A UK court has disqualified Nduka Obaigbena, founder of Thisday and Arise News, for 7 years as a director due to the compulsory liquidation of Arise Networks Ltd, caused by funding and financial difficulties related to the news channel’s operations.
The Judgment handed on the 8th of April, 2021 by the High court of Justice, Business and Property Courts of England and Wales revealed that as of 31 December, 2013 the company’s liabilities were “Losses of £3,854,112; trade and expense debts of £1,545,883; related company debts of £3,094,260.”
The application for a disqualification order filed under section 6 of the Company Directors Disqualification Act 1986 (‘the CDDA 1986’) disclosed that Arise came under increasing creditor pressure from late 2014 onwards in respect of increasing arrears due to creditors as a consequence of the company’s inability to pay its debts when due, as demonstrated by the evidence of creditor actions and demands for payment.
What the judgment said
- The company had £nil turnover throughout its trading existence and was wholly dependent on funds being provided by associated businesses in Nigeria
• By 31 December 2013, the company’s liabilities were: Losses of £3,854,112; trade and expense debts of £1,545,883; related company debts of £3,094,260
• In September 2014, the Nigerian Government introduced stringent exchange controls preventing the free-flow of currency from the country and seriously restricting the ability to transfer necessary funding to ARISE.
• As a consequence, by 31 December 2014, the company’s liabilities were: Losses of £12,922,174; trade and expense debts of £3,737,445; related company debts of £14,407,929
• By 31 December 2015, the company’s liabilities were: Losses of £24,913,106; trade and expense debts of £5,636,596; related company debts of £19,681,779
• By 22 April 2016, the company’s liabilities were: Losses of £25,671,167; trade and expense debts of £5,850,730; related company debts of £20,313,691.
The report added that despite some payments made, large sums were outstanding, citing that there was evidence that many creditors had been chasing sums outstanding to them for some time, which contradicted Mr Obaigbena’s assertion that agreements had been reached with creditors.