A Federal High Court in Lagos, has dismissed a bankruptcy petition filed against the former Managing Director of Staco Insurance PLC, Dr Sakiru Olanipekun Oyefeso. The court also awarded costs of N50,000, against the Insurance firm that wrote the petition against Oyefeso.

In its statement of facts, Staco Insurance had alleged that while in office, the Managing Director/Chief Executive Officer of the company, Dr Oyefeso obtained unauthorised loans in the name of the company and converted same. He was also accused making illegal expenditures to himself, his relatives and other third parties from the funds of the company.

The company said the alleged irregularities were discovered in the course of the forensic audit carried out by Ernst & Young, and that despite repeated demands for payment, he has failed to pay, and as at the date of filing the Petition, he owed the company N575,943,276.70.

Consequently, the company as the creditor, urged the court to issue an order declaring Oyefeso bankrupt. The creditor also sought an order directing that all assets, interests, and his holdings, either held personally or through third parties and privies, be liquidated and the proceeds applied towards off-setting the debtor’s debts, particularly the sum of N575,943,276.70. An order divesting Oyefeso of all shares, interests and holdings in all public and private companies. It also asked for an order of perpetual injunction, restraining him from taking up appointment as a Director in any company in Nigeria.

However, Oyefeso denied all the allegations. He stated that he had for 25 years invested and dedicated himself to the company, as the founding Managing Director and shareholder. He denied that he was indebted to the company. He asked the court to dismiss the suit, on the grounds that all the allegations against him were false, contrived and biased.

He tendered and relied on a forensic report conducted on the company by the National Insurance Commission (NAICOM).

Oyefeso said that the funds that the creditor alleged were loan, were monies he personally provided to the company in order to facilitate its business when required, and that the supposed loans were repayments by the company to him as reimbursements.

He explained that some of the alleged unauthorised payments were deferred benefits he was entitled to, and subsequently approved for payment by other Directors, and for which other Directors were similarly compensated. He told the court that all the allegations were trumped up charges made against him, as a conspiracy to remove him as the MD/CEO of the company at all cost.

His Lawyer, Mr Seni Adio, SAN, while asking the court to dismiss the suit, argued that the company has no grounds to have his client declared bankrupt.

In his judgement, Justice 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 in Section 1(1)(a)(I) of the Bankruptcy 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 costs of N50,000 in favour of the debtor.”