25th November, 2010
Barely five years after the consolidation exercise of banks, share crisis has erupted in Unity Bank Plc as aggrieved shareholders of Centre Point Bank Plc have dragged the bank and some of its principal officers to court over alleged unfair treatment in the merger arrangement.
On the defending side of the impending suit are the managing director and chief executive officer of Unity Bank Plc, Alhaji Falalu Bello, the chairman, Board of Directors, Professor Akin Mabogunje, Unity Kapital Assurance, Security and Exchange Commission and Central Bank of Nigeria.
In a claim filed before a Federal High Court in Lagos by the former chief executive officer of Central Point Bank, Chief Dennis Onyemachi Odife and Amek Holdings Limited, the company appointed to represent the interest of shareholders of Centre Point Bank on behalf of the said aggrieved shareholders, it was alleged that the defendants, who had already determined that any merging or acquired banks needed a minimum capital of N750,000,000 to secure a directorâ€™s seat, wrongfully and through devaluation of asets, suppression of facts and figures, deliberately denied the plaintiffs a representative seat on the board of Unity Bank.
To achieve this, the defendants wrongfully understated and devalued some of plaintiffsâ€™ assets and excised others from the merger arrangement. It was also averred that it was on the basis of the scheme of the merger and more importantly, information provided in the court papers filed in suit FHC/L/CS/1198 indulging the wrong information, that the entire assets and liabilities of Centre Point Bank Plc were being acquired by Intercity Bank Plc as acquiring bank under the scheme that the Federal High Court granted its order of 22 December, 2005.
The plaintiffs averred further that as part of its scheme to undervalue one of its assets, Centre Pointâ€™s head office at 497, Abogo Langema Street, Central District, Abuja, the defendants deliberately misstated the date of valuation to be 2004 instead of 2003 in the scheme of the merger document.
The defendants incorporated this purported re-valuation of this fixed asset in the financial records of the consolidated bank and thereby denied the plaintiffs a total value of N400 million which shares were not issued in their favour and which were entitled to in Intercity Bank Plc renamed Unity Bank Plc despite several protests.
The plaintiffs further averred that the defendants excised and did not take over the following assets of Centre Point Bank Plc: a loan of N872.5 million due from Ferdinand Oil Mills Plc, Centre Point Investment Limted, Centre Point Trustees Limited, Langema Street Properties with its 14-bungalow housing estate in Nasarawa State and 12 plots of land located in various parts of Abuja.
It was also averred that in spite of the fact that the defedants were alleged to have refused to take over all the assets and liabilities of the defunct bank, they went ahead to transfer and take over the following quoted shares belonging to the defunct bank in the following companies: First Bank, Ferdinand Oil Mills Plc, Mutual Benefits Assurance and Centre Point Unit Trust.
The exchange ratio of the merger was supposed to be eight shares of Unity Bank Plc for every 10 existing shares of Centre Point Bank Plc, instead of the one share of Unity Bank Plc exchanging for every nine shares of the defunct Centre Point Bank Plc.
Consequently, the plaintiffsâ€™ claims against the defendants are as follows:
An order of the court setting aside the approval of the scheme of arrangemet for the Unity Bank Plc merger since it was obtained by fraud; an order amending the order of the Federal High Court that an order is made transferring and vesting in Intercity Bank Plc all the assets, undertakings and liabilities of Centre Point Bank Plc; an order assigning a a seat on the board of Unity Bank Plc to a nominee of Centre Point Bank Plc with full rights and privileges effective from the date of the merger and general damages in the sum of N500 million.