A London judge has ruled that Nigerian media mogul Nduka Obaigbena can appeal the ban on his running a company in the uk. He said there is an argument that the penalty would be too severe.
According to Law360.com, High Court Judge Timothy Fancourt granted Obaigbena permission to appeal the decision prohibiting him from operating a company in the United Kingdom for seven years due to unpayable debts.
Hugh Sims, QC, the counsel for the businessman, argued that High Court Judge Raquel Agnello had misunderstood the law. Obaigbena’s business, Arise Networks Limited, an African TV network based in London, had no realistic prospect of paying its debts and avoiding insolvent liquidation.
Judge Fancourt stated that he was not convinced that the judge misunderstood Obaigbena’s evidence or unfairly criticized his credibility. He further stated that there is still a possibility that the imposed sanctions were too harsh.
Sims argued that Judge Agnello used the wrong legal test to sanction Obaigbena at a hearing asking for permission to appeal. Sims argued that his client believed his company was capable of paying off its enormous debts.
Judge Agnello should not have simply looked at Obaigbena’s inability to pay off his debts. He should also have asked on if the businessman knew there was no way for the company to turn around its fortunes.
According to Sims, Obaigbena believed the company could trade based on April’s findings. The court shouldn’t have banned its activity because of this subjective belief. Sims said Judge Agnello appeared skeptical about Obaigbena’s evidence due to his style of delivery.
Sims said that “it does seem to have been a contributing factor.”
The hearing comes after it was revealed that Arise continued trading despite its losses increasing from PS3.8 million ($5.1 million) in 2013 to PS25.7 million in April 2016 when it was wound down.
Obaigbena launched Arise in 2014. He is also the founder of Nigeria’s largest newspaper, This Day.
From late 2014, the company was under increasing pressure due to its growing arrears to creditors and inability to repay its debts. Arise’s debts grew steadily despite the sums it received at the time.
Although it was expected that the company would lose its profit over the next five years, it did not generate any sales revenue during its trading activity. It was entirely dependent on loans from Nigerian businesses, according to the judge.
Due to the collapse in oil prices, the Nigerian government instituted strict exchange controls in September 2014. This prevented the free flow of currency from Nigeria, which severely limited Obaigbena’s ability to transfer funds to Arise and any other associated companies in the UK.
Obaigbena said he believed that sufficient funds would be available once the restrictions were lifted, which could then be used to pay creditors. Judge Agnello ruled that there was no evidence to support Obaigbena’s belief that the creditors would be paid.
