Court Dismisses Bankruptcy Suit Filed Against Ex-Staco Insurance Boss

A Federal high court sitting in Lagos south west Nigeria, has dismissed bankruptcy petition filed against, the former Managing Director of Staco Insurance PLC Dr. Sakiru Olanipekun Oyefeso, the court also awarded a cost of N50,000 against the insurance company and in favour of Dr Oyefeso.
The insurance company had filed petition with application for insurance of Bankruptcy notice, notice of Bankruptcy and an affidavit of truth of statement in the petition. Attached to the petition are, Audit report of the creditor, Starco Insurance PLC by Ernst& young titled “Project Valentine dated June 2018 and A letter of demand from the solicitors of the creditor dated 30 November, 2018 demanding for the payment of certain sums of money to the Insurance company, while on the 18th

November, 2019, Dr. Oyefeso’s counsel Barrister Seni Adio SAN filed counter affidavit exhibiting various documents; and a written address.

In its statement of facts, Staco Insurance alleged that Dr Sakiru Olanipekun Oyefeso was at all time the Managing Director/Chief Executive Officer of Staco Insurance company, that while in office he obtained unathorized loans in the name of the company and converted same; that he illegally made certain expenditures to and on behalf of his relatives, family members and other third parties from the funds of the company.

The company further alleged that Dr. Oyefeso made some payments to himself without due authorization of the company. These were discovered in the course of the forensic audit carried out by Ernest &Young,and that despite repeated demands for payments, he has failed to pay and as at the date of filing this petition he is owing the company N575,943,276.70.

Consequently, the company as the creditor is urging the court to issue an order adjudging Dr. Sakiru Olanipekun Oyefeso, bankrupt.

The creditor is also seeking for the following orders directing that all assets, interests, and his holding either held personally or through third parties and privies be liquidated and proceeds applied towards off-setting the debtor’s debts particularly the sum of N575,943,276.70.

An order divesting the debtor Dr. Sakiru Olanipekun Oyefeso of all shares,interests and holdings in all public and private companies.

An Order of perpetual injunction restraining Dr. Sakiru Olanipekun Oyefeso from appointment as a director in any company in Nigeria.

However, Dr Oyefeso denied the allegations against him. He stated that he has for 25years invested and dedicated himself to the company as the founding Managing Director and shareholder.He denied that he is indebted to the company; that all the allegations against him are false,contrived and biased.He relied on a forensic report by the National Insurance Commission (NAICOM) conducted on the company titled “Project Xenon”.

Dr Oyefeso said that the funds that the creditor alleged as loan are monies he personally provided to the company in order to facilitate the company’s business when required; that supposed loans are repayments by the company to him as reimbursements; that the Project
Valentine report made by Ernest & young was based on contrived false statements and one sided information provided by the company to Ernest & young;that the report clearly shows that all the transactions in question were co-signed and approved by other Directors of the board of the company.

Some of the alleged unauthorized payments are deferred benefits he was entitled to and subsequently approved for payment by other Directors and for which the other Directors were similarly compensated; that all the allegations were trump up charges made against him as a conspiracy to remove him as the MD/CEO of the company at all cost.

In his submission,Dr.Oyefeso’s counsel Mr. Seni Adio argued that by the provision of section 1(1) of the bankruptcy Act, the company must establish that Company has obtained a final Judgement or order against Dr. Oyefeso in this matter or any other matter; he has not committed any act of bankruptcy and that the company has no grounds to have the alleged debtor declared bankrupt Consequently, Mr Adio urged the court to dismiss the petition.

In his judgement,the presiding Judge Nicholas Oweibo said “In this case, there is an allegation by the Creditor (Staco insurance) that the Debtor Dr. Sakiru Olanipekun Oyefeso is indebted to it in various sums. acts of bankruptcy which will entitle a creditor to file a petition are listed out in section 1(1)(a)(I) of the Act. Looking at the evidence as given by the Creditor, it is not the case that the creditor has obtained any judgement or final order against the Debtor for the payment of the amount in issue. This case cannot fit into paragraphs (b)-(h) of section 1(1) of the act.

I am however of the opinion that it is not sufficient to make the allegation; there must be evidence to support same. Going by the allegations made against the Debtor, it cannot be said that the acts of the debtor would constitute a debt in the true sense.

The picture of the activities of the debtor painted above cannot in my mind constitute a debt.
I am not satisfied that there exists a debt or that the debtor committed acts of bankruptcy to entitle the creditor to reliefs sought. The petition is accordingly dismissed. I award cost of N50,000 in favour of the debtor.