The respondents in this appeal who claim to be shareholders and directors of the 2nd appellant company filed a petition at the Federal High Court Lagos on 20th November, 1990 seeking to wind up the 2nd appellant on the ground that the 1st appellant was running 2nd appellant as his private property and had unilaterally and dishonestly appropriated funds generated by the company.
After the motion to advertise the winding up petition was granted, the petitioners filed another application praying for an order:
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"Appointing Mr. R.O. Ogunbo. Chartered Accountant of Oluwole Ogunbo & Co. No.5. Akenreni Close Baruwa, via Abesan Housing Estate.via Ipaja , Lagos or Mr. M.B. Shasanya, Chartered Accountant of 8/10, Broad Street, Lagos as a receiver to enter upon and take possession of the assets, properties, business management and affairs of the 2nd respondent pending the hearing and determination of the petition herein and for such further and/or other order(s) as this Honourable Court may deem fit to make in the circumstances."
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The application was supported by an affidavit of 19 paragraphs sworn to by the 1st respondent- Idowu Fasakin, and therein he alleged that the 1st appellant had been recklessly and in some cases fraudulently spending the money of the 2nd appellant company since the service of the winding up petition in order to frustrate the petition. With respect to the person proposed as receivers he deposed as follows:
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14.
That I honestly and reasonably believe that the two gentlemen proposed as receivers are responsible people and that they are fit and proper persons to be appointed as receivers.
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15.
That I have obtained their consent to act as receivers and they are willing to do some (sic) if appointed by this Honourable Court."
After hearing arguments on this application, the learned trial judge Egbo-Egbo, J granted it making the following orders after finding that the appellants failed to deny the serious allegations made against them in the respondents affidavit in support of the motion:
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1.
From today all Directors engaged in the administration of 2nd respondent are hereby suspended.
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2.
Mr. B.Shasanya, a Chartered Accountant of 8/10 Broad Street, Lagos, is hereby appointed a receiver/manager of 2nd respondent forthwith until the main case is determined. He is responsible to the court and must run the business for the benefit of all shareholders.
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3.
Before proceeding to act he must file affidavit of suitability and must give proper security that he will truly account for what he receives in the execution of his function of receivership.
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4.
The remuneration of the appointed receiver/manager will be agreed upon by both parties and this should be communicated to this court.
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5.
The above orders are to be served on all appropriate Banks and others who might be affected by this order.
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After hearing arguments on this application, the learned trial judge Egbo-Egbo, J granted it making the following orders after finding that the appellants failed to deny the serious allegations made against them in the respondents affidavit in support of the motion:
The appellants being dissatisfied with the decision of the learned trial Judge appealed to the Court of Appeal contending inter alia that this was not a proper case for the Court to exercise its jurisdiction to appoint a receiver.
