Stanbic-IBTC Financial Report: High Court Stops FRCN From Sanctioning KPMG
Justice Ibrahim Buba of the Federal High Court in Lagos has restrained the Financial Reporting Council of Nigeria (FRCN) and its executive secretary and CEO, Mr. Jim Osayande Obazee, from taking any action, sanction or measure against KPMG Professional Services and Mr. Ayodele Othihiwa, a Partner in the firm, pending the hearing and determination of the suit filed by the applicants.
The interim order of the court granted Friday was sequel to an application argued before the court by Barrister Chuka Ikwuazo from the law firm of Aluko and Oyebode, urging the court to restrain the respondents from taking any sanction and also order an accelerated hearing of the suit, now fixed for 12 November, when the respondents must have been served all the ‘originating processes’ in the matter.
The interim order was the second granted by the court against the FRC, within 48 hours. On 4th of November, Justice Buba also ordered the FRC to maintain the status quo in a related case filed by StanbicIBTC. The case is now pending before the court.
KPMG and its Partner had filed an application for the enforcement of their fundamental rights following the FRC letter of 26 October 2015, which it called a final notice and its ‘regulatory decision’ conveyed in another letter of 30 October, on the financial statements of StanbicIBTC Holdings Plc for 2013 and 2014.
KPMG and Othihiwa contend that the FRC decision was published and issued without informing or notifying them of the nature of the allegations made against them and inviting them to respond to the allegations.
FRC decision, KPMG and Othihiwa claimed not only violated their constitutional right to fair hearing but also Section 62(2) of the Financial Reporting Act, which spells out the procedure to be adopted by the FRC in investigating a professional body for any ‘complaint or dishonest practice, negligence, professional Misconduct or malpractice’.
KPMG and Othihiwa further claimed that even where the Technical and Oversight Committee had ratified the decision of the FRC, the FRC had failed to exhaust the provisions of its own law, by allowing them to exercise their right of appeal to the Technical Committee and by subjecting its decision to the approval of the FRC board.
“In effect the respondents purported to make and they seek to enforce the aforesaid ‘regulatory decision’ at a time when the statutory means of recourse stipulated under the Act does not exist”, KPMG and Othihiwa stated in their application.
KPMG and Othihiwa in asking the court for accelerated hearing averred that they have been greatly affected and have the potential of suffering greater loss of business opportunities and turnover of business, as a result of the action of the FRC, which they consider unfair, ultra vires and a breach of their fundamental rights to a fair hearing
Justice Buba has adjourned till 12th November, 2015.for the hearing of the motion for interlocutory injunction.