AP shares scandal: Otedola sues Dangote for N117bn

Shareholders of African Petroleum Plc have filed a petition against the Vice-President of the Nigeria Stock Exchange, Alhaji Aliko Dangote and Nova Finance and Securities Limited before the Securities and Exchange Commission for losses incurred as a result of the manipulation of the company’s share.

In a complaint filed before the SEC’s Administrative Proceedings Committee, dated March 31, 2009, the shareholders - AP chairman, Mr. Femi Otedola, Zenon Petroleum Oil and Gas Limited, and Luzon Oil and Gas Limited – are seeking the payment of N117.18bn being losses incurred as a result of the manipulation of the share price between August 21 2008 and March 26, 2009.

They have also filed a petition with the Director General of the Nigeria Stock Exchange demanding that Dangote step aside and temporarily relinquish his position as 1st Vice President of the NSE to pave way for an unbiased investigation into the allegation and restore confidence in the market.

The petitioners insisted that Dangote’s retention of his seat at the NSE council was likely to undermine investigations in the case and there was a probability that he would be “in a position to influence the outcome” of the complaint/petition before SEC.

According to the petition, filed by Mr. Ubong-Abasi Iyang of Day Spring Law Office, Otedola is seeking a declaration that the respondents transactions carried out within the said period with regards to AP shares was such that created or caused to create a false impression of trading activity on AP shares and did not involve a change in beneficial ownership of such shares.

The petitioners are also seeking a declaration that the respondents’ dealings by way of purchase and selling of AP shares during the period in question “amounted to fictitious transactions, and/or devices which caused a depression and/or caused fluctuations in the market price.”

They are also seeking a declaration that the respondents act was done with the intention to induce other persons to sell their shares and cause a depression and loss in value of AP shares.

They are asking the SEC Tribubal to declare that the respondents actions indeed directly resulted in the loss of the value of each unit of AP shares from N293 as at August 21,2008 to “a miserable value” of N66.50 as at March 26, 2009.

The shareholders are therefore seeking a declaration, pursuant to relevant provisions of the law, that they are entitled to the payment of N117.18bn, which was the loss in value occasioned by the direct act of false trading perpetuated by the respondents.

The petitioners jointly control 490, 328,527 units of shares out of AP’s total 788,787, 838 shares outstanding.

Nova Securities, controlled by Mr. Eugene Anenih, had previously been fined N500,000 for contravening trading rules in respect to the AP transactions