Between First Guarantee Pension, Chidi Duru and PENCOM

The recent arrest and on-going prosecution of former House of Representatives member, Nze Chidi Duru, who have insistently claimed lion’s share in the First Guarantee Pension Limited, has introduced a dangerous dimension to the Pension administrator management. Iyobosa Uwugiaren, who have been following the issue reports

The contentious role played by former House of Representatives member, Nze Chidi Duru, in one of the thriving pension administrators in Nigeria today, the First Guarantee Pension Limited (FGPL), recently took a treacherous dimension.

Duru along with his lawyer, Mr. Smart Iheazor, were recently arraigned before a Chief Magistrate’s Court in Tinubu, Lagos, by the Zone 2 Command, Nigeria Police Force, Onikan, Lagos, for alleged stealing. They were charged with four counts bordering on conspiracy, stealing, breach of peace and impersonation.

They were alleged to have conspired and committed the offences on January 11, 2017, when they, in company of ‘’other suspects still at large’’, invaded the head office of the First Guarantee Pension Limited (FGPL) office with intent to forcefully take over the management and assets of the Pension Fund Administrator (PFA).

They were also alleged to have carted away some valuables belonging to the company. Duru and Iheazor, lawyers of 28 and 30 years at the Bar, respectively, allegedly committed the offences at No. 65, Kudirat Abiola Way, Oregun, Ikeja in Lagos. Both defendants, however, pleaded not guilty to the offences.

Before the arraignment for suspected criminal offences, counsel to the accused, Emeka Etiaba (SAN), had informed the court that one of his clients, Duru, was at the point of slumping in the courtroom, having just been discharged from the hospital same morning from where he was bundled to the court.

But the prosecutor objected, noting that the doctor at the police hospital, where Duru was admitted, had certified him (Duru) fit. Magistrate Adefulire, after listening to both counsel, ordered the defendants to take their pleas.

Thereafter, counsel to the defendants persuaded the court to grant the accused bail on self-recognition, noting that both were senior lawyers, while Duru was a former member of the House of Representatives. He added that their offences were bail-able.

The prosecutor, however, objected to the bail on self-recognition insisting that they should be given sureties as they reside in Abuja, not Lagos. The magistrate granted the accused bail in the sum of N500, 000 each with one surety each in like sum. The matter was adjourned till March 9, 2017 for trial proper.

Duru was arrested and detained by the police on January 13, 2017 for certain alleged offences.

The seeming current crisis narrative of FGPL started on August 12, 2011, when the apex regulatory agency of pension administrator, the National Pension Commission (PenCom), took certain regulatory measures on FGPL, based on the findings of the various routine and special examinations undertaken by PenCom on the PFA in 2007, 2008, 2009, 2010 and 2011.

The examinations were said to have revealed persistent breaches and flawed corporate governance practices. Indeed, the report of the special examination carried out in March 2011, among other things, allegedly indicted Chief Orlando 0. Ojo, the erstwhile Chairman of the PFA; Chidi Duru, the erstwhile Vice Chairman of FGPL, and Mr. Derrick Roper, an erstwhile director of the company, representing the interest of Novare Holdings (Pty) Ltd of South Africa, for violations of the Code of Ethics and Business Practices, the Code of Corporate Governance for Licensed Operators issued by PenCom, the provisions of the Pension Reform Act (PRA) 2004 (which was in force at that time) and other laws of the land.

‘’In view of the grave implications of the above infractions and in order to protect the pension assets, which at that time was worth over N40 billion being managed by the PFA on behalf of over 160,000 Retirement Savings Account holders, PenCom took regulatory actions on the three indicted directors by removing them from the Board of the PFA pursuant to the provision of Section 88(2) of the PRA 2004’’, the regulatory agency had stated.

‘’Furthermore, pursuant to Sections 20(i) and 21(j) of the PRA 2004 and Framework for the Resolution of Failing Operators, PenCom set-up an Interim Management Committee (IMC) to superintend over the affairs of the PFA until the shareholders convene an Emergency General Meeting (EGM) and re-constitute the PFA’s Board.’’

THISDAY findings revealed that as at today, several cases instituted following the intervention in FGPL were still pending before different courts of law, and following this the shareholders of FGPL have not been able to reconstitute the PFA’s Board.

The Isa Aremu-led interim management committee set-up by PenCom, remains in charge of the management of the PFA. For now, there appears to be a deadlock regarding the resolution of the disputes among the shareholders, and between a category of the shareholders and PenCom.

