Victor Obaika accuses the banking group of breaching South Africa’s laws regarding repatriation of foreign currency.
FirstRand Limited, also referred to as FirstRand Group, has paid one million US dollars to a Nigerian lawyer to settle a contractual dispute, but now the advocate has said he is taking further action that could see the financial services provider lose its operating licence.
Speaking from Lagos, lawyer Victor Obaika this week said he had accepted the settlement offer of just more than one million US dollars related to an earlier contractual dispute.
But Obaika insisted he was “taking action” against FirstRand, which he accused of breaching South Africa’s laws regarding repatriation of foreign currency.
The initial contractual dispute was first reported by the African News Agency (ANA) on September 22 2017. Obaika was suing FirstRand for R1.3 billion at the time.
At the time, Obaika alleged that FirstRand, which also operates in Nigeria, violated trademark and intellectual property rights.
He subsequently filed papers in the Federal High Court in Lagos, Nigeria, in an effort to compel the South African financial services group to pay outstanding professional legal fees and damages related to the alleged trademark/intellectual property violations.
Obaika sued FirstRand and its affiliates for a total of US $100 million (about R1.4 billion).
Asked at the time if the group was aware of the lawsuit, Rand Merchant Bank (RMB), a division of FirstRand Bank Limited, responded saying: “Rand Merchant Bank confirms that proceedings have been instituted by Mr Obaika against various entities and individuals.
“Those proceedings will be defended. We have been advised that the proceedings are factually and legally bereft of merit.”
Papers filed at the federal high court indicate that Obaika was suing 24 defendants, including Firstrand Group, First National Bank, RMB, Wesbank, Ashburton Investments, RMB Corvest, RMB Nigeria, RMB Westport, Global Outdoor Systems Nigeria Ltd, and Global Outdoor Advertising Nigeria Ltd.
However, this week Obaika revealed that FirstRand had since settled out of court and paid him “compensation” of more than one million US dollars.
In another turn of events, the prominent Nigerian attorney, who owns a professional stock car racing team in the US, is now accusing FirstRand of breaching SA regulations when it moved the settlement money to his bank account overseas.
FirstRand denied the allegations and has since appointed Nigerian law firm Banwo&Ighodalo to defend any possible actions Obaika might initiate.
In a recent letter to Obaika, Nigerian lawyer Ms Abimbola Akeredolu confirmed that Banwo&Ighodalo acts for FirstRand.
“Please be advised that our clients will not hesitate to defend themselves against any legal and/or administrative actions that may be initiated at your insistence, and will take the necessary steps to recover all costs associated with defending such action,” wrote Akeredolu on January 21 2019.
But Obaika has responded by saying the Nigerian law firm cannot act on the matter because “jurisdiction was set down as South Africa for matters emanating from the settlement, she (Akeredolu) therefore has no jurisdiction whatsoever”.
Actions against FirstRand, that Obaika said could result in the banking group losing its licence, would continue.
In a letter to Alan Pullinger of FirstRand, Obaika wrote: “The other actions that we need to take in South Africa and elsewhere will also now be unfurled as well. We take the letter, albeit from counsel in the wrong jurisdiction, but stating denials nevertheless, as a clear invitation from your good selves to proceed with our best efforts, all of which will be above board, to resolve this situation.”
The letter was also copied to Werkmans, the SA lawyers for FirstRand.
At the time of publication, FirstRand had not responded to queries on the matter that were sent to them by ANA.