A federal high court, in Abuja, on Friday discharged Binance executives, Tigran Gambaryan and Nadeem Anjarwalla of tax evasion. Both men were dragged before the court by the Federal Inland Revenue Service, FIRS, for allegations bordering on tax evasion and aiding fraud.
This court gave the ruling after the FIRS amended its charges in response to Binance appointing a Nigerian representative, Ayodele Omotilewa. The FIRS initially filed legal proceedings against Binance and Gambaryan on March 22, 2024, accusing them of tax evasion.
On May 17, 2024, the FIRS amended its lawsuit, alleging Binance allegedly failed to collect and remit various categories of taxes to the federation, particularly the Value Added Tax (VAT) and Company Income tax (CIT), as stipulated by Section 40 of the FIRS Establishment Act 2007 as amended.
The Minister of Information, Idris Mohammed, had said that the cryptocurrency trading platform, Binance, had a turnover of over $20 billion in Nigeria in 2023 alone.
Following the agreement by the legal team on both sides, Justice Emeka Nwite further adjourned to today, June 14 for the arraignment of Binance and Gambaryan.
At the resumed proceedings on Friday, counsel for Binance, Tonye Krukrubo SAN, told Justice Emeka Nwite that his client has forwarded the name of its official representative to the FIRS and to the court.
Counsel for the FIRS, Moses Idehu, confirmed the same and asked the court’s permission to substitute all the previous charges with the fresh amended one dated June 13, 2024.
In the fresh charge by the FIRS, Binance is now listed as the sole defendant without the names of Gambaryan and Nadeem.
In the charge, the Binance trading platform was accused of offering services (in the buying and selling of cryptocurrencies and the remittance and transfer of those assets) to Nigerians while failing to deduct the necessary Value Added Taxes (VAT), arising from its operations.
Count four of the charge reads: “That you BINANCE HOLDINGS LTD on or about the 1st February 2024, in Abuja, FCT within the Jurisdiction of this Honourable Court, whilst involved in the offering of services to subscribers on your trading platform, known as Binance did aid and abet those subscribers on your trading platform to unlawfully refuse to pay taxes, or neglect to pay those taxes and in so doing committed an offence contrary to and punishable under the provisions of S.94 of the Companies Income Tax Act (as amended).”
After the charge, the prosecution counsel, Idehu urged the court to direct that the Binance representative from Nigeria should enter the dock and take his plea on behalf of the corporation he represents.
But counsel to the defendants contended that Nigerian law does not mandate a representative of a company that is sued to stand inside a dock and take a plea.
They argued that a representative of a company that is sued may not need to attend proceedings and can even write a letter to the court in respect of the court informing it of the company’s position on the case.
In addition, the defense seized the moment and urged the court to discharge Gambaryan and Nadeem from the FIRS case since a representative had been officially sent to the proceedings.
The FIRS also confirmed that the matter is now between the federal government and Binance.
Justice Nwite said on the issue of whether the representative of Binance should be in the dock, parties should file a written address on it so he can rule on it.
Subsequently, he held that the “charges filed on March 22, 2024, and May 17, 2024, are hereby struck out.”
The judge also struck out the names of Gambaryan and Nadeem from the case directing that the case is adjourned to July 12 for plea.
He added that the lawyers to the parties should file processes on whether the Nigerian representative should be in the dock or not.
