Osazuwa Osayi and Osayimwense Uyi, the owners of Agropartnerships and Farmforte, have been fined N1.2 million for running an illegal investment company.
In a case brought by the Securities and Exchange Commission (SEC) against them on February 28, 2022, but modified on January 20, 2023, a five-member panel of the investments and securities tribunal meeting in Abuja on June 8, 2023, imposed the punishment.
After investors in the firm’s investment packages publicly accused the companies of failing to pay them their returns in January 2022, the SEC accused the companies and the founders of utilizing their accounts in multiple Nigerian banks for illicit capital market activities.
AgroPartnerships begged for extra time to complete the payout in the same month. A year ago, in February, the company claimed it had designed investors’ settlement timeline.
The month after, investors were informed payment will begin in July, but days after the announcement, the SEC shut down the office of Agropartnerships and Farmforte.
The first seven defendants listed in the case by the SEC are; Farmforte Agro & Allied Solutions, Palmhub Agro-development, Freshforte Retail Services, Forest Capital Limited, Veritas Vision International, Agropartnerships Technology Limited and Cropuscle Investments Limited.
The remaining eight to 18th defendants are; Cropuscle Healthcare Limited, Kayvees Ventures, Kayvee Nigeria, Castore Agency Services, Travelforte Services, Agvo Services, Farmforte Ventures, O & B foods, Osazuwa Osayi, Osayimwense Uyi, and Mutiu Adebowale, who are 1st to 18th defendants, respectively.
Also, the capital market regulator listed a number of banks as the second set of defendants; Access Bank, Ecobank, Fidelity Bank, First Bank, Guaranty Trust Bank and Keystone Bank.
Others are Polaris Bank, Providus Bank, Stanbic Bank, Standard Chartered Bank, Sterling Bank, United Bank for Africa, Wema Bank, and Zenith Bank.
The first set of defendants argued against the competence of the tribunal, stating in a joint statement that the tribunal does not have the jurisdictional competence to decide on the case.
They also argued against the evidence tendered by the SEC during the hearing of the suit, stating that it wasn’t sufficient enough.
During the hearing, the tribunal heard from the SEC that the companies and their promoters operated an “unregistered collective investment scheme by calling for deposits from unsuspecting members of the public with a promise of guaranteed returns”.
But the companies and their promoters couldn’t meet the promise they made on investment from unsuspecting members of the public, as they had “no clear business model or investment plan” to make it possible.
This was after the unsuspecting members of the public had deposited their money in the bank accounts provided by the first set of defendants.
However, according to court papers, the tribunal, led by Abubakar Ahmad, said it is empowered by sections 284 and 294 of the Investments and Securities Act (ISA) 2007, to hear the case.
Commenting on the suit, the tribunal said: “A cursory look at the claims of the claimant against the background of the subject matter and personal jurisdiction of the tribunal discussed above lead to no any other conclusion than that the claims border on capital market activities and as such this tribunal has the exclusive jurisdiction to bear and determine them.
“It is therefore our considered opinion that this tribunal has the subject matter jurisdiction to entertain this suit contrary to the submission of the first set of the defendants.”
Also, the tribunal ruled in favour of SEC, ordering that, “First and 6th defendants to pay a penalty of N500,000 each. Sixteenth and 17th to pay a penalty of N100,000 each, in line with section 67(2) of investments and securities act, 2007.”
Passing other judgement on the case, the tribunal said: “Consequently, it is ordered as follows: the claimant (SEC) to seal up all business premises of the 1st, 6th, 16th, and 17th defendants anywhere found in Nigeria for engaging in unlawful capital market operation.”
The companies and the founders were also ordered to provide details of their activities since they began operation, “First, 6th, 16th, and 17th defendants to render accounts of their activities since inception till the date of judgment, particularly in respect of the running of Farmforte Agro and Allied Solutions Ltd (the 1st defendant) and Agropartnerships Technology Limited (the 6th defendant) to the claimant.
“All assets traceable to the 1st, 6th, 16th, and 17th defendants wherever found in Nigeria or outside Nigeria to be forfeited and taken over by the claimant for the satisfaction of the claims of the investors,” the court papers read.
Meanwhile, the funds deposited into the defendants’ accounts by the investors will be transferred into an interest-yielding escrow account before investors are repaid.
