A Federal High Court in Lagos State has restrained the Financial Reporting Council of Nigeria (FRCN) and its Executive Secretary, Mr. Jim Osayande Obazee from taking action, sanction or measure against KPMG Professional Services and Mr. Ayodele Othihiwa, a partner in the firm, pending the hearing and determination of the suit filed by the applicant.
The interim order was granted by Justice Ibrahim Buba on Friday following the argument of lawyer to the applicant, Chuka Ikwuazo, urging the court to restrain the respondents from applying sanction and also order accelerated hearing of the suit.
The interim order was the second to be granted by the court against FRCN within 48 hours. In a related case filed by Stanbic IBTC holdings, Justice Buba, last Wednesday ordered the FRCN to maintain the status quo.
KPMG and its partner had filed an application for the enforcement of their fundamental rights, following the FRCN letter of October 26, 2015, which it called a final notice and its ‘regulatory decision’ conveyed in another letter dated October 30, on the financial statements of Stanbic IBTC holding Plc for 2013 and 2014.
The regulatory agency in one of its regulatory decisions had suspended Othihiwa “until the investigation as to the extent of the negligence of KPMG professional services is ascertained”.
KPMG and Othihiwa contended that the FRCN decision was published and issued without informing or notifying them of the nature of the allegations made against them.
The company claimed that FRCN decision not only violated its constitutional right to fair hearing but also Section 62(2) of the Financial Reporting Act, which spelt out the procedure to be adopted by the agency in investigating a professional body for any complaint or dishonest practice.
The applicants argued that FRCN and Mr. Obazee, also breached Section 15(2) b of the FRC Act, which states that a Technical and Oversight Committee shall review “sanctions to be meted out to any professional accountant, professional or public interest entity”
KPMG and Othihiwa while asking the court for accelerated hearing averred that they had been greatly affected and could suffer greater loss of business opportunities, as a result of the action of FRC.
Justice Buba adjourned the suit till November 12, 2015 for hearing of the motion for interlocutory injunction.
Dailytrust
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