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Loan Facility’s Reconciliation: Stallion & Zenith Bank To Be Audited

Justice (Prof) Chuka Obiozor of a Federal High Court, in Lagos, ordered Stallion Nigeria Limited and Zenith Bank Plc, to submit themselves to KPMG, an Auditing firm, for the purpose of reconciling a disputed over twenty three billion naira (N23, 388,188,765,49) indebtedness between the companies

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Justice (Prof) Chuka Obiozor of a Federal High Court, in Lagos, has ordered Stallion Nigeria Limited and Zenith Bank Plc, to submit themselves to KPMG, an Auditing firm, for the purpose of reconciling a disputed over twenty three billion naira (N23, 388,188,765,49) indebtedness between the companies

Justice Obiozor gave the order sequel to a Motion on Notice filed by Stallion Nigeria Limited.

Other plaintiffs in the suit are; Westex Investment Limited, Hyudai Motors Nigria Limited and Stallion NMN Limited, while the defendants’ are; Zenith Bank Plc and the Corporate Affairs Commission (C.A.C)

The order would enable both Stallion Nigeria Limited and Zenith Bank Plc, to agree on the actual amount due for payment from a N14.5 billion loan facilities granted to the Stallion conglomerate, which Zenith Bank claimed has risen to N23,388,188, 765.49 billion, with accrued interest.

But Stallion on the other hands denied any liability to the bank, saying it had fully repaid the loan facilities and the accrued interest.

Zenith Bank, through its lawyer, Mr. Kemi Balogun (SAN) said it had written a demand letter dated May 15, 2020, to the alter ego of Stallion Nigeria Limited, Mr Sunil Vaswani, demanding for the immediate payment of outstanding N23,388,188,765.49 billion, allegedly owed by the conglomerate.

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Consequent upon the letter of demand and the disagreement over the indebtedness, Stallion Nigeria Limited instituted an action against Zenith Bank at the Lagos division of the Federal High Court, claiming among others that the bank acted in bad faith by debitting its accounts with illegal charges and arbitrary interest and also for rejecting discussions and agreement aimed at reconciling the the group’s accounts through an independent firm of auditor.

Stallion group in an affidavit in support of the Motion on Notice, stated that it has been maintaining a banking relationship with Zenith Bank for almost three decades in the course of which the bank availed several loan facilities to the conglomerate.

The company added that the facilities granted were to finance the importation of rice, fish, fertilizer, automobiles, purchase of Negotiable Duty Credit Certificates and payment of duties.

Adding that in compliance with it’s obligations, it made payment in liquidation of the various facilities and enjoyed a mutual beneficial relationship with Zenith Bank.

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The company also stated that a substantial part of the facilities advanced to the first plaintiff, Stallion Nigeria Limited, was to cover various Letter of Credit with a covenant to convert the loan facility’s which was denominated in Dollars to Naira within 180 days of the facility.

Adding that trouble started when upon the recession in year 2015, Zenith Bank Plc began to apply exorbitant interest rate on the facilities and also stopped supporting its businesses and that upon discussion with the bank and it’s solicitors starting from August 2017, it sought to resolve the matter amicably, without conceding any indebtedness and consequently offered to pay the sum of N4.6 billion naira subject to the reconciliation of it’s accounts with the bank.

It said; “base on its discussion with Zenith Bank and to show good faith, Stallion made a lodgement of N4,290,428,874 billion, in cash and proceed of the sale of it’s shares in the same bank”.

Stallion also stated that it has also made supplies of vehicles to Zenith Bank without receiving payment up to the value of N1,544, 159, 999.96 billion and that it also secured a purchaser for a pledged property at Plot 1114, Adesola street, Victoria Island, Lagos, for the sum of N3, 500,000.00 million and added that Zenith Bank failed and neglected to give approval for the sale until the offer from the buyer.

“Despite the huge payment made towards liquidating the alleged indebtedness, Zenith Bank continue to maintain without justification that the Stallion are still oweing.

Stallion group said it requested for reconciliation of it’s accounts vide a letter dated September, 2018 and that it also requested for details of debit charged on Overseas Line (OSL) from the bank, but that despite several reminders, the Zenith Bank refused to respond to the letters.

