 SERTIFIED TRUE copyVide Exhibit P41 in view of the fact that the preferential allotment had been concluded and the 5! Defendant now free to spend the money. He said that the money had only been ‘moved into the private placement account so It could be captured as part of the total Proceeds of the private placement. Under cross examination by the 2 and 5" Defendant's Counsel, DW2 said he was not the 5" Defendant's account officer same was one Wahab Fagbo. He said the 5" defendant was # going concern and that the 6" Defendant was the financial adviser and issuing house for the private placement. He disagreed that part ofthe N285 Millon was used to Pay the N130 Million indebtedness of the 5" Defendant but said same was used at the end of the Placement to pay what the 5" Defendant was owing. He sald that the §!™ Defendant did not know that the sums invested by PW: came from Treasure Much ‘account but it knew about the westors on¢e N28S Million was paid to it and itallotted shares, When cross examined by Counsel to the 6 Defendant, DW2 sald he visited the office of the 5 Defendant in June or July 2008 in relation to the private placement. He no payment was made by the 6" Defendant without the consent of the 5” Defendant. Under cross examination by the prosecution Counsel, DW2 agreed that there was no provision in Exhibit P9 for proceeds of the private placement to be paid to the 2™ Defendant before 22" august 2008. He also agreed that it was on a! September 2008 that the Proceeds in the sum of about N748 Million were remitied to the 5 Defendant's account, He sald the account was already in debit of N548 Million and said payment wiped out the debit leaving a credit balance of over N202 Million. He agreed that by Exhibits D8 and D9, the 6" Defendant agreed to be standby underwriter to the private placement, When re-examingd DW2 said that the 5" Defendant did not allot preferential shares, but allotted ordinary Shares on Preferential basis. The 4" Defendant was the third defence witness (DW). He said he did not play any role in Packaging the priyate placement memorandum but led other officials in making a pitch for the 6" defendant to be appointed as issuing house for the private placement. When the A 25 \ CEATIFIED TRUE COPYoffer of shares closed, same was not fully subscribed and the Issue of underwriting came up with the 5" Defendant asking the 6” Defendant to take up the non subscribed shares. He then had to come in to explain that from the documents avallable, the 6” Defendant did not underwrite the offer as no underwri 1g agreement was executed. DW3 sald he was also one of the subscribers of the shares as he bought two milion units and that after the offer he went on vacation. It was when he came back that he learnt that the 1* and 3% Defendants had been arrested by the EFCC and he was asked by the 6" Defendant to ‘go and expla the whole process to the EFCC. PWi1 did not however take kindly to his explanations and shortly after this he was asked to make statements by EFCC officials who did not give him the opportunity to write freely but were asking him questions and if they did not like the answers he gave they would not allow him to weite same down. In his Statement he mentioned that it was one Emeka Obiareri that handled the transaction and ‘was made to give an undertaking to produce the sald Emeka. DW3 said he had never met PW211 until when he got to the EFCC. Under cross examination DW3 agreed [Link] and other officials of the 6" Defendant attended @ meeting with the one Mr Monty the then managing director of the 5* Defendant. He agreed that the 2" Defendant was not present atthe sald meeting and it was ‘here that terms of the private placement were agreed upon. He agreed that he and Emeka signed a letter in which the 6" defendant agreed to take up several roles including issuing house and standby underwriter but said same was subject to internal approval by the 6" Defendant. He stated that no underwriting agreement was ever executed but agreed that the 6” Defendant had responsibility for the sums in the proceeds account until same were handed over to re 5" Defendant. When cross examined by Counsel to the 6" Defendant, he re-stated that no underwriting agreement was Signed. Under cross examination by the prosecution Counsel DW3 agreed that it ‘was not stated that the agreement for the 6" Defendant to be underwriter was subject to formal agreement. He agreed that other roles that the 6" Defendant accepted to play in the placement were also 26 GERTIFIED TRUE cay”Rot covered by separate agreements. He said that he fled a fundamental rights suit against the EFCC and the complainant which was later withdrawn, The last defence witness was the 2" Defendant (DW4), He testified that the 5" Defendant was a company Involved in sales and Production of electrical appliances and goods. He said that he had held several Positions in same and was its managing director between 1984 and 2007, In 2007 the 5" Defendant decided to raise capltal via private placement of shares to offset its debts and it approached the 6” Defendant to be the issuing house for sald placement. Meetings were held with the 6" Defendant's officials who Included the 1%, 3% and 4 Defendants as well as Emeka Obiareri at which the roles of issuing house, receiving bank and standby underwriter were agreed to be played by the 6" Defendant and the fees to be paid to it also agreed. DW said the role of underwriter ‘meant that the 6" Defendant ‘was take up any shares remaining in case the shares inthe private placement were not fully subscribed, On 14" July prior to the opening of the private Placement, the Sth Defendant noticed that the sum of N285 Million was Paid into its current account and it immediately notified the 6 Defendant of this error and that same should be paid into the private placement proceeds account. Dwa testified further that Exhibit P9 was Prepared by the 6" Defendant and the share price Of N2.85 per share was arrived at based on the value of the shares. The Purpose of the Private placement was to ‘crease shareholders funds for product line expansion, debt reduction and to create working capital, The amount ‘Stated on Exhibit P9 for payment of loans was N415 Million even though the 5" Defendant owed banks around N5OO Million but because it wanted to work with the 6 Defendant, it had to ay off the other banks. The amount owed to local Suppliers was close to N40. Million whilst what was owed to foreign suppliers was around NSOO Million. DW4 said though amount stated on Exhibit P9 for Payment of loans was N415 lon the total amount Indicated in a later page of Exhibit pg for payment of debts ‘was N379,685,259.00. He said that at the upon conclusion of the Private placement exercise, the 5 Defendant was not able to realise the projections or Purpose of the private placement due to shortfall in the proceeds as the 6" Defendant did not take up the unsubscribed shares which amounted to 25% of the shares thus there was a Shortfall of about N350 Million. The 5" Defendant was also indebted to the 6" Defendant ” gentiFiED TRUE COPY 2but was told that its credit