Court Puts Multi-level Marketing Firm, Edmark, Under Receivership Over Directors’ Dispute, Alleged Fraud

A Federal high court sitting in Lagos has ordered a receiver/manager to take over the operations of Edmark Direct Marketing Limited, a popular multi-level marketing company which now has investments in real estate, financial services, events hosting and more.

The order given by Justice C.J. Aneke followed an ex parte application filed by Mr Ade Adedeji, SAN on behalf of a petitioner, Mr. Etim Maurice Anthony, an aggrieved director of the company.

Mr Etim, the Nigerian minority share holder and petitioner is alleging that Edmark’s Malaysian Chairman/CEO, Mr Low Ban Chai has siphoned funds from the company into other companies: Edmark City Development Limited and ED2E Technology Limited as well as alleged forgery of company documents.

He also cried foul over the running affairs of the company contrary to the agreement reached by Mr Low and himself as well as the latter single-handedly appointing Donald Anih Esq as company secretary and two Filipinos: Wapiano Bienvenido and Jrolan Noel Hao as directors.

According to the court documents made available to our correspondent, the suit FHC/L/CP/890/22, was filed against Edmark Direct Marketing Limited, Low Ban Chai, Edmark Holdings Limited, Wapanio Bienvenido and Jorolan Noel Hao who are the respondents.

The petitioner was seeking a declaration that Mr Low was running Edmark in a manner that is oppressive, unfairly prejudicial, illegal and in breach of of the rights of the petitioner according to the Company and Allied Matters Act (CAMA) relating to right of members to attend meeting and vote, on appointment of and removal of secretary, appointment and removal of director and duty to keep open accounting records and annual accounts.

He sought an order setting aside the purported appointment of Wapiano and Noel as Edmark directors, an order setting aside the appointment of Mr Daniel Anih as Company Secretary of Edmark, as well as an order setting aside the transfer of  Low’s shares in Edmark Direct Marketing  to Edmark Holdings Limited and the registration of the said shares.

He wanted an order for the appointment of the audit firm of Deloitte Nigeria to conduct a forensic audit of Edmark’s accounts, income, expenditure, bank statements and finances from 2010 till date and directing the respondents or their agents to provide all financial and accounting records to enable the auditor conduct a thorough job

He sought a declaration that the manner Mr Low was running the company was illegal and a breach of the Company and Allied Matters Act (CAMA) sections relating to right of members to attend meeting and vote, on appointment of and removal of secretary, appointment and removal of director and duty to keep open accounting records  and annual accounts.

An injunction restraining Edmark, Mr Low either by themselves, their proxies, servants or agents from further passing any board or general meeting resolutions without duly complying with relevant sections of CAMA.

That was not all, he sought an order directing Edmark and the other respondents to conduct the affairs of the company in a manner that is fair, equitable and just to all shareholders.

An order directing first and second respondents to purchase the petitioner’s shares at the current market value after valuation of the first respondent’s assets. And alternatively, in case of a deadlock, winding down of the affairs of the company.

Justice Aneke granted the petitioner’s prayers, it was on account of that that the Court bailiffs sealed the building and handed it to the receiver/manager, Barrister Seyi Akinwunmi.

The court documents revealed that the petitioner started the company on July 26, 2004 after resigning as a staff of Lagos Chamber of Commerce and Industy and seeking to set up a marketing platform to sell products of reputable companies in the Nigerian and African Markets.

He immediately commenced products import and promotion operations at trade fairs such as 25th Kano International Trade Fair 27 November-6 December 2004, Zamfara Domestic Trade Fair, 26 April-8 May 2005, 27th Kaduna International Trade Fair, Lagos International Trade Fairs in 2006 and 2008.

While running Edmark, with the assistance of embassies and high commissions, he travelled to many countries including Malaysia, to strengthen the company’s platform for attracting foreign products for sale in Africa , commencing with Nigeria and Ghana.

In Malaysia, the petitioner met and engaged several potential partners including Low Ban Chai. In the course of the meeting, the petitioner demonstrated that he has built a solid reputation and goodwill for the company-and thus, they struck a partnership, agreeing to import, distribute and market health products in Nigeria.

Along the line, Low Ban Chai offered to become a major stakeholder in Edmark with Mr Etim retaining 10 per cent stake.

It was Mr Etim who sent a letter inviting Mr Low to Nigeria to explore the potential of the African market for health products in 2007.

Trouble initially began when they both decided to start from Ghana, after the Petitioner had travelled to Ghana to make arrangements for take off of operations, after sharing the business intelligence garnered, Low, his partner, circumvented the arrangement by setting up his own subsidiary in Ghana. And went a step further to offer the petitioner $2000 to buy him out. Mr Anthony refused the offer.

That was not all, he also came to Nigeria and registered his own company, Low Ban Chai Limited to compete with Edmark, for some in explicable reason his company failed miserably and he had to return to Mr Etim for partnership again.

After a series of negotiation, Mr Etim agreed for Mr Low to join the company again in 2009, the parties entered into a series of agreements to restructure Edmark’s share capital and via a memorandum undated but stamped April 2010, the parties agreed to transfer 95 % shares of Edmark to Mr Low.

And in November 2010, they also increased the share capital of the company to 10,000,000 with Mr Low owning 9,500,000 and Mr Anthony owning 500,000. This arrangement meant the company had two directors and both are required to form a quorum at Edmark’s Board of director’s meetings.

No sooner had this arrangement been put in place, contrary to the equitable participation and other equitable principles agree to, the petitioner was excluded in the management and administration of the company while Mr Low with Mr. Donald Anih Esq who acts as Company Secretary ran affairs of the company

In addition, Mr. Low with used Edmark’s platform to market a cryptocurrency called Edcoin and moved the proceeds of the sale $15,000,000 to Megawang Resources Limited which has since been moved offshore.

Furthermore, he is also about using the assets of Edmark to a float a microfinance bank (registration in progress) with a minimum deposit sum of N2billion.

To worsen matters, despite the fact that no validly convened board meeting held, the Malaysian businessman appointed two Filipinos to the board without the approval of the petitioner.

The matter has since come up for hearing and Mr. Ebun Adegborowa, SAN appeared for Mr Low and the other respondents while Adedeji SAN appeared for petitioner.

While addressing the court, Adegborowa pleaded that the parties be allowed to seek an out of court settlement. The matter was then adjourned till June 29, 2022