Economic Confidential, April 9, 2008

The Decisions of

Administrative Proceedings Committee

on Cadbury Scandal

IN THE MATTER OF INVESTMENTS AND SECURITIES ACT NO 29 2007

BEFORE THE ADMINISTRATIVE PROCEEDINGS COMMITTEE OF THE SECURITIES AND EXCHANGE COMMISSION

         APC/1/2007

IN RE: THE MATTER OF MISSTATEMENTS IN THE PUBLISHED ACCOUNTS OF CADBURY (NIGERIA) PLC (2002-2005)

Between

Securities & Exchange Commission

And

1      Cadbury Nigeria Plc

2   Rt. Hon. Uduimo Itsueli                       Chairman

3   Bunmi Oni                              Former Managing Director

4      Ayo Akadiri

5      J.S.T. Bogunjoko

6      Abiodun Jaji                                     Executive Directors

7      Andrew Baker

8      Christopher Okeke

9      Olatunde Falase

10   Raymond Ihyembe

11   Gabriel Onabote                                Non Executive Directors

12   Olusegun Oyewole

13   Matthew Shattock

14   Olusegun Aina               -        Senior Financial Accountant/Head of Accounts

15   Akinbode Gbolahan        -        Sales Operations and Development Controller

16   Tunde Egbeyemi            -        Head of Internal Audit

17   Thomas A. Ayorinde

18   Z.C. Enunwa                          Non-Board Members of the Audit Committee

19   S.J. Balogun

20   Akintola Williams, Deloitte                            (Auditors)

21   Union Registrars Ltd                                    (Registrars)

Background

DECISIONS OF THE ADMINISTRATIVE PROCEEDINGS COMMITTEE AT ITS SITTING OF MARCH 27, 2008

1.         Allegations against the 1^st to 19^th Respondents

1.    That the 1^st – 19^th Respondents, being the company, Directors and persons in charge of, and responsible for the running of the 1^st Respondent and or audit Committee members filed and or authorized the filing of a document with the Commission to wit: 2005 Annual Report and Account of the 1^st Respondent which contained false/misleading statements and thereby violated  Rule 3(4) SEC Rules and Regulations 2000 as amended in 2005 which forbids filing of any paper, document or information with the Commission that contains misleading information and thereby liable under Rule 3 (4) and Rule 7 and Schedule VII, Rule 11 of SEC Rules and Regulations 2000 as amended in 2005.

2.    That the 1^st Respondent as Issuer and the 2^nd – 16^th Respondents as directors of the 1^st Respondent, in 2005 issued and or authorized the issuance of a Rights Circular dated 24 August, 2005 containing an untrue statement and thereby contravened Rule 3(4) SEC Rules and Regulation 2000 as amended in 2005 which contravention renders the Respondents liable under Rule 3 (4) and Rule 7 and Schedule VII, Rule 11 of SEC Rules and Regulations 2000 as amended in 2005.

3.    That the 1^st Respondent failed/refused and/or neglected to deliver funds en-bloc to the 21^st Respondent for the payment of dividends declared to shareholders within 7 working days after the Annual General Meeting and thereby violated provision of Rule 204 of the SEC Rules and Regulations 2000 as amended in 2005 which contravention renders the 1^st Respondent liable under Rule 7 and Schedule VII, Rule 11 of SEC Rules and Regulations 2000 as amended in 2005.

4.    That the 2^nd to 16^th Respondents failed and/or neglected to abide by the provisions of the Code of Corporate Governance in Nigeria.

Preliminary issues:

a.  All the Respondents listed above were served with the hearing notice, further amended memorandum of facts and all the exhibits to be relied upon by the Commission in the course of the hearing. The service was effected by post to their last known addresses and through their e-mail addresses.

b.  The 1^st, 2^nd, 5^th to 19^th Respondents pursuant to the above were represented by the Law Firms of Olisa Agbakoba & Co., Udo Udoma & Belo Osagie and Olaniwun Ajayi and Co at the hearing. However, the Respondents neither filed any sworn statement nor gave oral testimony in defence of the allegations against them.

c.  The 3^rd Respondent, Bunmi Oni was represented by Yemisi Dansu of Strachan Partners and filed a sworn statement and a written brief in defence of the allegations against him wherein he largely admitted the allegations therein.

d.  The 4^th Respondent, Ayo Akadiri did not appear and was not represented by any counsel at the hearing. He did not file any document before the Committee.

Findings:

Decisions:

1. The 1^st Respondent be and is hereby directed to pay a fine of one hundred thousand naira (N100,000.00) only in the first instance  and a penalty of five thousand naira (N5,000.00) per day from June 30, 2002 to December 14, 2006 amounting to eight million, two hundred and forty-five thousand Naira only (N8, 245, 000. 00) within 21 days from the date of this decision for filing with the Commission, financial statements that contained untrue/misleading statements failing which trading on its shares will be suspended.

2. The 1^st Respondent is hereby directed to pay a fine of one hundred thousand Naira (N100,000.00) in the first instance and a penalty of N5,000 per day from August 24, 2005 to the date of this decision amounting to N4, 855, 000.00 (Four million, eight hundred and fifty five thousand Naira only) within 21 days for filing a Right Circular for the 5 billion irredeemable convertible loan stock which contained false/misleading statement, failing which trading on its shares will be suspended.

