Court dismisses shareholder’s petition to halt FBN Holdings’ AGM

The Federal High Court in Lagos has dismissed a petition by Tohir Folorunsho Ismaila, an aggrieved shareholder of FBN Holdings Plc, seeking to halt the company’s planned 12th Annual General Meeting (AGM).

The court ruled that the case had become academic and no longer held legal merit after FBN Holdings canceled the originally scheduled AGM.

Justice Deinde Dipeolu delivered the judgment on September 12, 2024, following a preliminary objection by FBN Holdings’ counsel, Babajide Koku SAN.

The court found that the reliefs sought by the petitioner were no longer relevant since the AGM in question had been postponed, rendering the case moot.

The petitioner, represented by Senior Advocate of Nigeria (SAN) Olayemi Badewole, argued that the 12th AGM, which was initially scheduled to be held virtually on August 22, 2024, was illegal. Ismaila contended that the meeting was convened by individuals who were not lawfully appointed or ratified as directors at a previous AGM.

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Additionally, he claimed that the AGM’s special business—capital raising by FBN Holdings—was designed to oppress and prejudice him as a shareholder.

Badewole further argued that the failure to serve notice of the AGM, as required by law, deprived Ismaila and other shareholders of their right to attend, vote, and be heard. She also emphasized that, regardless of the exact date of the AGM, the central issue was its legality based on how it was convened.

FBN Holdings’ lawyer, Koku, filed a preliminary objection, asserting that the petition was no longer valid as the original AGM had been canceled. He contended that the petitioner’s request was “extinct and academic,” given that the meeting scheduled for August 22, 2024, had already been postponed in compliance with a previous court order.

Koku also argued that since there was no longer an AGM scheduled for the original date, the court lacked the jurisdiction to rule on the matter, as it had become a hypothetical issue. He urged the court to dismiss the petition on the grounds that it no longer presented a live legal question requiring adjudication.

Justice Dipeolu agreed with the arguments presented by Koku and ruled that the case had indeed become academic. The judge noted that FBN Holdings had adhered to a previous court order by canceling the AGM, thus addressing the petitioner’s concerns.

“The event hasn’t occurred, and publications have been made to the whole world that the 12th AGM has been canceled,” Justice Dipeolu stated. “As it stands, this suit is just a fishing expedition in search of a cause of action.”

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The court found that no actionable wrong had occurred, as the AGM had not taken place and the company had complied with the required legal procedures. Consequently, the reliefs sought by the petitioner were no longer necessary, and the case was dismissed.

This ruling signifies the court’s position on legal disputes that become moot due to changes in circumstances. By canceling the AGM and complying with court orders, FBN Holdings was able to neutralize the legal challenge, effectively rendering the petitioner’s claims irrelevant.

For businesses, this case highlights the importance of adhering to legal processes when convening AGMs and other shareholder meetings, as failure to do so can lead to costly legal battles. However, the court’s decision also underscores that once corrective actions are taken, cases can lose their legal standing.

The ruling also sets a precedent for how courts handle disputes that become academic due to actions taken by the parties involved. In this case, FBN Holdings’ compliance with the court’s prior orders allowed it to avoid further legal complications related to the AGM.