BERNARD LONGE V. FIRST BANK PLC: BEFORE WE FORGET WHAT IT TAKES TO REMOVE THE EMBATTLED MANAGING DIRECTOR OF FCMB BANK

1 Introduction

The case case of Bernard longe v. First Bank Plc (2010) 6 NWLR (Pt. 1189) 1 is very important for many reasons beyond entrenching good corporate governance and protection of minority member of a company. The case has a huge implication on the Nigerian labour law jurisprudence as well. The trajectory of the case is such that should take a place of pride in our learning and practice space. The case was fought before Justice Oby Regina Nwodo as a trial judge (who later rose to the Court of Appeal and unfortunately passed on 6th August 2013 in London). The lawyers on both sides are our best and finest. Mr. Bernard Longe was represented at the High Court by the late legal colossus, Chief FRA Williams, SAN (later Professor S. A. Adesanya, SAN, took over at the Court of Appeal and Supreme Court) while First Bank was represented at all the three levels of court by the late Chief Richard Akinjide SAN.

The panel of justices at the Court of Appeal was constituted by very senior members, namely: Ayo Salami, J.C.A. (Presided and Read the Leading Judgment); Musa Dattijo Muhammad, J.C.A.; and Clara Bata Ogunbiyi, J.C.A. It is instructive to note that the judgment of the Court of Appeal (which dismissed Mr. Longe's appeal against Justice Nwodo's judgment) was unanimously overturned by the full panel of Supreme Court which allowed Mr. Longe's appeal. The Supreme Court was constituted by Dahiru Musdapher, J.S.C. (Presided); George Adesola Oguntade, J.S.C. (Read the Leading Judgment); Francis Fedode Tabai, J.S.C.; Ibrahim Tanko Muhammad, J.S.C.; and Olufunlola Oyelola Adekeye, J.S.C.

I am of the view that the case may serve as a useful guide to the First City Monument Bank Plc ("FCMB") in addressing the allegations paternity scandal against its Managing Director, Mr. Adamu Nuru. Although the FCMB case has not gone to court, it would therefore be a good time for a better review of the situation for a more cost-effective and reputation-saving approach.

2. Understanding the Similarities of the Cases

Mr. Bernard Longe is a banker who started his career with First Bank Plc in 1969. He rose to the position of Managing Director/CEO in July 2000. He has many achievements under his belt at First Bank. He masterminded the introduction and implementation of the first International Money Transfer System in Nigeria, and oversaw the crafting and implementation of the Enterprise Transformation Project, “Century II” and stewarded the “Century II The New Frontier” project. He was Chief Operating Officer of Dangote Group of Companies and a Group Managing Director & Chief Executive Officer of Transnational Corporation of Nigeria Plc. He is now a Non-Executive Director of in South Atlantic Petroleum (“SAPETRO”), a Nigerian oil and gas company with an interest in deep-water OML 130 and OPL 246; a 100% operating interest in the Sèmè oilfield, offshore the Republic of Beni and, in East Africa, majority operating interests in two adjacent deep-water blocks in the Mozambique Channel; the Juan de Nova permit area located in a French overseas territory, and Belo Profond permit in Madagascar.

The allegation against Mr. Longe was that he had been negligent or reckless in the manner he granted an unauthorized loan to a company called Investors International (London) Ltd. for the acquisition of shares in NITEL. The Bank purportedly called for a board meeting (without giving Mr. Longe notice as a Director) in which he was removed from office.

Mr. Adamu Nuru has over 20 years of banking experience with several banks including the defunct Oceanic Bank and the FSB International Bank (Now Fidelity Bank) holding key positions. He joined FCMB in 2005 as Head of Enterprise Management, went to FinBank Plc in 2009 as Executive Director, North Nigeria and rejoined FCMB as Executive Director Abuja & North Nigeria, following the merger of FCMB and FinBank in 2012. It would appear that Mr. Adamu Nuru was key to the merger between the two banks. He became the Managing Director of FCMB in March 20th, 2017.