Legal Battles

Arising from the regulatory intervention in FGPL, different suits are currently pending before the Federal High Court and the Court of Appeal respectively: an appeal filed by PenCom before the Court of Appeal against the judgement of the Federal High Court (FHC) in Derrick Roper & Anor vs. National Pension Commission & Anor. The Applicant in this case (Chidi Duru) had alleged that he was not heard before the decision to remove him was made by PenCom and the FHC entered judgment in his favour. This appeal is still pending. While the case was pending, the Office of the Attorney-General of the Federation, who was also a defendant in the case, filed an appeal against the decision. The two appeals have now been consolidated by the Court of Appeal.

There is also an appeal filed by Chief Orlando Ojo and Nze Chidi Duru against the judgement obtained by the PenCom in a case they instituted in the Federal High Court, Lagos, challenging their removal as directors of First Guarantee Pension Limited. The Court of Appeal recently dismissed this appeal and entered judgement in favour of PenCom. They have now appealed the decision to the Supreme Court.

Another case is an appeal filed by Chief Ojo and Chidi Duru against the judgement obtained by PenCom in a case they instituted in the FHC Lagos, challenging the commission’s power to set up an interim management committee for First Guarantee Pension Limited. The Court of Appeal recently dismissed this appeal and entered judgement in favour of PenCom. They have now appealed the decision to the Supreme Court.

A case instituted by some shareholders of FGPL led by Alhaji Kashim Imam, against other shareholders of the PFA and the commission seeking an order to compel the commission to implement the report of the special examination of First Guarantee Pension Limited, is also pending in court. An interlocutory appeal was filed at the Court of Appeal by Counsel to Derrick Roper. The counsel had challenged the choice of procedure announced by the trial Judge to hear the substantive matter alongside the objection they filed.

The Court of Appeal recently struck out the application and the Appellant’s Counsel re-filed the application and sought for extension of time to regularise the appeal processes. Both the interlocutory appeal and the substantive case are still pending.

A shareholder, Alhaji Kashim Imam had applied and obtained an order from the Federal High Court, Lagos for the PFA to hold an Extraordinary General Meeting (EGM), in a suit no. FHC/L/CS/145/2012—Alhaji Kashim Ibrahim-Iman vs First Guarantee Pension Limited. The order for the EGM was set aside upon the application of Chief Ojo and Chidi Duru. The Applicant had filed and served notice of appeal against the ruling.

Chidi Duru, BP Outsourcing Limited, Grand Towers Plc and Arthur Ogbulefu, representing Genoou Concept, have also filed an action against FGPL and the Corporate Affairs Commission (CAC). The action seeks to challenge the implementation of the commission’s share verification and audit review on the basis that it was an outcome of the Target Examination Report on FGPL, the use of which had been restrained by the orders of Justice D.U. Okorowo in the suit filed by Derrick Roper against the Commission at the Federal High Court. The case is still pending.

THISDAY further gathered that following representations to the Attorney-General of the Federation/ Minister of Justice on the matter, the latter had referred the aspects of the report of the Special Examination of FGPL that relate to allegations of crimes against Chief Ojo and Chidi Duru, to the Economic and Financial Crimes Commission (EFCC) for investigations and appropriate action.

More so, the Nigeria Police Force had also undertaken and concluded investigation as it relates to the criminal aspects of the matter, such as obtaining fake expatriate quota, forgery of signatures and diversion of FGPL’s equity capital. In this regard, one of the actors, Chidi Duru, has been arraigned by the police and standing trial before a Chief Magistrate Court in Abuja. And Duru had filed an application at the Federal High Court Abuja seeking to restrain the Nigeria Police from prosecuting him and his siblings for alleged forgery of signatures and diversion of FGPL’s equity capital.

Mr. George Ozodinobi, an ex-Director of FGPL, also working in concert with Nze Chidi Duru, had written a petition to the National Assembly Committee on Public Petitions in June 2016. ‘’At the appointed day of hearing the petition, the commission appeared but the petitioners did not show up. Consequently, that stalled the hearing of the petition which appears to have been abandoned by the petitioners’’, an insider in the matter told THISDAY.

Attempts to Resolve the Matter

Insiders told THISDAY that there had been several efforts made by different parties to the cases to resolve the contentious issues. For example, the then South African High Commissioner to Nigeria, J. N. Kingsley Mamabolo, had met with the management of PenCom on October 17, 2011, and was availed with copies of the commission’s internal documents and reports, which gave him a comprehensive insight into the issues involved in the regulatory intervention in FGPL.

