Messy Details Of How Lagos Big Boy Slams Zenith Bank With N6.4billion Law Suit

Couple of hours ago, a federal high court sitting in Lagos South West Nigeria has adjourned for further hearing N6,441,369,617.73 suit instituted against Zenith Bank Plc, by a Lagos businessman, Olusola Anthony Adejugbe and his company Tonique Oil Services limited over alleged excess and illegal changes.

By a further amended statement of claim accompanied by written statement on Oath sworn to by Mr. Olusola Anthony Adejugbe and filed before the court by Barrister Lanre Ogunlesi SAN, the businessman averred that in the course of its business engagements his company Tonique Oil Services Limited obtained several credit facilities from Zenith Bank PLC while he pledged three of his properties as securities for the loan facilities.

The plaintiffs averred that three different transactions leadings to this litigation occurred in the company’s current account whereby excess interest and charges were discovered. The company demanded for a reversal but the bank refused.

A forensic accounting firm was commissioned to scrutinize and analyse the Company’s account. It was then discovered that between August 2006 and December 2013, excess interest and charges on the Company’s account by Zenith Bank Plc amounted to N1,842,471,801.99.

By a letter dated 19th February 2008 the bank granted Tonique Oil Services Company commercial paper facility of N2,568,644,276.09 to finance the purchase of 30,000MT of Petroleum products, but N2,501,270,000 was credited into the account of the Company.

However, it was alleged further that instead of Zenith Bank financing the purchase of 30,000MT of Petroleum products for the company as per letter of offer the entire sum of N2,501,270,000 was diverted by the bank for the purchase of its own shares during the bank’s initial public offer, a conduct that is unethical, unprofessional and reprehensive.

In addition, out of the sum of N104,363,212.03 assessed as dividends payable on the bank’s shares only N42,173,498.43 was credited into the company’s account leaving outstanding balance of N62,169,713.60.

The bank’s shares purportedly bought by the Tonique Oil Company with the facilities granted by Zenith bank were managed by the bank so much that the bank eventually liquidated the shares after the value has nosedived and depreciated.

Another activity on the Tonique Oil Company current account with the bank was the sale and purchase of a property in Port Harcourt that belong to one of the shareholders /customers of the bank who needed to clean up some of his obligations to the bank. It was the bank who  introduce Tonique Oil company to the shareholders 50,000 square meters of land out of which the company bought 20,000 square meters for the purpose of expanding its business earnings.

To facilitate the purchase of the land the bank offered the company a term loan of N500,000 and it was part of understanding of the company and the bank that after the purchase of the land, the bank will finance the company’s Tank forms to be built thereon.

After the purchase of the land, the bank took possession of the title documents of the land as collateral but reneged on the promise and understanding to finance the Company’s tank farm on the land and since 2008 the land had been under the management of the bank and the same had been lying fallow.

In this circumstance, the plaintiffs contended that Tonique Oil Company is not indebted to the bank and any alleged indebtedness could only have been arisen as a result of the unconciousable and illegal acts of the bank’s officials in debiting the company’s account with astronomical spurious interest charged, consequently the plaintiffs also contended that such interest charges are illegal in that they contravene the Central Bank of Nigeria Monetary Credit and Foreign Exchange/Trade guidelines.

The plaintiffs financial consultant computed other charges that were passed into the account of the company, base on relevant policy circulars, guide to bank charges of Central bank of Nigeria and discovered that the bank excessively overcharged the company on interest on overdraft, COT, and VAT on COT, Management Fees, upcountry transfer fees, interest on commercial paper, foreign exchange purchases and letter of credits.

Consequently, the plaintiffs are contending that they are not indebted to the bank rather the bank has overcharged the plaintiffs to several billions of Naira.

The plaintiffs are urging the court to declare that Zenith Bank being a bank within the supervisions and control of CBN cannot charge interest on any facilities granted to them beyond the official approved policy rate of the Central bank of Nigeria.

The plaintiffs are also urging the court not only to restrain the bank from selling their property pledged as securities for the loan but to also compel Zenith Bank to pay Tonique Oil services company the sum of ₦6,441,369,617.73 being the total excess charges debited into the company’s account by the bank and interest on the same amount at the rate of 21% per annum from the date of judgement of the court until final liquidation.

However, by its further statement of defence accompanied with statement on oath sworn to by Senior Assistant Manager internal control and Audit Department of Zenith bank Mr. Vincent Ohanugo and filed before the court, the bank denied almost all the company’s claim and stated that the company was granted the following loans.

₦2.5 billion regular commercial paper, $36 million united state Dollars import finance facility, $6,648,000 commercial paper /usance facility $9million Dollars import finance facility via usance facility $11million Dollars short term import facility of ₦500 million.

The bank averred that the plaintiffs authorised zenith Registerar Plc to take steps to purchase the shares of the bank on is their behalf and the plaintiffs pledge 3.5million and 17,154,300 units of the shares respectively in favour of the bank and authorised the bank to sell them to recoup part of the credit facilities the bank granted them, therefore the allegation of unethical conduct, lack of competence and professionalism against it by the plaintiffs was made out of malice, confusions and frustration on the part of the plaintiffs.

The bank averred further that there was no understanding entered into by the company and the bank to finance the construction of tank farm for the company. The plaintiffs assertion that they are no longer indebted to the bank is a bare denial and therefore challenges the plaintiffs to provide evidence of payment of all the credit facilities availed to them by the bank.

The bank states that the plaintiffs suit does not disclose any cause of actions against the bank as they are still indebted to the bank in the sum of N8,464,176,356.52 as at 31st of January, 2013 therefore urge the court to dismiss the suit as been frivolous, vexatious, as it amounts to abuse of the process of the Court.

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