line had been suspended, At the end of the private placement, the 6 Defendant transferred the money realised to the 5" defendant's current account and it started to use the mone the account until same came to zero. DW4 said the loan Payment projected in the private placement was N450 Million but the total amount paid from same was N409 Million. He said the amount paid for local supplies was N28 Million whilst that of foreign supplies was N320 Million though what the 5 Defendant had Projected was N495 Million. He said that what was projected as payments to local and foreign suppliers was less than the amount actually of debts owed by the 5™ defendant because the plan had been that the fest of the debts would be paid in the normal course of business. DW4 sai the projections for product line expansion and reserve could not be realised due to shortfall in the underwriting which meant that no money was available to do the sald things. He said It was not true that false statements were made in Exhibit P9 as the figures were carefully studied by the reporting accountant and the 5" Defendant was ‘Optimistic that the private placement would be fully subscribed. He stated that all the foreign suppliers were paid based on the fact that goods had earlier been supplied but the Form Ms had expired because of nonpayment at the right time, However the papers were In order and were revalidated by the banks and the CBN. He said that the S® Defendant was nota dead company and had many employees and bank statements showing that it was ‘ongoing. DWwa sald he first got to know PW11 when he'saw his name on the list of names submitted by Drillcom and PW was among the persons to whom shares were allotted after payment oF N285 Million by Drillcom. When the 5" Defendant noticed the payment of N285 Million Into its current account, it immediately wrote the 6” Defendant to complain about the error and the said sum was credited to the private placement on 16" July 2008 when the private placement commenced. In the course of the placement, the shares were marketed and sold and a final list of investors was sent to the 5" Defendant by the 6" Defendant, The 6! Defendant then paid the proceeds of the shares less Its charges Into the 5 Defendant's Operational account. He said there were about 330 subscribers and the total amount realised from the placement was 1,074,000,000.00. | \= Gaamien tau copy | 28After the allotment, DW4 said he received a call in November 2008 from DW. saying that PW11 was anxious about the status of his investment and the listing of the shares on the Stock Exchange so a meeting was arranged with PW11 at ‘which he was shown all the efforts being made by the 5" defendant with respect to the listing. PW41 however said that his associates who invested were pressurizing him to collect their money back but the s® Defendant said it could not buy the shares back. The 5 Defendant later received a letter from solicitors to PW11 asking that the shares bought by PW11 and his associates be ‘consolidated into the name of the complainant. It replied that this could not be done until after the Stock Exchange had accepted the application for listing and when the sald approval was obtained the shares were ‘changed to the name of the complainant, it was at this point that the 5" Defendant realised that the total value of shares bought by the persons associated with PW11 was 200 million units worth N85S Million which was 20% of the shares of the 5" Defendant, After the private placement, the §* Defendant commenced the Process of listing its shares but it could not recelve SEC approval due to the sult filed by the complainant which prevented it from holding its annual general meeting. He explained that Payment of N25 Million made to his nephew Sasha Israni @5 narrated in the evidence of PW1 was due to the fact that his nephew borrowed the 5! Defendant money Prior to the Private placement. He maintained that the S" Defendant ‘Spent N104 Million from its cash flow on purchasing materials for its factory In Sagamu and other expenses like travelling Costs and salaries. He said the shortfall In the share Subscription which should have been underwritten by the 6 Defendant was N350.4 Million and that the 5 Defendant wrote to Protest about this. The 5" Defendant was unable to embark on ‘the new product line expansion that had been stated in Exhibit P9 due to the failure of the 6” Defendant to underwrite the femalning Shares together with the fact that the 6" Defendant took the N130 Million that was owed to it from the private Placement proceeds. He said that apart from the suit which stopped the AGM of the 5" Defendant, the EFCC also got a court order freezing all the accounts of the 5" Defendant Which order was still in place. He said the s™ Defendant presently had little or no activity due to this ease which started in 2022. Under cross examination by Counsel to the 1°) 3° and 4 Defendants, DW4 said he met the 1" and 3 Defendant several times before the private placement and met the 4" Defendarit ‘wice when he was told that the 6! Defendant refused to underwrite the shares, He said the | 29 | | amatiCieD5" Defendant however dealt principally with Emeka Obiarerl. When cross examined by Counsel to the 6" Defendant DW4 agreed that immediately payment was made for the N28S Million shares, same were allotted and the funds for the shares became the s!* Defendant's property. He agreed that the funds were moved back from the allotment account to the 5 defendant's account based on the 5" Defendant's request. He also agreed ‘hat no name of underwriter was stated on Exhibit P9 though it was written on same that the shares were underwritten, Under cross examination by the prosecution Counsel, DWA said he was one of the founders of the 5" Defendant and was its managing director until 1984 when he left for Switzerland but stil remained on its board and when he came back to Nigeria, he became the chairman Of the 5" Defendant in 2008. He agreed that the Private placement closed in August 2008 but the listing of the shares had not been done up till August 2012 when PW11 got the Court order stopping the AGM. He ‘agreed that the 5" Defendant did not submit its 2009 annual report but said it was the 2012 order that made it unable to submit the 2009 report. He agreed that Exhibit P394E and F were reminders written in 2010 and 2011 by SEC asking for the 2009 audited account but same was not submitted up till the fe the order of injunction was made. He agreed that the amounts Paid as loans from the shares proceeds were higher than the estimated figures in Exhibit P9. He agreed that based on Exhibit P9 it ‘WAS not out of the place for PW11 to believe the shares were underwritten. He agreed that the 6" Defendant recouped the loans it had Granted the 5" Defendant after the placement Proceeds were paid into the 5" defendant's account and that after this it stopped operation of the 5” Defendant's loan fa ity. He agreed that the account of the 5 Defendant was dormant from 2005 till it was reactivated in January 2007 when it applied for and got 130 million overdraft which was the