The then High Commission had also brokered meetings between representatives of Novare Holdings and the other shareholders of FGPL with a view to resolving the disputes amongst them. This effort has not yielded any positive result.

It was further gathered that in 2013, PenCom was informed that Novare Holdings Limited and some shareholders of FGPL, who are the principal parties to the other pending court cases surrounding the regulatory intervention in the PFA, were meeting to settle the issues in order to pave the way for the amicable resolution of those cases and by extension, the subject matter of the regulatory intervention.

According to one of THISDAY sources who spoke in confidence, ‘’There was an all-parties meeting on March 5, 2014 during which parties agreed to distinguish and segregate the issues between the shareholders inter se and between Novare Holdings (PTY) Ltd and PenCom.

‘’The interest of the directors/shareholders of FGPL was on settlement of the commercial terms. On the other hand, the issue between PenCom and Novare Holdings (PTY) Ltd was on the feasibility of granting an administrative concession and/or compromise on the regulatory concerns.’’

The source added that the position of PenCom has consistently been that it was not averse to settlement by the principal parties in FGPL provided that they concede the issues relating to the statutory powers to conduct investigation as well as accepting as valid and proper, the procedure adopted by PenCom in the Special Examination conducted in FGPL.

‘’Novare/Roper demanded at the meeting that PenCom should administratively issue to them a letter of comfort to neutralise the findings of the Target Exams against them’’, the source stated.

‘’They promised in return to concede the appeal in favour of the Commission and to also finalise the settlement of commercial terms with the other shareholders of FGPL. However, PenCom agreed to issue the Letter of Comfort on the basis of Novare’s status in the Report of the Review of Shareholding Structure of FGPL.

‘’The report indicated that Novare Holdings only made deposit on account for shares, which technically means that they were not shareholders ab initio and, therefore, ought not to have been directors of the PFA.’’

“Counsel to Novare/Roper, according to investigations, had insisted that their clients would accept only a “Letter of Comfort”, which states that PenCom has “determined that Novare Holdings (Pty) Limited and/or Derrick Roper have not been responsible for any wrongdoings, mismanagement or illegality whatsoever in relation to the affairs of First Pension Guarantee Ltd”.

PenCom was said to have declined to issue a “Letter of Comfort” in this format, and consequently, the settlement talks between Novare/Roper and the other shareholders, as well as that between them and PenCom collapsed. The pending litigations therefore continued.

Current State of Affairs

The issues on FGPL have persisted since 2011, and have crisscrossed many bounds, from civil litigation to criminal investigations and subsequent prosecution. These cases were said to have affected the relationships between the shareholders of FGPL, the erstwhile and subsisting directors of FGPL and staff and present management of the PFA.

‘’It was becoming apparent that the prolonged impasse would, generally, further degenerate the condition of the operator and endanger the safety of the pension funds in the management of the PFA’’, one of the shareholders stated, while justifying the intervention of PenCom.

‘’It appeared that the rigidity of Novare/Roper and their Counsel at the tail end and critical point of the last settlement talks allowed a golden opportunity of resolving the crises in FGPL to slip away/.

‘’The parties failed to take advantage of the all-encompassing discussion, involving both shareholders and the regulator, all willing and in fact made concessions from their earlier hard-line positions.’’

To be sure, a faction of the shareholders led by Hon. George Ozodinobi, was said to have demanded for an Extraordinary General Meeting of the FGPL pursuant to the provisions of CAMA, after their request to the Board of Directors to call for the meeting.

The meeting was held on March 29, 2016, during which they purported to have removed the Chairman, Alhaji Kashim Imam, and replaced him with Hon. Izodinobi with two other persons as directors.

But the PenCom was said to have communicated its position to the effect that the purported change of members of the board of directors of FGPL was null and void as it was in contravention of the subsisting court order for stay of execution pending the determination of the appeal in PenCom Vs. Derrick Ropper & Ano.

Messrs Derrick Ropper and Novare Holdings instituted on May 26, 2016 a new suit before the Federal High Court, Lagos seeking for a declaration that all actions taken subsequent to decisions reached at the meeting of the March 29 2016 was null and void.

It was in this bearing that the police saw the recent action of Chidi Duru and his lawyers as criminal.