Shareholders of Mass Telecommunication Innovation Plc have accused five former directors of the company of illegally utilising about N5.2bn raised by the company through private placement in 2008.

A petition written on behalf of the Chairman, MTI, Kasimu Garba, and other shareholders, to the Securities and Exchange Commission by Punuka Attorneys and Solicitors, accused the former directors of sharing N230m of the fund to one another as “severance pay.”

This, according to the petition, was regardless of the fact that they remained on the board of the company and continued to receive salaries afterwards, among other infractions.

A copy of the petition dated January 6, 2014 and entitled, ‘Re: Petition against five former directors of Mass Telecommunication Innovation for unlawful distribution and utilisation of the company’s funds raised from the capital market,’ was obtained by our correspondent on Tuesday.

The stamp on a copy of the petition indicated that it was received by the SEC Director-General’s Office on January 22, 2014. However, the commission could not be reached for comment on Tuesday.

The former directors accused in the petition by the shareholders are the Chairman, non-executive, Chibudom Nwuche; Executive Vice Chairman, Frank Kartitie; Managing Director, Glen Daley; Executive Director (F&A), Amanuel Araya; and Executive Director, Engineering and Technical Service, Gaetano Marconi.

The petition read in part, “Between March and April 2008, after obtaining the consent of the SEC, MTI had a private placement to raise funds for the purpose of implementing its business development and expansion programme, improvement in information technology infrastructure, staff development and working capital as stated in the offer document.

“The sum of N5.2bn was raised by way of private placement and the company was converted to a public limited liability company and its shares were listed on the floor of the Nigerian Stock Exchange after a successful private placement.”

The petition, however, said contrary to the terms of the offer document, the former Board of Directors of the company “in violation of the provisions of the law and in flagrant disregard of their fiduciary duties as directors, engaged in unlawful disbursements and misappropriation of the company’s funds by causing to be paid to themselves unlawful and unauthorised allowances, severance packages and salaries.”

For instance, Garba’s counsel stressed that based on the provisions of Section 271 of the Corporate and Allied Matters Act, it was unlawful for the former directors (including the non-executive director) to have, without a proposal to or a resolution of the members of the company, “paid themselves a purported severance package in the total sum of N230m with each director receiving N46m.”

“Similarly, it is our contention that it was unlawful for the executive directors of the company to have continued to receive salaries after the payment of the purported severance package, which is supposed to be a compensation for loss of office, when in fact, the office was maintained,” the counsel added.

The counsel, who argued that all salaries paid to the executive directors beyond October 10, 2008 were made without lawful justification, added that the action of the former directors was at the expense of the company, Garba and other shareholders, who had invested the N5.2bn.

They called on SEC to exercise its power to ensure that the former directors reimburse the company for the money unlawfully paid out to one another “when such funds ought to have been utilised for the purposes for which they were raised from the capital market.”

In addition, they called for “necessary disciplinary actions to be taken against the former directors of the company.”

Attempts to reach the Managing Director, MTI, Mr. Nosike Agokei, were unsuccessful. While his phone number could not be reached, a text message sent to him was unanswered.

Source: Punch (by Simon Ejembi)