amount by which the account was in debit as at the beginning of the private placement. He agreed that further loans were granted during the Placement exercise such that as at the date the proceeds of the placement were paid into Its account it had a debit balance of NS45 million and When the proceeds were Paid the said debit balance was deducted by the 6" Defendant leaving a credit balance of N202 million, Ne agreed that the remaining sum of N202 milion was used to pay bank debts less 18 million. He said he did not meet the representatives of Drillcom though he knew the 3 Defendant and that the 285 million was deposited Into the 5" Defendant's account by 30! QERtifieD TRUE COPYDrillcom. He also agreed that said payment made the account which was in debit of N132 Million to go into credit and that after this several payments were made on the Instruction of the 5 Defendant. He agreed that when the 5" Defendant protested that the N28s Million should have been paid into the proceeds account the current account was debited by the N285 Million but said amount was credited back immediately and there was no reversal of the expenditure that had been made on the account, He agreed that the shares Pald for with the N285 Million were part of the private placement and that all the information in Exhibit E9 except for the first page came from the 5" Defendant. He agreed that it was stated on Exhibit P9 that he was the CEO of the 5" Defendant. He agreed that foreign suppliers were paid 495 million as opposed to the projected 320 million, He agreed that the response of the 5 defendant to letters by SEC asking [Link] audited accounts was ‘that the delay was caused because the 5" Defendant did not have a managing director. He agreed that all the sums paid to foreign suppliers were wired out during the period of the Private placement and that more than 90% of same was pald to Risa Enterprises. He agreed that Risa Enterprises after these payments sent some money back to the 5" Defendant but. sald same had nothing to do with the private placement. When re-examined a copy of the order made by the Federal High Court was admitted ‘through DW4 and marked as Exhibit D16, Under further cross examination by the prosecution DWw4. agreed that it was not stated in Exhibit D16 that a board meeting should not be held by the 5" Defendant ‘though it was stated that parties should maintain the Status quo. He agreed that Ex! it P394(i) was a letter written by the 5 Defendant to APT Securities and Funds Limited after the order was made and the said letter did not mention the order of injunction as being a reason why the accounts were not ready. Upon conclusion of trial Counsel to all parties filed written addresses which were adopted before the Court. In the addresses, the major issue identified for determination by Counsel was whether the prosecution had proved the charges against the Defendants beyond reasonable doubt. The Court has carefully looked at the addresses and agrees that indeed ‘the major issue’ for determination ts whether the prosecution has proved the charges * GERTIFIED TRUE copy :Sgainst the Defendants beyond reasonable doubt. In MUFUTAU BAKARE V. THE STATE (1987) 3 S.C 4 the Supreme Court stated that: ‘There is no doubt that the burden of proof in a criminal prosecution rests on the Prosecution which alleges the Commission of a crime, It is the casé of the Prosecution who by section 135 of the Evidence Act, Cap.62 that will fal if no evidence at all were given on either side. The standard of proof required is that of Proof beyond reasonable doubt - See ALONGE V. POLICE (1959) 4 F5C.203. Proof beyond reasonable doubt is what Is required to displace the constitutional Presumption of innocence. Thus the question of the standard of proof required fora conviction of an accused person for a crime in respect of which he was charged and being prosecuted is a matter of degree reasonably permissible and Sufficient for holding that the accused committed the offence." Per KARIBI-WHYTE, 1.S.C (Pp. 28- 29, paras. C-B) Here the Defendants have been charged with a series of offences which for convenience will be grouped Into three. The first set of offences charge the Defendants with stealing by Conversion contrary to Section 390 of Criminal Code of Lagos State 2003, the second charge them with publishing false statements contrary to Section 436(b) of the Criminal Code with the final set are the offences of conspiracy to obtain Money by false pretence and obtaining by false pretence contrary to the Advance Fee Fraud and Other Fraud Related Offences Act of 2006. {will start by looking at the offences of stealing, Section 390 provides as follows: ‘Any Person who steals anything capable of being stolen Is guilty of a felony, and is | "able, ifn9 other punishment is provided, to imprisonment for three (3) years. Section 382 defines things which are capable of being stolen and it says every inanimate t thing which is the property of any person, and which is movable is capable of being stolen. . or | SERTIFIED TRUE COPY 32Section 383 states the physical and mental elements of sald offence when it says: person who fraudulently takes anything capable of being stolen, or fraudulently converts to his own “se or to the use of any other person anything capable of being stolen is said to steal that thing. In AYENI v. STATE (2026) LPELR-40105(SC) the Supreme Court per Kekere-Ekun JSC held that “The ingredients of the offence of stealing, which must be proved beyond reasonable doubt are: “() The ownership of the thing stolen (i) That the thing stole: capable of being stolen (iti The fraudulent taking or conversion." See also Adejobi v. The State (2011) 12 NWLR (Pt, 1261) 347 @ 377 C- é, Oshinye v. C.O.P. (1960) 5 $c 105: Chianugo ¥. the State (2002) 2 INVAR (Pt.750) 225." Per KEKERE-EKUN, J.C. (Pp. 25-26, Paras, F-8). The first count alleges that all the Defendants fraudulently converted to their own use, the ‘sum of N285,000,000.00 (Two Hundred and Eighty Five Million Naira) being the Property of Dozzy Olland Gas Ltd and Treasure Much Ltd when they credited the account of Nulee with ‘the said sum to defray its debt owed to Bank PHB Plc and to utilise the balance as against Paying the sum into the private placement account of Nulec for the purpose of buying shares in the private placement account. On the first ingredient which is ‘ownership of the thing stolen, the evidence led by the Prosecution which was not disputed by the Defendants 's thatthe sald sums of N285 Million and N110 Millon came from the account of ‘Treasure Much Limited one of ‘the companies of which PW11 was CEO or alter ego and that the Purpose of sald monies was to buy shares in the 5" Defendants private placement offer of shares as well as to Pay Premium on 100 million units. It was submitted by the Defendants’ Counsel that it was not shown that the money belonged jointly to Treasure Much and Dozzy Off and Gas but | do not agree that it has to be shown that the money belonged to the two companies. I is my view that its suficlent that it be shown that the money belonged to a Person and on this it