Adding that from the audit conducted on its account from the period between 2012 till date, it was discovered that Zenith Bank had charged unauthorised and illegal interest, management fees, COT-VAT fees, Finance charge, LC Charges to the tune of N18, 369, 960 billion.

It also averred that for the same period and specifically up to August 31, 2019, it has made a total payment of N118, 823, 641, 815, .50 billion, while between September 1, 2019 and April 2020, it also paid in good faith and good will various sums totalling N707, 549,760 million, subject to reconciliation of it’s accounts by the parties.

Stallion also averred further that contrary to the explicit statement in the letter of offer that each tranche if the facilities shall be for a maximum tenor of 180 days, Zenith Bank blatantly failed to comply with the tenor and continued to charge interest on the dollar denominated facilities which should have been converted to naira.

“As a result of the failure to convert at the due date in accordance with the contractual agreement and the letter of offer , the figures claimed by Zenith Bank as due on the Letters of Credit are false and unobtainable.” The plaintiffs said.

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Stallion further stated that it engaged the service of an Audit firm to conduct and review the various Letter of Credit and that the report from the auditor established that the total value of the said Letter of Credit liquidated on the 180 days from the date of opening at the average daily rates prevailing at CBN window is N65, 446,742, 668.72 billion but that Zenith Bank continued to maintain different figures as the alleged indebtedness of the plaintiff which confirm that the bank is just putting out inflated and unsupportable figures.

It was further stated that contrary to the agreement reached between the parties, Zenith Bank proceeded to institute simultaneously by way of originating summons two actions in suit No FHC/L/CS/571/19 between Zenith Bank PLC vs Stallion Nigeria Limited and Others as well as suit No FHC/L/CS/ 866/2019, to determine that the Stallion and Sunnil Vaswani were indebted to the bank, but that upon service of the Hearing Notice, the first plaintiff (Stallion) became aware of the suits and filed application to strike it out, but Zenith Bank opted to discontinue both suits.

The plaintiff stated that afterwards, it again engaged Zenith Bank towards amicable resolution of the dispute and that at a meeting held in early January 2020 with the Executive Directors of the bank and other officials, it was agreed that the firm of KPMG will be appointed to conduct an audit of the company’s accounts, but that surprisingly, Zenith Bank reneged on the agreement to appoint KPMG as auditors but started raining false allegations of diversion of funds which had been denied and debunked severally.”

The plaintiffs added that it has become apparent that Zenith Bank is determined to stick to the unfounded and inflated claim of indebtedness against it and is planning to take unorthodox and adverse steps against the interest, goodwill and assets of the plaintiffs and other associate companies contrary to the agreement between the parties.

Stallion said that upon proper reconciliation of it’s accounts, it is obvious that the company is not indebted to Zenith Bank and that the securities pledged for the facilities stand discharged.

Meanwhile, the matter has been adjourned till February 17, for report on progress made as regards the reconciliation by KPMG.

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Top Court News is a product of a dedicated Journalist, owner of I-Wahab Media The Publisher started his Journalism career with Murhi International TV, MiTV in 2003 before working with Radio Nigeria, Lagos Operation, as a Judicial Correspondent. He is presently the Chairman of the National Association of Judicial Correspondent, NAJUC, Ikeja Branch and he is the Vice Chairman of Nigeria Union of Journalist, NUJ, Radio Nigeria Chapel. topcourtnewsng.com is out to serve you with informative and educative News in the Judiciary sector. To put an end to the under reported activities of the sector among the three arms of government

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Court Orders Sanwo-Olu, First Bank, NNPC, AMCON To Stop Construction At Lekki

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Justice Olukayode Ogunjobi of a Lagos State High Court in TBS has ordered all parties in respect of disputed land at Lagoon View Development Scheme (Oju Olokun), Chevron Drive in Eti Osa Local Government Area of Lagos State to maintain the status quo antebellum pending determination of the suit.

The judge ordered that all construction on the disputed land measuring about 101.673 Hectares should be stopped and the defence parties should appear before it and shows why it should not grant all reliefs sought by the claimants.

