Indorama Equity

Rivers courts decide on Indorama’s 7.50% host community equity dividends

The fight by different factions in Eleme, Rivers State, to control the 7.50 percent equity owned by the host communities has moved from the street (fighting and burning of houses) to the courts in the state.

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This was after the intervention of the Rivers State government a few years back.

Now, the Court of Appeal in Port Harcourt has given a landmark ruling quashing an earlier injunction that stopped Indorama from releasing dividends to Elano. This is to allow the substantive case filed against Elano to continue a natural process.

In the past three years, different courts have adjudicated on the disputes that have fallen out of the conflict.

The main party is Elano Investment Limited which secured the authorisation of the host community to pursue, acquire and manage the equity when it was about to expire years ago.

Having secured a loan of N3 billion to acquire the shares, Elano later took possession of the accumulated N14bn dividend and shared it out with the various sections of the community according to the memorandum of understanding. The arrival of such a sum seemed to spark off the fire as many of the leaders who seemed uninterested in the share when funds were being mobilised to purchase share now took a new stand against Elano, saying they had no right to manage the equity.

This led to violence, burning of houses, and attempts to mob the directors until the state government intervened to restore peace and urged aggrieved parties to seek judicial resolution.

Consequently, Elano went to court to seek judicial interpretation of the rights and the agreement they had with the host community representatives.

In April 2017, the justice, Hillary Oshomah, had granted all the prayers of the Elano board, saying he did so after studying the claims by Elano and counterclaims by the 28 other defendants.

The court said it took cognisance of the fact that Elano was given a due mandate by the communities to source funds to buy out the 7.5 percent offered to the host communities by the Federal Government through the Bureau of Private Enterprises (BPE) and to manage it.

The judge said it also recognised the agreement between Elano and the host communities which provided for sharing of dividends and use of funds for development purposes. The court granted an order of injunction restraining the defendants from interfering or obstructing Elano from acting as ‘legitimate manager’ of the 7.5 percent Indorama Eleme Petrochemicals Limited host community equity. The group went on appeal and lost.

In 2020, one aggrieved person went to a high court and got an injunction to stop the release of dividends. Elano thus went on appeal. Now, the Court of Appeal has granted the motion by Elano for a stay of execution of the orders of a Rivers State High Court presided over by Justice A. Enebeli, restraining Indorama Eleme Petrochemicals Company Limited from paying out dividends to Elano.

The Court described as strange the lower court’s decision to suo–moto (on its own) extend the exparte injunctions on November 9, 2020, without hearing the parties, whereas the same court had adjourned the same case to November 10, 2020.