was shown that that the Money emanated from Treasure Much Umited, it was therefore proved that the money belonged to Treasure Much and this in my. @ CERTIFIED TRUE COPYview shows that the prosecution proved the ownership of the N285 Million, Even If the charge said the money belonged to two persons so long as the evidence showed that same belonged to one person, then this is suffi nt to meet the Ingredient of stealing which Is ownership of the item alleged to have been stolen. ‘The second Ingredient that it has to be proved that the thing stolen Is capable of being stolen. On this its my view that the money falls within the definition of things capable of being stolen as defined in Section 382. ‘he last and most vital ingredient is whether the taking or conversion of the money was fraudulent. On this Section 383(2) says (2) A person Is deemed to dishonestly take or convert the property of another if he does so with: (4) intent to permanently deprive the owner of the property; () intent to permanently deprive any person who has a special interest in the property; (6)intent to use the property asa pledge or a security; (4) intent to part with the property on a condition as to its return which he may be unable to perform; () intent to deal with the property ina manner that it cannot be returned inthe condition it was in at the time of the taking or conversion; or (in the case of money, an intent to use it at his will although he may Intend to repay the owner afterward. i The term “special property” includes any charge or lien upon the thing in question, and any right arising from or dependent upon holding possession of the thing in question, (2) The taking or conversion may be fraudulent, although itis effected without secrecy or concealment, i ‘whether by the person entitled to such right or by some other person for his benefit (3) In the case of conversion, it is immaterial whether the thing converted is taken for ‘he purpose of conversion, or whether it is at the time of the conversion In the Possession of the person who converts it. It is also immaterial that the person who 34 ' @SRTIFIED TRUE COPYconverts the property is the holder of a power of attorney for the disposition of it, or is otherwise authorised to dispose of the property. In this case the undisputed evidence that the N285 Million was meant to have been paid into the private placement proceeds of the 5" defendant, Same was however paid into the perational account of the 5" defendant on 14" July 2008 and the 5" Defendant did write to ask that the money be paid into the proceeds account, Several expenditure were made on the account after the payment of the money but line with the 5" Defendant's letter the money was transferred to the placement account on the 16 July when the private Placement opened. it would have been okay ifthe matter had stopped at the transfer of the money to the proceeds account but the 5! Defendant thereafter requested that the N285 Million be moved back to its account and this was acqulesced to by the 6" Defendant who moved same back immediately and said amount never went back into the private Placement account. It is clear ‘that the N285 Million when. Paid into the account was spent on liquidating the indebtedness of N130 Million to the 6” defendant and other items of expenditure as narrated by the witnesses none of which was reversed when the payment ‘was reversed. A lot was sald by Counsel as to whether the expenditure was done the N285 million with prosecution arguing that it was this money whilst the Defendants said what was Spent was the overdraft funds available to the 5™ Defendant. In my view this point is not important. What is important is that the 5 Defendant asked that the money be moved back to its operational account after having been taken to the private placement account and it has not denied spending or converting same. As agreed to by all the prosecution and the Defendants, this money was part of the private placement proceeds and there was no other offer of shares by the 5 Defendant than the private placement at the relevant time. There was therefore no basis to move the money to the operational account of the s!* Defendant. It was argued by the 1°, 3° and 4" Defendants! Counsel that the shares bought with the N285 Million were allotted ona preferential basis immediately and that there was no need to wait till after the placement exercise closed before the money could be spent. This is however against the tenor of Exhibit P9 the private placement memorandum which stipulated that sums raised from the sale of the shares would be kept in the placement account till after allotment after which shares would be issued and monies retumed to subscribers in case there was oversubscription, shows that the money would not 35 QBRTIFIED TRUE copybelong to the 5 Defendant until after the allotment, The 5" and 6" Defendants who were aware of this condition in Exhibit P9 were therefore wrong in asking that the money be moved to the operational account of the 5" Defendant and the 6*" Defendant was wrong In 50 moving it. | would note further that other than the ipse dixit of the 1, 2™ and af Defendants and the letter written by the 5" Defendant which the Court does not believe as 2gainst the overwhelming documentary evidence in Exhibit P9 that only showed a private Placement exercise for allotment of ordinary shares there was no evidence before the Court that any preferential allotment was done as the only shares on sale were the shares issued in Exhibit P9 and there was nothing about preferential allotment in said Exhibit. The Defendants also agreed that the shares they were marketing to PW14 were the shares 'ssued in Exhibit P9 and not any other shares. Further the certificate of allotments Exhibits PG(1-26) were all issued in November 2008 after the private placement had closed thus its not correct that the shares were allotted during the placement exercise. In AYENI v, STATE (2011) LPELR-4380(CA) the Court of Appeal talking about fraudulent intent stated that: The fraudulent inten’ «» lies in the taking or conversion of the property or thing without claim of tight made in good faith and with knowledge that the thing taken or converted is the Property of another. See CLARK & ANOR V THE ‘STATE (2986) 4 NWLR (PT.34) P.381: BABALOLA, & ORS V THE STATE (2989) 4 [Link]. (PT.115) P.264: YONGO & ANOR V C.0.P (1990) 5 [Link] (PT.148) P.103 and ALAKE & ANOR V THE STATE (1991) 7 [Link]: (PT.205) P.567. See also ONIMISI UKANA (Alias Jaguda) V. G.0.P, BENUE STATE (1995) 9'[Link] (PT.416) P.705 and OKOROJI V. THE STATE (2005) 1 N.C.C, P,279 at P.297. See also UGWU V, THE STATE (2008) LPELR-8533(CA) where the Court of, Appeal stated that: "There ts the legal aphorism that the devil himself knoweth not the intention of man, tntention Is inferred from overt acts. All the circumstances surrounding the action of the accused person, his entire behaviour and his utterances must be taken into consideration.” Per ALAGOA,J.C.A. DP copy ‘ QeRTIFLED TRUEYet entitled to the money the 5" Defendant and the 6 Defendant which acceded to its Fequest had a