Following the reinstatement of Senator Ifeanyi Araraume as the board chairman of the Nigeria National Petroleum Company Limited (NNPCL) by the Federal High Court in Abuja, energy experts and lawyers have urged the federal government and other stakeholders to ensure the stability of the company.
Justice Inyang Ekwo passed the verdict in his judgement following a N100 billion suit filed by Araraume challenging his replacement by President Muhammadu Buhari when the latter constituted a nine-member board and management of the NNPC Limited in January 2022.
President Buhari had, on September 2021, appointed Araraume as the non-executive chairman of the NNPC Limited but later suspended the appointment, replacing him with Margret Chuba Okadigbo.
Speaking with LEADERSHIP yesterday on the implications of the judgement on investments, financing, international confidence and impact on the nation’s oil industry, the chief executive officer, Centre for the Promotion of Private Enterprise, Dr. Muda Yusuf, said he felt that the Court’s pronouncement is likely to disrupt major investment decisions which the reinstated board chairman may want to alter.
According to him, Ararume may want to work on the probability that NNPCL has not been fully subjected to operate as a commercial entity which some stakeholders had suggested should be quoted on the stock exchange locally and internationally. He expressed fear that the unfolding scenario may negatively affect investors’ confidence who may begin to see the structure as unstable. He also said that the NNPCL, now a CAMA company, is expected to operate with minimal political interference.
Yusuf, a former director general of the Lagos Chamber of Commerce and Industry, LCCI, said there is a high level of corporate governance compliance expectations and the NNPCL is expected to operate within the framework of the Petroleum Industry Act, PIA.
On his part, chief executive officer at Cowry Asset Management Limited, Johnson Chukwu, said the ruling may not totally affect investment decisions made in the past as the Federal High Court is just a court of first instance and that the federal government has the right to appeal the judgement. He said NNPCL is purely operating as a commercial entity under the new law and cannot be subjected to political interferences.
Also speaking with LEADERSHIP yesterday, the executive director of Citizens Advocacy for Social and Economic Rights (CASER), a civil society group that promotes human rights and better living standards for citizens of Nigeria, Barrister Frank Tietie, urged the federal government not to appeal the Federal High Court judgement in the interest of the company.
According to him, it is important to allow the rule of law to prevail in the interest of the international obligations and transactions of the NNPCL so as not to create trust deficit in its operations.
He said, ‘‘The judgement of a court is presumed to be obeyed by all parties until it is set aside. In the absence of any stay of execution, the judgement must be obeyed.’’
He said for the sake of stability of the company, the newly reinstated non-executive chairman of the board of the NNPCL may decide to ratify decisions of the board since his removal so as not to create a situation where the operations of the company would be affected negatively.
Also, an energy finance expert and former senior technical adviser to the minister of petroleum resources, Dan Kunle, told LEADERSHIP in a telephone interview yesterday said it is important for the government to always ensure that it allows the Companies and Allied Matters Act (CAMA) to guide the rule of engagement for directors of limited liability companies.
Dan Kunle, who said the federal government may decide to appeal the court ruling, urged the government to always play by the rule. He also said that decrees should not be employed in the setting up of boards of limited liability companies.
In his suit marked FHC/ABJ/CS/691/2022, Ararume had asked the court to “determine whether his replacement did not contravene provisions of the Memorandum and Articles of Association of the NNPC, CAMA 2010 and the Petroleum Industry Act 2021, amongst others.”
Yesterday, Ekwo held that Araraume’s removal was illegal while awarding the lawmaker N5 billion as general damages. The judge ordered the applicant’s immediate reinstatement by the federal government.
A Senior Advocate of Nigeria, Mr Abdul Balogun, said the government has no choice but to obey the judgement of the court, except it decides to appeal it.
According to him, not obeying the judgement will send the wrong signal to the international business community.
Court Reverses Ararume Sack As NNPCL Board Chairman
“If the government feels it has a strong case, it can appeal the judgement up to the Supreme Court. But not obeying the judgement of the court is dangerous for the image of the country because it will send a wrong signal to the international business community. The government can’t afford not to obey the judgement, if it hopes to win investors’ confidence in the judicial system”, he said.
Constitutional lawyer, Barrister Fidelis Amobii, agreed with the position of the senior advocate and added that the judgement will have a far-reaching effect on the operations of the company.
According to him, obeying the judgement means that some decisions already taken by the board may have to be reversed.
“Despite Araraume winning his case in court, I think a political solution should be deployed to resolve the situation that has been created by the judgement of the court. Otherwise, the government may not be able to manage the situation,” he said.
