The High Court Of Justice of England And Wales has disqualified the Chairman and Editor-in-Chief of THISDAY Media, ARISE News Channel and ARISE Magazine, Nduka Obaigbena, from operating as the director of the company for the space of seven years.
The judgement which was published on British and Irish Legal Information Institute website on Thursday was based on the UK Company Directors Disqualification Act 1986, which the court said Obaigbena had flouted.
The claimant alleged that ‘Nduka Obaigbena (“Mr Obaigbena”) caused Arise Networks Ltd to trade to the detriment of creditors from 31 December 2014 onwards with no reasonable prospect of creditors being paid or of the company avoiding insolvent liquidation. “
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The Claimant represented by Mr Tiran Nersessian, argued that the media company had “£ nil turnover throughout its trading existence.”
The court observed that the company was entirely relying on funding, by way of loans, from associated companies adding” that it had effectively no income or revenue of its own.”
It also found out that even though Obaigbena made efforts to financially sustain the company, the organization had issues with paying its employees.
“In September 2014, the company was late in paying its August 2014 payroll and had attempted to reach some agreement with the employees and then was late in making the promised 50% payment.”
Subsequently, the court stated that in the interest of the public, the Chairman is disqualified in line with the act.
“In particular, despite the lack of any evidence that the position in Nigeria would be changing at some time in the future, Mr Obaigbena continued effectively to trade to the detriment of creditors with the ever increasing liabilities.
“The increase in the liabilities during the period from December 2014 until the liquidation was in excess of £2 million in relation to the unconnected creditors and over £5 million for the connected creditors. “Directors who gamble with the position of the creditors, in the belief that all will be fine in the end, are not acting in the interests of those creditors and are instead taking risks to their detriment. The middle bracket is not in my opinion only for those cases where directors continue to trade for more nefarious reasons.
“ I take into account that with the exception of the unreliability of Mr Obaigbena as a witness on certain aspects set out above, I do not consider this is a case of dishonesty. However, this does not mean that the case is any less serious. The public interest is served in this case, in my judgment by disqualifying Mr Obaigbena for a period of 7 years.”
UK Company Directors Disqualification Act 1986 states among other things, that when a disqualification order is made, a person “ shall not be a director of a company, act as receiver of a company’s property or in any way, whether directly or indirectly, be concerned or take part in the promotion, formation or management of a company unless (in each case) he has the leave of the court.”