fraudulent intent to deal with the money In a manner Inconsistent with the wishes of the owner or what they had told the owner that they would do with same, Exhibit P9 Is the document by which the 5 and the 6 Defendants stated how the subscription sums would be dealt with and even though on 22” August 2008 all the ‘sums raised would be paid to the 5" defendant and thus belong to it, this had not yet been done and the date had not yet arrived before it asked that the N28S Million be ‘moved back to its operational Sscount, I can therefore infer that there was a fraudulent intent to deprive the owner of been done. From Exhibits D6(1-16) the allotment of the shares was not done until 6" November 2008 and the 5" Defendant which wrote that it had already made a resolution Defendants were only trying to justify what they knew was wrong. With respect to the 2% Defendant, he was the alter ego of the 5!” Defendant as he was its chairman and Chief Executive Officer at all relevant times and agreed that the st Defendant was the one “i 37 GSRTIFIED TRUE COPYasked that the money be moved to its account, So he is as responsible as the 1®, 3% 5! and 6" Defendants. As regards the 4" Defendant it Is my view that the only evidence shown against him was that he was the one in charge of the department that packaged the private placement. it ‘was not shown that he knew about the Payment of the N285 Million into the operational account or the movement of same back and forth from the proceeds account back to the Operational account. | do not therefore think that the charge of stealing has been proved against him beyond reasonable doubt. Based on the analysis above it is my view that the three ingredients of stealing have been Proved against the 1%, 2°, 3, 5 and 6" Defendants, They are therefore found guilty as charged. The charge not having been proved against the 4" Defendant he i acquitted of count 1. discharged and The 2” count charges the six Defendants. with fraudulently converting the sum of N145 Million which was pald to the 5" Defendant's GTBank account from its account with the 6! Defendant. | must agree with the Defendants’ Counsel that this N145 Million was part of the N285 ‘on since it Is alleged that same was part of the sums spent after the N285 Million was paid to the 5" Defendant's account. | do not ‘therefore think that it is proper to charge the Defendants separately with stealing this sum, The charge is therefore regarded ‘5 not having been proved and all the Defendants are discharged and acquitted of same. The 3% count charges the 1 and 3 Defendants with fraudulently converting to their use, ‘he sum of N210,000,000.00 (One Hundred and Ten Million Naira) being the property of Dozzy Oil and Gas Ltd and Treasure Much Ltd when the sald sum was paid into the account of Drillcom Investment W/A Limited as premiuin charge of N1.20 per share in respect of 100 million shares astde the original N2.85 per share, On this | would abide by my earlier finding that the sums of N10 Million and N285 Million were proved to have belonged to Treasure Much and was capable of being stolen. The next question is whether an intention to steal or fraudulently convert same ean be inferred. On this the evidence is the sum was paid based on the agreement between the complainants and Drillcom that they would assure PW11 of the allotment of 100 million units of shares if he could pay a premium of N1.10 per re 3 QERTIFIED TRUE COPY"The demand for premium was however not openly made as PW1 was not informed by the 1 and 3% Defendants that the 3" Defendant was the controller of Drillcom and that the said premium was thus being paid to the 3 Defendant. PW11 was also not told that there was no need for payment of premium as the 5" Defendant's shares were indeed on offer and there was nothing in Exhibit P9 that precluded sale of any number of shares to an individual. Furthermore PW11 was not aware that at the same time that the 1 and 3 Defendants were asking him to pay premium to Drilleom, Drillcom was also negotiating with the 5" Defendant and entered into an agreement to underwrite the said 100 million units of shares for the 5" Defendant for which it would rec /¢ N19.5 Million as its fee for said underwriting. Drillcom of which the 3 Defendant was arrowhead and which was also known to the 1* defendant was therefore in a position where it was making money from both the. buyer and the seller of the shares without informing them. 1 would note that evidence was led that the N110 Million was refunded by Drillcom when the shares of the 5 Defendant were not listed but the issue is not the refund but whether the collection of same in the first place was not with intent to steal. In my view by collecting money for premium When there was no need for such premium and not disclosing to PW11 that the 3% Defendant was the controller of Drilcom the 1* and 3" Defendants evinced an intention to deprive Treasure Much of its ‘Money. Therefore | find them Guilty as charged in count 3. Counts 4-9 and 11-12 charge the 2” and 5" Defendants with publishing false statements contrary to Section 436(b) of the Criminal Code. Counts 10 and 13 charges all the Defendants with publishing false statements contrary to same Section 436(b) of the Criminal Code, The said Section 436 reads as follows: ‘Any Person who, being a promoter, director, officer, or auditor of a corporation or company, either existing or intended to be formed, makes, circulates or Publishes, or concurs in making, ‘lating or publishing any written statement or account which, in any material particular is to his knowledge false with intent thereby to effect any of the following purposes- 2 To deceive or to defraud any member, shareholder, or creditor, of the corporation or a | SERtifieD TRUE COPY company, whether a particular person or not 39Te Induce any person, whether a particular person or not, to become a member of, oF to entrust or advance any property to, the corporation or company, or to enter into any security for the benefit thereof; is guilty of a felony, and is liable to imprisonment for. ‘seven years, Ie was submitted by the 2™ and 5" Defendant’s Counsel that the 5! Defendant cannot be lable for this offence because it is a company and it was the person whose shares were being promoted. On whether the St” Defendant being a company can be charged | would say that anybody including a company can be a Promoter but | agree with the 2™ and 5” Defendants Counsel that since the 5" Defendant itself is the person about whom the false Statement was allegedly made, then it cannot be charged under Section 436. | therefore hold that the sald charges cannot hold water against the 5'* Defendant, 4S regards the 2% Defendant the undisputed evidence is that at all material times the 2 Defendant was a director of the 5" Defendant and was sometimes its chairman/CEO so counts 4-10 can be brought against him as a director of the 5" Defendant. | will now look at Counts 4-10 one by one to see whether or not the prosecution proved same and/or whether the defences raised by the 2 Defendant can avall him, On count 4 the allegation is that