NDIC Vows To Appeal N5m Judgment From Investment Tribunal

The Nigeria Deposit Insurance Corporation has said it will appeal the judgment by the Investments and Securities Tribunal, ordering the commission to pay Winners Medical Diagnostic & Research Institute Ltd the sum of N5m.

The amount is said to be the value of 2, 500, 000 units of shares in the 2005 Initial Public Offer of the former All States Trust Bank Plc (now Ecobank Plc.)

Winners Medical Diagnostic & Research Institute Ltd had dragged NDIC before the Tribunal demanding for a refund of its subscription money it paid for the un-allotted shares of All States Trust Bank liquidated by the CBN.

In a judgment that was passed on January 15, 2021 the Tribunal ordered NDIC to pay Winners Medical Diagnostic & Research Institute Ltd the sum of N5m at two per cent interest above the Central Bank of Nigeria Monetary Policy Rate from March 2006 when NDIC took over All States Trust Bank until the full payment of the principal sum.

The Tribunal also asked NDIC to pay the “cost of N500, 000 awarded in favour of Winners Medical Diagnostic & Research Institute Limited.”

The Corporation in a statement argued that the alleged Share/IPO Suspense account does not belong to the Claimant but was created by the defunct bank for its own use.

Apart from that, it claimed that depositors of failed banks must as matter of law be settled first before any other claimants as depositors rank first in the order of priority of claim.

The Investment Tribunal held that it was wrong for the NDIC, to classify or categorise the claim for return money for un-allotted shares regulated by ISA 1999 (repealed and re-enacted as ISA 2007) and SEC Rules and Regulations made pursuant thereto as general credits ranking subordinate to private deposits of the defunct All States Trust Bank, payable only after claims for depositors liabilities have been satisfied.
In the statement, the NDIC said the allotted shares qualifies the claimant as a creditor to the defunct bank as the subscription fee would be treated as money had and received by the defunct bank.

“In fact, to pay the claimant herein as ordered by the Tribunal without following due process as prescribed by law would amount to illegality on the part of the liquidator [NDIC] as it would be a clear violation of the express provision of the laws quoted above.

“The Tribunal also erred when it ordered the NDIC in its corporate capacity to pay the claimant the judgment sum. Any award of damages should be against the defunct bank as it is still a legal entity until dissolved and its name struck out of the register of companies at the CAC.

“In view of the decision of the Honourable Tribunal, which was given per incuriam the Corporation will instruct its solicitors to appeal the judgment to the Court of Appeal,” NDIC stated.