3. The 3^rd and 4^th Respondents be and are hereby disqualified from operating in the Nigerian capital market, being employed in the financial services sector and holding directorship positions in any public company.

4. The 5^th to 8^th Respondents be and are hereby disqualified from operating in the Nigerian capital market, being employed in the financial services sector and holding directorship positions in any public company for a period of 5 years from the date of this decision.

5. The 14^th to 16^th Respondents be and are hereby disqualified from operating in the Nigerian capital market, being employed in the financial services sector and holding directorship positions in any public company for a period of 3 years from the date of this decision.

6. The 2^nd, 9^th to 13^th, 17^th to 19^th Respondents be and are hereby disqualified from operating in the Nigerian capital market, being employed in the financial services sector and or holding directorship positions in any public company for a period of one year from the date of this decision.

7. The 1^st Respondent be and is hereby further directed to pay a penalty of five thousand Naira (N5,000.00) per day from June 30, 2002 to December 14, 2006 amounting to eight million, one hundred and twenty thousand Naira N8,120,000.00 within 21 days from the date of this decision for failing to provide funds in bloc for the payment of dividends to its shareholders despite the Commission’s directive to it.

8. The 2^nd to 16^th Respondents be and are hereby referred to the Economic and Financial Crimes Commission (EFCC) for further investigation and prosecution.

2.         Allegations against the 20^th Respondent (Akintola Williams Deloitte “AWD”)

1.    That the 20^th Respondent as expert (i.e. External Auditor) failed and/or neglected to exercise due diligence and professionalism in the discharge of its duties in the Rights Offer of N5 Billion Unsecured Zero Coupon Irredeemable Convertible Loan Stock of 2005.

2.    That the 20^th Respondent as an expert i.e. External Auditor and a party to the issue signed, consented to and authorized the issuance of an untrue financial statement in the Rights circular and failed to exercise due diligence and professionalism in the discharge of their duties in the Rights offer of N5 Billion Unsecured Zero Coupon irredeemable convertible loan stock of 2005.

Preliminary issues:

The 20^th Respondent was served with the hearing notice, further amended memorandum of facts and all the exhibits to be relied upon by the Commission in the course of the hearing. The service was effected by post to its last known address and through its e-mail address.

Pursuant to the above, the 20^th Respondent filed sworn statements and gave oral testimonies at the hearing where it was represented by Bambo Adesanya (SAN) who also filed a written address

Findings:

1.    .

Decisions:

1.    That the 20^th Respondent be and is hereby ordered to pay a fine of twenty (20) million Naira within 21 days of the decision for its failure to handle the accounts of the 1^st Respondent with high level of professional diligence failing which its registration with the Commission shall be cancelled.

2.    That the 20^th Respondent be and is hereby strongly reprimanded and warned to desist from engaging in acts that may affect the investing public’s image of and confidence in the capital market.

3.    That the 20^th Respondent be and is hereby strongly advised to be more diligent in carrying out its assignments in capital market related issues.

4.    That the 20^th Respondent be and is hereby directed to sign an undertaking to be diligent and of good behaviour in its future dealings in the capital market.

3. Allegations against the 21^st Respondent ( UNION REGISTRARS ) 

That the 21^st Respondent failed/refused and/or neglected to report to the Commission the non-remittance of funds for the purposes of payment of dividends warrants to shareholders and thereby violated the provisions of Article 1 (ix) of Code of Conduct for Capital Market Operators and their Employees which requires capital market operators to report to the Commission any violation of its regulations, which contravention renders the 21^st Respondent liable under Rule 7 and Schedule VII, Rule 11 of SEC Rules and Regulations 2000 as amended in 2005.

Preliminary issues

The 21^st Respondent was served with the hearing notice, further amended memorandum of facts and all the exhibits to be relied upon by the Commission in the course of the hearing. The service was effected by post to its last known address and through its e-mail address.

Pursuant to the above, the 21^st Respondent filed sworn statements and gave oral testimonies at the hearing where it was represented by Mrs. Dorothy Ufot of counsel who also filed a written address

Findings:

Decisions:

1.    The 21^st Respondent be and is hereby ordered to pay a penalty of five thousand Naira (N5,000.00) per day from June 1, 2002 to June 31, 2006 amounting to seven million, six hundred and fifteen thousand Naira only (N7,615, 000.00) within 21 days of this decision for neglecting to carry out its statutory duties to report to the Commission any breach or suspected breach or non compliance with SEC Rules and Regulations failing which its registration with the Commission will be cancelled

2.    That the 20^th Respondent be and is hereby strongly reprimanded and warned to desist from engaging in acts that may affect the investing public’s image of and confidence in the capital market.

3.    That the 20^th Respondent be and is hereby strongly advised to be more diligent in carrying out its assignments in capital market related issues.

4.    That the 20^th Respondent be and is hereby directed to sign an undertaking to be diligent and of good behaviour in its future dealings in the capital market.

Dated this 28^th day of March 2008

SIGNED

MANAGEMENT

Read More

*Official Statement of SEC on Cadbury Scandal

*Cadbury Scandal: Akintola William Penalised, Bunmi Oni Banned