he falsely made a statement on Page 8 of Exhibit P9 that the company would take steps to lst the shares on the floor of the Nigerian Stock Exchange immediately after the Private statement exercise was concluded. In this respect the Prosecution led evidence that after the placement exercise ended, the 5" Defendant did apply for SEC and NSE Approval to list but although it got NSE approval it never got SEC approval because it failed to make its audited accounts for years 2008 and 2009 available to the SEC. The prosecution called PW2 an ‘employee of APT Securities and Funds the company engaged by the 5" Defendant to carry out the Public listing of the 5" Defendant. He narrated all the efforts made by his company with the NSE and SEC for the listing and the fact that several letters were written by the SEC asking the 5" Defendant for the Papers but same were not provided. The 2 Defendant on;his Part sald it was because of an order of . injunction obtained by PW11 that the 5% defendant “did not hold its AGM at which the Secounts must be approved before same could be sent to the NSE. It is my view that the 40 SERTIFIED TRUE COPYYevidence of PW2 showed that the 5" Defendant failed and or refused to submit the audited account in spite of reminders by the NSE and the excuse that it was an injunction that made the 5" Defendant unable to provide the accounts does not hold water because the injunction was obtained in 2012 whilst the placement closed in 2008. Nothing stopped the holding of the AGM between 2008 and 2011 yet the accounts were not made available and the shares could not be listed up tll 2011 when the order of injunction was made. Exhibits P393-395 are the several letters which were exchanged between the 5" Defendant, APT Securities and Funds and SEC. All these correspondence were written between.2008 and 2011, From same written by SEC, the 5" Defendant was the one that failed to make the documents requested for available in spite of reminders to it to do so untia final reminder ‘Wwaswritten in August 2012, See also Exhibit P3294). | therefore hold that the prosecution has Proved count 4 beyond reasonable doubt against the 2™ Defendant, Count 5 Is that the 2 and 5 Defendants published a false ‘statement when they omitted to State in @ material particular at page 7 of Exhibit P9 thereof that an amount more than 31-41% or N415,000,000.00 (Four Hundred and Fifteen Million Naira) of the proceeds would be used for loan repayment. in Exhibit P9 it was stated that the amount of the share Proceeds to be utilsed for loan repayment would be N4I5 Million being 31.30% of the Proceeds. The evidence led however showed that the amount used for loan repayment was In excess of this sum as the 6" Defendant was shown to have received the N134 Million Previously owed to It and when the placement ended it also debited the s* Defendant's account with the sum of NS45,801,577,22 being the indebtedness of the 5! Defendant to the 6" Defendant at the time the placement exercise ended. These two sums were said to amount N676,946,037.85. The 5 Defendant agreed in his evidence under cross examination that the credit balance of N202 Millon that was left from the private proceed Sums were further depleted by payments of debts to Diamond Bank, GTBank, Skye Bank, and FCMB. | would however note that the defence of the 2“. Defendant is that the repayment of the NS45,801,577.22 was done-unilaterally by the 6! Defendant which was ‘the one that debited the account by said payment without the concurrence or agreement of the 5! Defendant. It was stated that the that s® Defendant had a credit line which it expected to continue to enjoy but sald credit line was ‘abruptly terminated by the 6” Defendant once it received the shares proceeds, “Sept ieven TRUE cort 4[n such respect, even though the amounts paid out as loans repayment exceeded what was stated In Exhibit P9, 1 would not say that the 2™ Defendant deliberately published a false statement since the loan repayment of N545,801,577.22 unilaterally debited by the 6 Defendant was made without its concurrence. | would therefore hold that count five was not proved against the 2 and 5" Defendants, Count 6 charge the 2™ and 5" Defendants with ‘omitting to state that an amount more than. 1.876 oF N25,000,000.00 (Twenty Five Million Naira) of the proceeds would be used for local supply payment. On this the 2™ and 5" Defendants agreed that 38 Million was spent on ‘ocal supplies Instead of N25 Million. The Defendants were also sald not to have indicated ‘hat the said sum was payment for debt and not new supplies. | would however note that Exhibit P9 was clear that the figures stated therein were estimates which may not be strictly adhered to and In this respect | do not think the figure of N38 Million is too far from the N25 Million stated. Count 6 was thus not proved. Count 7 is that the 2 and 5" Defendants omitted to state in Exhibit P9 that an amount more than 24.21% er N320,000,000.00 (Three Hundred and Twenty Million Naira) of the Proceeds would be used for foreign supply payment. The submission of the Prosecution is that it was not stated that the N320,000,000.00 earmarked for foreign supplies was actually for payment for debts owed on foreign supplies already made and also that the amount Spent on said foreign supplies was actually 495 Million as admitted by the 2° Defendant tunder cross examination and in one of his statements being Exhibit P28, ‘The prosecution Counsel cited the cases of R VS LORD KYLSANT:1932 23 CR App R 83 and R VS BISHIRGIAN 25 CRAPP R76 in which It was held that omission to state a fact can make a statement to be false. On this I do agree that the failure [Link] that the sums earmarked for foreign Supplies was actually payment for debt already owed on goods supplied is a fraudulent omission. | am of the view that that spending more than earmarked may not be fraudulent 3s the amounts stated in Exhibit P9 were estimates, Nevertheless having failed to indicate that the payments were for debts | hold that the prosecution hhas proved count 7 against the 2% Defendant whilst the 5 Defendant is discharged and acquit ed. hy — SERTIFIED TRUE copy 42Count 8 Is that the 2" and 5"* Defendants omitted to state in a material particular at page 7 of Exhibit P9 that an amount more than 6.2% or N82,000,000.00 (Eighty Two Million Naira) of the proceeds would not be held in reserve. There is no dispute that no amount was held in reserve as stated in Exhi it PS excuse of the 2 Defendant for this is that the 6” Defendant did not underwrite the shares as it had agreed with them thus they had a shortfall of funds. In my view this excuse is not too farfetched thus | would hold that count 8 ‘was not proved. Count 9 Is that the 2 and 5" Defendants omitted to state in Exhibit P9 that an amount more than 9.6% or N104,000,000.00 (One Hundred and Four Naira) of the proceeds would be used for new purchases and miscellaneous. in other words itis alleged that Exhibit P9 did ‘not state that N104 Million would be spent on new purchases and miscellaneous but same was spent by the 2 and 5" Defendants. The 2 and 5" Defendants