Lafarge Fails to Stop Suit against Sale of Shares to Chinese Firm

Alex Enumah in Abuja

Efforts by Lafarge Africa Plc to stop the hearing of a suit seeking to stop its planned sale to Huaxin Cement Limited, a foreign company based in China, has hit a brick wall, following the dismissal of its motion challenging the jurisdiction of the court to hear the matter.

Besides dismissing the motion for being incompetent and lacking in merit, Justice Lewis Allagoa of the Federal High Court, Lagos, made an order directing the joining of interested parties, in the suit filed by Strategic Consultancy Limited.

The plaintiff, a Nigerian company and Shareholder in Lafarge dragged the cement company to court over its planned divestment of 83.8 per cent majority shares held by its parent company in the Nigerian cement industry.

Lafarge, which is listed on the Nigerian exchange, acquired 83 per cent of the total shares of three federal government-owned cement companies during the privatisation exercises of 2001 and 2002.

The company had informed the Securities and Exchange Commission (SEC) of an internal restructuring by Holcim Group, the Swiss firm that holds 83.81 per cent of Lafarge Africa’s issued share capital.

Besides Lafarge, other respondents in the suit are; Holcim Group, SEC, and the Central Securities Clearing System (CSCS).

The plaintiff predicated the legal action on the grounds that the sale of Lafarge was done surreptitiously without affording it and the other minority shareholders the opportunity to acquire the shares.

It also argued that the purported sale to a foreign company that is not registered in Nigeria runs foul of regulations and statutes such as the Companies & Allied Matters Act, 2020, the Securities & Exchange Act and the Nigeria Investment Promotions Act on the right of minority shareholders and prohibition of transactions with unregistered foreign entities.

Responding, Lafarge had filed filed a Notice of Preliminary Objection, challenging the jurisdiction of the court to entertain the matter.

Delivering ruling in the motion on Thursday, Justice Allagoa, after hearing the submissions of Dr D.A. Awosika (SAN) counsel for the Plaintiff and Babatunde Fagbohunlu (SAN) counsel for the 1st defendant and Uzoma Azikiwe (SAN) Counsel for the second defendant, dismissed the preliminary objection by the defence team that the court lacked jurisdiction to entertain the suit.

“The 1st and 2nd defendants’ motion objecting to the Court’s jurisdiction is hereby dismissed”, Justice Allagoa ruled.

The judge also ordered that Caricement BV, Netherlands, and Associated International Cements Ltd, England, which the respondents claimed owned the shares be joined as 5th and 6th Defendants respectively. 

On the third ruling, Justice Allagoa granted the prayer of the prosecution counsel for leave to serve the two new parties court proceedings outside of jurisdiction.

“It is hereby ordered that the persons sought to be joined herein and hereby joined as prayed and leave to issue and serve the Originating Summons out of jurisdiction is hereby granted,” he stated.

The matter was further adjourned to June 11, 2025, for continuation of proceedings.