The allegation against Mr. Adamu Nuru relates to the paternity of the children of one of FCMB's former staff who worked under him and whose husband unfortunately died as a result of cardiac arrest. Social media speculations about the complicity of Mr. Adamu Nuru became so rife that FCMB was reported to have asked him to proceed on compulsory leave pending board investigation into the matter.

Both men are powerful, no doubt. But the mechanisms for investigating and disengaging Mr. Adamu Nuru (if necessary) cannot be entirely dissimilar from those in Mr. Longe's case, hence the need for the comparison.

3. The Error in Longe v. First Bank

From page 24 of the Nigerian Weekly Law Report ("NWLR"), it is apparent that the kernel Mr. Longe’s case was the failure of First Bank Plc to serve him a notice to be present at the board of directors' meeting of 13th June, 2002 whereat a decision was made to dismiss him from the service of the bank. It was Mr. Longe's contention that under section 266 of Companies and Allied Matters Act ("CAMA"), he was entitled to be given notice of the board meeting and that the failure to give him such notices would render his termination null and void. 

There is no dispute as to the fact that the Mr. Longe was placed on suspension on 22-04-02 and that his appointment was revoked on 13-06-02. But the question before the Court was whether First Bank complied with the provisions of Section 262 of CAMA.

Section 262 of CAMA, which he relied on, provides as follows:

“262(1) A company may by ordinary resolution remove a director before the expiration of his period of office, notwithstanding anything in its articles or in any agreement between it and him.

(2) A special notice shall be required of any resolution to remove a director under this section, or to appoint some other person instead of a director so removed, at the meeting at which he is removed, and on receipt of notice of an intended resolution to remove a director under this section, the company shall forthwith send a copy of it to the director concerned, and the director (whether or not he is a member of the company) shall be entitled to be heard on the resolution at the meeting.

(3) Where notice is given of an intended resolution to remove a director under this section and the director concerned makes with respect to it representations in writing to the company (not exceeding a reasonable length) and requests their notification to members of the company, the company shall, unless the representations are received by it too late for it to do so -

(a) in any notice of the resolution given to members of the company, state the fact of the representations having been made;

(b) send a copy of the representations to every member of the company to whom notice of the meeting is sent (whether before or after receipt of the representations by the company),

and if a copy of the representations is not sent as required in this section because it is received too late or because of the company’s default, the director may (without prejudice to his right to be heard orally) require that the representations shall be read out at the meeting:

Provided that copies of the representations need not be sent out and the representations need not be read out at the meting if, on the application either of the company or any other person who claims to be aggrieved, the court is satisfied that the rights conferred by this section are being abused to secure needless publicity for defamatory matter and the court may order the company’s costs on an application under this section to be paid in whole or in part by the director, notwithstanding that he is not a party to the application.

(4) A vacancy created by the removal of a director under this section, if not filled at the meeting at which he is removed, may be filled as a casual vacancy.

(5) A person appointed director in place of a person removed under this section shall be treated, for the purpose of determining the time at which he or any other director is to retire, as if he had become director on the day on which the person in whose place he is appointed was last appointed a director.

(6) Nothing in this section shall be taken as depriving a person removed under it of compensation or damages payable to him in respect of the termination of his appointment as a director or of any appointment terminating with that as director, or as derogating from any power to remove a director which may exist apart from this section.

A copy of the Suspension letter served on Mr. Longe reads as follows:

Mr. Bernard Ojeifo Longe, OON.,

Managing Director/CEO,

First Bank of Nigeria Plc.,

35, Marina, Lagos.

Dear Mr. Longe,

LETTER OF SUSPENSION

I regret to convey to you the decision taken by the Board of Directors of the First Bank of Nigeria Plc., at its extraordinary board Meeting of 22nd April, 2002 held at Coommasie House Abuja to suspend you from office with effect from today, 22nd April, 2002. During the suspension period, you are expected to concentrate on the recovery of the Credit Facility granted to the Investors Group NigeriaLimited (I.G.N.L.).

The Board expects that you will do your utmost best to help in the collective efforts towards the recovery of the money.

Yours faithfully,

(Sgd.)

