A Business Gone Sour
By Anza Philips-Abuja Bureau
Monday, February 21, 2005
Four former commissioners in Ondo State taken to court over an alleged plan to take over a company they jointly own with a foreign firm
A business deal worth $9 million (about N276 million) between Sphinx Development International, a U.S-based firm and the Ondo State government has not only gone sour, but has been a subject of litigation at the Abuja high court. The Ondo State government and four of its former commissioners and five other persons have been dragged to court by the foreign firm over alleged attempt to kick it (firm) out of the business deal which the government and the firm entered into during the Adebayo Adefarati administration in 2001.
The firm, based in Dallas United States of America had entered into an agreement with the erstwhile government of Adefarati with the sole purpose of establishing a factory in the state to manufacture prefabricated panel for buildings.
In furtherance of the agreement, Alpha 3D Limited was registered at the Corporate Affairs Commission solely to conclusively realise the state dream of manufacturing the 3D panels in the state.
Subsequently, officials of the Ondo State government undertook the tour of Alpha 3D factory in Austria with officials of Sphinx.
It was then agreed that the plaintiff would be entitled to 51 percemt of the shareholding in the Alpha 3D Company Limited while the Ondo State government was to take 32 percent. The rest of the investors were to share the remaining 17 percent.
The various parties to the agreement kept to the agreement until November 2003. According to the statement of claim, Sphinx alleged that the Ondo State government acting in concert with another company, Golden Homes Builders Ltd. started perfecting plans to deprive it (Sphinx) of its rights and benefits as a shareholder and co-owner of the Holden Company Alpha 3D Limited. The Ondo State government was alleged to have, on April 2004, unilaterally gone further to invite the parent company in Austria to send its technical experts to Nigeria without delay to assess the current status of the site of the factory preparatory to the installation of the said equipment without the consent of Sphinx Ltd.
Ondo State was alleged to have equally moved to ensure that the Corporate Affairs Commission reflected the new status of the holden company, which makes Ondo State government its sole owners.
In an originating summons lodged at the registry of the Federal High Court, Abuja, Sphinx is asking for 18 different reliefs among which is that their original shares of 51 percent should not be tampered with either by the Corporate Affairs Commission or the Ondo state government.
The firm also demanded that having put so much in the venture, the court should protect them from organisations and institutions that were determined to do them in.
The former public officers named in the suit are Wumi Adegbonmire, former secretary to the Ondo State government during the governorship of Adefarati, Dele Ogedengbe, former attorney general during the administration, Segun Ojo, former commissioner for Finance, and Korede Duyile, former commissioner for commerce. Each of these commissioners was said to be holding illegally 7.5 million shares in the company. The five others are the Corporate Affairs Commission, CAC, Golden Holmes Builders, the incumbent attorney general of Ondo State, Alpha 3D Limited, and Entwicklungund Verwertungs Gesellschaft MBH, simply refereed to as EVG.
When the case first came up for hearing on January 20, this year. Adetokunbo Kayode counsel to the defendants urged the court to strike out the suit or in the alternative transfer the suit to Akure division in Ondo State. But Etigwe Uwa, counsel to the plaintiff objected to the submission of the defendant counsel. Citing authorities to support his argument, Uwa said that where two or more defendants were resident in a particular judicial division, the case could be heard there. He then said the Corporate Affairs Commission and Golden Homes Limited were Abuja-based and so the case could be heard in Abuja.
Justice Stephen Adah, in his ruling in the case, said though action could be commenced either in Abuja or Akure based on the evidence before the court to the effect that some of the defendants were resident in Abuja, he nonetheless transferred the matter to Akure for reasons of convenience.
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