ARISE media group chairman Nduka Obaigbena has been banned from serving as a director of any company in the UK for seven years after a London high court found him guilty of contravening the Company Directors Disqualification Act.
Mr Obaigbena, the founding chairman and editor-in-chief of Thisday newspaper, Arise News Channel and Arise magazine was found guilty for owing debts in the UK which he failed to clear. The application for disqualification was made under Section 6 of the Company Directors Disqualification Act 1986 and arose from the compulsory liquidation of Arise Networks of which Mr Obaigbena was the sole director since its incorporation on October 30, 2012.
According to the judgement, the company had zero turnover and as of December 31, 2013 and had recorded losses of £3,854,112 and debts of £1,545,883. Due to foreign exchange restrictions by the Nigerian government in September 2014, it was difficult to transfer necessary funding to Arise.
In December 2014, the company had expense debts of more than £3m leading it creditors to increase pressure on Mr Obaigbena from late 2014 onwards. According to the court, Mr Obaigbena made efforts to clear some payments but there were still large sums that remained outstanding.
With no certainty of when any of the payments would be made, the court took into account that it did not consider the case of dishonesty but rather one of unreliability. A paragraph of the judgement partly read: “As of 31 December 2014, the total losses were £12,922,174, with trade creditors (which includes those working for the company) of £3,737,445 and associates being £14,407,929.
“By 31 December 2015, the total losses were £24,913,106 with the trade creditors (which includes those working for the company) in the sum of £5,635,596 and associates being £19,681,779. By 22 April 2016, the total losses were £25,671,167, trade creditors (which includes those working for the company) £5,850,730 and associated companies £20,313,691. The trade creditors rose by £2,113,285 even taking into account that certain liabilities have been discharged. The associated companies’ debt during this period rose by in excess of £5 million.”
In summing up, the court said: “However, this does not mean that the case is any less serious. The public interest is served in this case, in my judgement by disqualifying Mr Obaigbena for a period of seven years.”