Alh. (Dr.) Mutallab, CON (Chairman)”

On 13th June 2020, the above suspension letter was followed by another letter which is set out below:

13th June, 2002.

Mr. Bernard O. Longe, OON.,

C/o 10 Murtala Mohammed Drive, Ikoyi, Lagos.

Dear Sir,

REVOCATION OF APPOINTMENT AS MANAGING

DIRECTOR/CHIEF EXECUTIVE OF FIRST BANK OF NIGERIA PLC

I write to advise you that the board of Directors at its meeting of 13th June, 2002 has resolved to revoke your appointment as Managing Director/Chief Executive. Consequently, your appointment is hereby revoked with effect from the date of this letter.

I wish you success in your future endeavours.

Yours faithfully,

(Sgd.)

Alhaji (Dr. U.A. Mutallab, CON

Chairman

cc: Mr. J.M. Ajekigbe

Managing Director/ Chief Executive”

From the totality of the above, First Bank Plc had at the same board meeting of 13th June 2002 appointed M. J. M. Ajekigbe as the new Managing Director of the Bank. The effect of the foregoing is that Mr. Longe was prejudged, prejudiced and denied his right to a statutory notice as director of the Bank as enjoined by Section 262 of CAMA. The Supreme Court held that such violation of the law was actionable.

The error made by First Bank may repeat itself with Nuru-FCMB situation if regard is not had to the right of Mr. Adamu Nuru to receive notice of a board meeting where the disengagement of his services is to be deliberated, especially if he is also a director of FCMB in addition to being its Managing Director. Although the appointment of Mrs. Yemisi Edun announced by FCMB is that she has only been appointed as the Acting Managing Director of FCMB (which presupposes that the position is subject to confirmation or revocation upon completion of investigation of Mr. Adamu Nuru), it is nonetheless important for both parties to seek the right guidance.

According to Justice Oguntade of the Supreme Court, who delivered the lead judgment,

"Let me say with all the necessary force and emphasis that when the law vests a right on a citizen, a court of law will resolutely resist any attempt and by whatever method to deny the citizen the enjoyment of the right conferred by law. The plaintiff’s case was not founded on the principles of administrative law including those of natural justice. It is simply on whether or not an extant provision of law was obeyed."

In concluding that First Bank did not obey the provisions of Section 262 of CAMA, the Supreme Court further held that it would be untenable to ask the affected director (Mr. Longe or Mr. Nuru) to excuse the board of directors simply because the board is or was about to deliberate on his matter. In Justice Oguntade's words,

"I say with due respect to their Lordships of the court below that the power to amend or vary the meaning of a director under ‘C.A.M.A.’ has not been vested in a company concerned or the court. The reasoning that, after all, if the issue of a director to be removed is to be discussed, the director concerned will be asked to step out is with respect untenable because that reasoning speculates on the intendment of the legislation. Section 262 reproduced earlier in this judgment gives the director whose removal is under consideration the priviledge to make written presentation in his own defence to the Board of Directors. The case of the plaintiff is that he was not given such a notice. How could a director who was not given a notice of the meeting of the Board make a written presentation at the meeting of the Board."

I need not say more.

4. Prompt Correction of the Error

Where the board of a bank or any company realizes that an error has been committed in the removal of a managing director, the best approach is to jettison the earlier board resolution that is flawed with irregularity and direct the Company Secretary to issue a new notice of meeting with full compliance with the provisions of CAMA. It is foolhardy to slug it out with the embattled managing director in court merely because the company is unwilling to accept or recognize that it has made an error.

The concluding statement of Justice Oguntade is very apposite:

"Let me observe here that the defendant has by its unwillingness to respect the provisions of section 266 brought about this unfortunate situation on itself. The plaintiff’s suit was filed on 4-07-02 about a month after he was purportedly removed. All the defendant needed to do on being served with the summons was rescind the ill-advised action and follow thereafter the prescription under section 266. Within a few weeks thereafter, the defendant would have been able to effectually remove the plaintiff. What could have been done validly within 3 months has been made to last eight years."