have not denied that said sum was spent on miscellaneous expenses but their Counsel has submitted that these ExPenses were not a falsehood and were necessary for the day to day running of the 5” Defendant's business and to undertake expenses which overshot the proceeds, it was also Submitted that Exhibit P9 was a mere estimate thus other expenditure not specifically mentioned could be undertaken, | would agree that there was indeed a failure to state that N104 Million or any sum at all would be spent on miscellaneous expenditure. it is my view that when collecting money from subscribers the 2™ and 5" defendants were aware of the fact that people would only put money in a venture they trust thus they clearly stated how the sums would be utilised. in as much as the sald sums were said to be estimates, the 2 and 5" Defendants hada uty to try and be faithful to the expenditure they proposed and not go on a jamboree with other people’s money. | am therefore of the view that they made a false Publication as to how the money would be ‘spent when they failed to include miscellaneous expenses which ‘they now argue is vital to their business. | would also say that even if the complainant cannot be regarded as one of the Persons to whom the publication was made, it is clear from the evidence that the statements In Exhibit P9 were indeed published to Daniel Chukwudozle who was the person to whom the shares were marketed and who put down funds on behalf of Treasure Much Limited. From the cases of R'VS LORD KYLSANT 1932 23 4 CERTIFIED TRUE COPYCR APP R 83_and R VS BISHIRGIAN 25 CRAP R 176 in which It was held that omission to State @ fact can make a statemént to be false, | am of the view that the omission to state that such a large amount of funds would be spent on miscellaneous expenses amounts to making a false statement in Exhibit P9. | therefore find the 2"! Defendant guilty of this count though the 5" Defendant is harged for the reason stated earlier which is that it Is a company and cannot be said to be the one promoting or directing Itself. Count 10 is that all the Defendants being Promoters, directors and/or officers of Nulec industries Limited’s shares ‘Subscription by private placement between June and September 2008 within the jurisdiction of this Court with intent to induce Dozzy Oil and Gas Ltd, ‘Treasure Much Limited and Sir Daniel Chukwudozle to buy the shares of Nulec Industries Limited published a written ‘Statement to wit: a private placement memorandum wherein ‘they stated in a material particular at page 8 thereof that the private placement was underwritten on a standby basis but which statement was to their knowledge false. On this Exhibit P9 clearly stated that the private placement was underwritten which meant that the any shortfall in the share subscription would be taken up by the person who underwrote same. The contention of the 2"! and 5" Defendants is that the underwriting was done by the 6" Defendant and they tendered Exhibits ‘D7, D8 and D9 for this Purpose, exhibit D7is the letter by which the 5" Defendant expressed its displeasure for the 6" Defendant for not underwriting the balance of the unsubscribed shares, whilst D8 was the letter by which it appointed the 6” Defendant as underwriter. Exhibit 09 Is the letter by which the 6” Defendant accepted to play several roles which included that of underwriter, Based on the above it is my view that the 2 and 5" defendants cannot be said to have made a false statement when they said the ‘shares were underwritten. As regards the 6" Defendant however, it agreed to take up the underwriting but knew it Was ot going to do so, Itis therefore my view that in putting its name to Exhibit P9 in which Such a statement was made, then it told an untruth or made a false statement that it knew was not true and or did not believe in. It was submitted that the 6" Defendant cannot be regarded as promoter, director, officer, or auditor of the 5 Defendant based on Section 61 of the Compantes and Allied Maters Act which says tha ep “ & CERTIFIED TRUE COPYAny erson who undertakes to take part jn forming a company with reference to a given Prolect and to set it going and who takes the necessary steps to accomplish that Purpose, Or who, with regard to a proposed or newly formed company, undertakes a Partin ralsing capital for it, shall prima facie be deemed a promoter of the company The key words used in Section 436 however are: “Any person who, being a promoter, director, officer, or auditor f a corporation or company, gither existing or intended to be formed” ‘Thus the word promoter in Section 436 is not limited to a Promoter of a proposed or newly formed company. It applies to someone ‘who is promoting an existing company and who makes circulates, circulates or publishes, or concurs in making, Circulating or publishing any written statement or account which, in any material particular is to his knowledge false, Here even if the 6” Defendant was not the maker of Exhibit P9 it was part of those who were Promoting the sale of the private placement shares and it published or circulated/published Exhibit P9 to PW11, At the ‘time it did this it knew that the shares were Not underwritten yet it concurred in Exhibit Po. being put out to Pw11, With respect to the 1 and 3 Defendants they can also be regarded as promoters of the 5" Defendant for the purpose of marketing the private placement which they knew was not underwritten but purported to be so. As regards the 4™ Defendant | have not been told that he played much ofa role in the marketing so | would hold that it was not proved that he was one of those who published the false information as to underwriting. In sum count 10 was proved against the 1%, 3 and 6" Defendants and they are found guilty of same whilst the 24, 4" and 5" Defendants are discharged and acquitted, Count 12 is that the 2 and 5" Defendants Omitted to state in Exhibit P9 that an amount more than N480,000,000.00 (Four Hundred and Eighty 'on Naira) representing 36.31% of the proceeds would not be used for the product line expansion. In other words: the allegation is that in Exhibit P9 the Defendants stated ‘that N480 Million would be used for 45 CERTIFIED TRUE COPYProduct line expansion but no Kobo was used for same. The 2™ and 5" Defendants did not deny that no kobo was spent on product line expansion but said this was because the shares were not fully subscribed and the 6" Defendant did not underwrite the shares as. agreed, | must say that the 2™ and 5" Defendants who could not spend a kobo on product line ‘expansion, found it convenient to use almost the funds realised from the private placement for payment of debts. Nevertheless | ‘Would concede that the failure to underwrite may have affected their ability to carry out product line expansion. | would therefore hold ‘that this charge was not proved against them beyond reasonable doubt and they are discharged and acquitted of this count. For the same reason | will hold that Count 12 which charged them with stating that the Purpose of the [Link] to add new production facilties for electric kettles, food blenders, free