Justice Ogunjobi ordered was sequel to an application of ex-parte dated February 22, 2022, filed before the court on behalf of the claimant against Lagos State Government, First Bank, NNPC, AMCON and others.

The claimants are Alhaji Shehu Adio Kassim Lumosa and others

While the respondents are the State Governor, Babajide Sanwo-Olu, Attorney General and Commissioner For Justice, State Land Bureau, Lagos State Development & Property Corporation Limited, LSDPC.

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Others were First Bank of Nigeria, Nigeria National Petroleum Corporation Limited, NNPC, Asset Management Corporation of Nigeria, AMCON, Ontario Oil and Gas Limited, and Suntrust Savings and Loans Limited.

Appearing before the court on the memorandum of claims against the respondents in respect of the property forming part of the Estate of Madam Iyalode Efunloye Tinubu, a Senior Advocate of Nigeria, Dr Dada Awosika urged the court to grant the ex-parte application in the interest of justice.

Dr Awosika informed the court that his application is supported by 51 paragraph affidavit, exhibits and written address to show cause why the applications should be granted.

The parties were not present in court and didn’t have legal representation despite being served.

In his ruling, Justice Ogunjobi stated that having considered the depositions in affidavit support where the claimants averred that the eleven respondents/defendants have concluded arrangements to unjustly and illegally take possession of the disputed land, the court would grant the ex-parte.

It would be recalled that the disputed land formed part of the land which Adam Akinfolabi Akindele of Adamakin Investment and Works Limited was entrusted as the Attorney of the Estate of Madam Iyalode Efunroye Tinubu.

 

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Wema Bank Debunks Money Laundering Allegations As Court Strikes Out Case

Magistrate A.O. Layinka discharged the defendants and struck out the charge following the Legal Advice from the Office of the Director of Public Prosecution (DPP), Lagos State that no prima facie case has been established against them.

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The management of Wema Bank Plc has described media reports on money laundering and bribery allegations against its member of staff and a certain bank customer as malicious and misleading.

This is coming just as an online media platforms Sahara Reporters and some bloggers are twisting a concluded court case to malign the bank.

The said case of money laundering and bribery allegations’ charges preferred against the Managing Director of Shibahwells Energy, Isaac Adewole, and a Wema Bank staff, Kingsley Ananwude has been struck out by an Ogba Magistrate Court, Lagos, for lack of merit.

Debunking the allegations in a statement signed by its Head of Corporate Communications, Funmilayo Falola, Wema Bank noted that its attention has been drawn to the media reports on money laundering and bribery allegations on certain customer’s transaction.

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It lamented that the publication went ahead to mention the names of certain Wema Bank management staff to be allegedly involved in the said transaction.

The statement stated that: “The Bank wishes to state categorically that there is no merit in the article, and it is a malicious publication against members of our staff and the Bank’s customer.”

The Bank, according to the statement, also claimed that the allegations were being peddled by an aggrieved 3rd party, Timi Popoola.

It added that Mr. Popoola had voluntarily released his property as part of a collateral to secure a loan obtained by the Bank’s Customer.

Specifically, on Tuesday March 15, 2022, the case no. MIK/B/6/2022–Commissioner of Police vs. Adewole Isaac & Kingsley Ananwude, for alleged stealing and money laundering involving N1.7billion was struck out.

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Magistrate A.O. Layinka discharged the defendants and struck out the charge following the Legal Advice from the Office of the Director of Public Prosecution (DPP), Lagos State that no prima facie case has been established against them.

It will be recalled that the defendants were arraigned in Court on February 9, 2022, in Charge No. MIK/B/6/2022–Commissioner of Police vs. Adewole Isaac & Kingsley Ananwude, for alleged stealing and money laundering involving N1.7billion.

After pleading not guilty, the Court granted the defendants bail and then adjourned the case till 15th March, 2022, for trial.

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On Tuesday 15th March, 2022, when the case was mentioned in Court, Magistrate Layinka discharged the defendants and struck out the charge for lack of Merit after relying on the Legal Advice from the Office of the DPP, Office of the Attorney General of Lagos State/Ministry of Justice.

In the Legal Advice signed by the DPP of Lagos State (a copy of which was sighted by our correspondent), the DPP after an extensive review of the duplicate case file provided by the police authority, stated that the defendants were arrested based on rumours by one Timi Popoola and nothing more!

