Planned Sale To Huaxin Cement: Why Court Dismissed Lafarge’s Bid To Stop Lawsuit
A Federal High Court in Ikoyi, Lagos, has dismissed a motion by Lafarge Africa Plc challenging the court’s jurisdiction to hear a suit against its planned sale to a Chinese investor, Huaxin Cement Limited.Strategic Consultancy Limited, a Nigerian company and shareholder in Lafarge Africa, had sued the cement company over its planned divestment of 83.8 percent majority shares held by its parent company in the Nigerian cement industry.
Lafarge Africa, a publicly traded company on the Nigerian Exchange, has a significant history in the country’s cement industry. It acquired 83 percent stake in three federal government-owned cement companies during the privatisation exercises of in 2001 and 2002. More recently, its Africa’s parent company, Holcim Group, a swiss-based firm holding 83.81% of Lafarge Africa’s issued share capital, underwent an internal restructuring, which was duly notified to the Securities and Exchange Commission.
The plaintiff alleged that the sale was done secretly without giving minority shareholders the opportunity to acquire the shares, and that the sale to an unregistered foreign company violates Nigerian regulations. The action was instituted by Strategic Consultancy Limited based on the following: The sale was done surreptitiously without affording Strategic Consultancy Limited and the other minority shareholders the opportunity to acquire the shares; The purported sale to a foreign company that is not registered in Nigeria runs foul of regulations and statutes such as the Companies & Allied Matters Act, 2020, the Securities & Exchange Act and the Nigeria Investment Promotions Act on the right of minority shareholders and prohibition of transactions with unregistered foreign entities.
After hearing the submissions of Dr D.A. Awosika (SAN) counsel for the Plaintiff and Babatunde Fagbohunlu (SAN) counsel for the 1st defendant and Uzoma Azikiwe (SAN) Counsel for the second defendant, Justice Lewis Allagoa, in his ruling, on Thursday, May 15 dismissed the preliminary objection by Lafarge Africa, stating that the court has jurisdiction to entertain the suit. The judge also ordered that two additional companies, Caricement BV and Associated International Cements Ltd, be joined as defendants in the case.
Also, Justice Allagoa on the third ruling, granted the prayer of the prosecution counsel for leave to serve the two new parties court proceedings outside of jurisdiction. He said, “It is hereby ordered that the persons sought to be joined herein and hereby joined as prayed and leave to issue and serve the Originating Summons out of jurisdiction is hereby granted”.
The matter has been adjourned to June 11, 2025, for further proceedings.