standing cookers and fans was not proved and they are discharged and acquitted of this Count 13 charged all the Defendants with falsely publishing a written statement in which they omitted to state that the loan of N130,000,000.00 (One Hundred and TI Million) owed by Nulec Industries to Bank PHB would not be repaid from the business cash flow of Nulec Industries Limited but stated ‘that the said published loan thereof ‘was to be repaid from the business cash flow of Nulec Industries Limited. On this would hold that the evidence showed that Indeed the loan of N130 ilion had been stated on page 39 of Exhibit P9 as one to be paid from the business cash flow of the 5" Defendant but it was ‘one Of the deductions made when the cheque of N285 Million issued by Treasure Much was Paid into the account of the 5 Defendant before the private placement opened. As regards the 1 and 3" Defendants, it is my view that the 1" and 3” defendants were the hands and yes of the 6” Defendant through which the indebtedness was paid though the role played by the 4" Defendant was not shown. The 6" Defendant who made the actual deduction in Spite of what was stated in Exhibit P9 can also be regarded having made a false statement. For the 2™ & 5" Defendants the deduction appears to have been made with or without their input. | do therefore think they can be ltable for sami ed SERTIFIED TRUE COPY 46,| therefore find the 1°, 3 and 6" Defendants guilty as charged in respect of this count Whilst the 2™, 4" and 5” Defendants are discharged and acquitted, ‘Count 14 charged all the Defendants with conspiracy to obtain the sum of N855,000,000.00 (Eight Hundred and Fifty Five Million Naira) from Dozy Oil and Gas Ltd and Sir Daniel ‘Chukwudozie on the false Pretence that Nulec Industries Limited was in active profit making, manufacturing and trading activities ‘thereby purporting same to be Payment for the purchase of shares of Nulec industries Limited under a Private placement. On this the Court would say that the evidence of. ‘the bank officials called by Prosecution as well as the 2% and 5" Defendants showed that the 5" Defendant was in business though it may not have been in the healthiest state. Count 14 was therefore not proved beyond reasonable doubt against any of the Defendants, The final count is count 15 which charged the Defendants with obtaining the sum of 'N85S,000,000.00 (Eight Hundred and Fifty Five Million Naira) from Dozzy Oil and Gas Ltd on ‘he false pretence that Nulec industries Limited was in active profit making, manufacturing and trading activites. Based on the finding in count 14, 1 would hold that it was not shown that the 5 Defendant was not in active business, thus Count 15 was also not proved beyond reasonable doubt, Im sum the court convicts the Defendants and/or discharges and acquits them as follows: 1. Count 4: the 1%, 2", 3", 5 and 6” Defendants are convicted as charged. 4% Defendant discharged and acquitted. 2. Count 2:all the Defendants are discharged and acquitted of this charge. 3. Count 3: the 1" and 3" Defendants are convicted as charged, 4. Count 4: the 2™ Defendant is convicted as charged whilst the 5" Defendant Is discharged and acquitted. 5. Counts 5 and 6: the 2™ and 5 Defendants are discharged and acquitted. 6. Count 7: the 2™ Defendant Is convicted as charged whilst the 5 Defendant is discharged and acquitted. - . 7. Count 8: the 2™ and 5™ Defendants are discharged and acquitted, 47 APRTIFIED TRUE COPY8 Count 9: the 2™ Defendant is convicted as charged whilst the 5" Defendant is discharged and acquitted, 9 Count 10: the 1%, 3" & 6" Defendants are convicted, The 2%, a!" & 5" Defendants discharged and acquitted. 20. Count 41 and 12: the 2" and 5" Defendants are discharged and acquitted, 14. Count 13: the 1", 3" & 6" Defendants are convicted, The 2, a" & 5" Defendants discharged and acquitted. 12. Count 14 & 15: All the Defendants are discharged and acquitted of this charge, ‘will now listen to allocutus of Counsel before | proceed to sentencing, Cm KA. Jose (Mrs) Judge: 9" December 2019 : Allocutus: by Counsel ‘Mr Obi for the 1* and 3" Defendants: - ‘commend the court for its industry in writing the Judgment. For the 3" and 3" Defendants, itis unfortunate that the found themselves in this Position. | pray to the court to temper justice with mercy. They are gentlemen who have attained credible position in their career. The 1% 3% Defendants are bankers of note and have never been found ‘wanting. | pray the court be lenient in ‘sentencing the Defendants, They are bread winners and first time offenders. | ask that instead of sentencing them they should be given option of fine, ‘Miss Akinmuleya for the 2™ and 5" Defendants: - on behalf of the 2"& 5" Defendants are thanking the court for ‘the industry put into writing the judgment. We Plead with the court fo temper justice with mercy, The 2" Defendant is a first time offender. He is a foreigner who has been doing business [Link] for decades. | urge the court to temper justice with © geqtigiep TRUBCOPYmerey and be lenient in sentencing. | pray that the 2 Defendant be given option of fine. There isa suit before the Federal High Court on the same matter, Mr Katung for the 6" Defendant: - | thank the court for the well-considered judgment. On behalf of the 6 Defendant | pray that the Court be kind on the 6" Defendant which is an artifical person run by individuals and as human being mistakes will be made. | pray that the court consider the 6" Defendant as an employer of labour. | pray the court to be lenient in sentencing. Mr Jacobs (SAN) for the prosecution: - | commend the court for its industry and the sound reasoning of the court. | must say that this is the first judgment of Its kind in this area, | pray for order of restitution. Court: the Court has listened to the allocutus of Counsel but it must say that this is 2 very Serlous matter in which a whole bank was involved. The Court would therefore say that although there is need for leniency, ther: also a need to send a message that this kind of behavior is not right. The convicted Defendants are therefore sentenced ss follows: Count 1: - The 1%, 2™8 3" Defendants are sentenced to a term of 5 years. The 5% 6” Defendant are to pay a fine of N20 Million Naira each. They 5! and 6 Defendants are also to restitute Treasure Much Limited the victim of the erie with the sum of N286 Mion. Count 3: 1"& 3% Defendants are sentenced to imprisonment for a term of 4 years. Count: 4: the 2 Defendant is sentenced to imprisonment fora term of 5 years. Count 7:-The 2 Defendant Is sentenced to imprisonment fora term of 5 years. Count 9:-The 2" Defendant is sentenced to imprisonment for a terms of 5 years. Count 10: - The 18 3° Defendants are sentenced to imprisonment for a term of two years. The 6" Defendant is to pay a fine of N20 Million, eK 49 GURTIFIED TRUE COPYCount 13:~ 1"& 3" Defendants are sentenced to imprisonment for a term of two years, The 6" Defendant is to pay a fine of N20 Million Naira, All of the terms of imprisonment are to run concurrently but the fines are consecutive. er K.A. Jose (Mrs) Judge 9" December 2019 50