The DPP further stated that there is insufficient evidence to predicate the offences upon which a criminal charge was brought before the Court.

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Folawiyo Seeks Injunction Against Amcon’s Ex Parte Order

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A Lagos-based businessman, Mr Tunde Folawiyo, has filed an exparte motion before a Federal High Court in Lagos seeking an order of stay of execution of an ex-parte orders made against him in satisfaction of a judgement debt.

Justice Lewis Allagoa had made orders against Mr. Folawiyo in a suit filed by the Asset Management Corporation of Nigeria (AMCON) over Folawiyo’s alleged unpaid debt of N727.9 million in relation to a company directorship at Compagnie Generale de Logistique.

Folawiyo, in a suit no: FHC/L/CS/799/2020, is seeking an order of stay of execution of the ex-parte orders made against him on March 24, 2022 pending the hearing and determination of his Motion on Notice seeking to set aside the ex parte orders.

He is praying for the following relief: An order restraining the AMCON either by itself, agents, privies, servants or through any person(s) from taking any steps howsoever to enforce the ex-parte orders made against the applicant by the Court on 24th March 2022 pending the hearing and determination of the applicant’s Motion on Notice seeking to set aside the ex parte orders.

The ex-parte orders were predicated on the judgment of Justice Ibrahim Buba in Suit No: FHC/L/CS/207/2017; Asset Management Company of Nigeria (“AMCON”) v Compagnie Generale De Logistique & Others in 2017 (“Previous Suit”) in favour of AMCON in the sum of N522,464,978.66 against the defendants in the suit.

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The applicant said he was not a party to the previous suit and was not served with the judgment on it.

AMCON claimed the applicant is a director in Compagnie Generale De Logistique, which took loan from Spring Bank and which judgment was principally obtained in the previous suit.

Contrary to the representations made by the Plaintiff, the applicant said he was not a Director of Compagnie Generale De Logistique at the time of the previous suit and was not in any way connected to the loan transaction with Spring Bank.

The applicant said he is, therefore, not a “debtor” within the contemplation of Section of 61 of the AMCON Act as to warrant the interim forfeiture of his assets and freezing of his bank accounts on account of the judgment obtained in the 2017 Suit.

He argued that a combined reading of Sections 49(2),50(2) and 61 of the AMCON Act would reveal that only current directors of a company fall within the definition of “debtor” as to warrant the freezing of their assets or accounts.

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Mr Folawiyo told the court that AMCON failed to disclose or suppressed material facts about the status of the Applicant in Compagnie Generale De Logistique, the principal judgment debtor in the previous suit.

He added: “The exparte orders were obtained malafide against the applicant and constitute an abuse of court process.

“The applicant has a filed a Motion on Notice praying for the setting aside of the said ex- parte orders.

“The applicant’s pending set aside motion raises serious issues on why the Ex-parte orders ought not to have been granted.

“It is in the interest of justice to grant this application pending the hearing and determination of the applicant’s Motion to Set Aside the Ex-parte Orders.”

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Mr Folawiyo argued that the originating summons filed by AMCON is incompetent as it had expired at the time of the grant of the ex-parte order.

He expressed concern about the impact the orders would have on his employees as well as the reputation of the three-generational family business he has worked hard to maintain and grow over the years.

Tunde Folawiyo is the son and heir to the late Nigerian Businessman and philanthropist, Wahab Iyanda Folawiyo. Alhaji Wahab whose father, Tijani was a wealthy local Merchant in the Colonial era, was known for funding , building orphanage homes and funding several local sports championships. In expanding his late father’s legacy, Mr Tunde Folawiyo attended the London School of Economics to broaden his business perspective and investment choices in addition to being a Barrister of the Court of England and Wales as well as Nigeria. In 2016, Folawiyo and his firm announced its first production of crude oil from the Aje Field, the first producing field outside of the Niger Delta area in Nigeria.

Reports say the multi-million dollar investment was aimed at reducing oil production pressure from the Niger Delta region. He is currently the Chairman of Yinka Folawiyo Group, established by his father in 1957.

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