10th February, 2011
A stock broking firm, Vetiva Capital Management Ltd may cease to exist if a Federal High Court sitting in Lagos accedes to the request of Bank PHB that the company should be wound up over unpaid debt of N4.2 billion.
According to a petition filed before the court by the law firm of A.O.S Practice on behalf of Bank PHB, the scenario that led to the current legal action started sometime in May 2008 when Vetiva Capital Management Ltd applied to the bank for a pre-private placement bridge facility in the sum of N3.5 billion on behalf of one of its clients, Messrs Caverton Offshore Support Group Ltd., to raise N16 billion to scale up the clientsâ€
The request was granted and Vetivaâ€
The bank then disbursed the facility to the respondentâ€
In compliance with the terms of the agreement, a deed of corporate guarantee dated 18 June, 2008 was issued and executed by Vetiva Capital Management.
In addition, a board resolution of Vetiva company dated 19 June, 2008 was issued by the company authorising the aforesaid corporate guarantee which was issued on behalf of the company.
Notwithstanding the grant of the facility to Vetivaâ€
Upon the failure of Vetiva Company to liquidate the loan, the bank called in the corporate guarantee given by the company but the company requested for additional 180 days to liquidate the outstanding debt. Meanwhile, compound interest continued to accrue on the respondentâ€
The petitioner contended that in view of the respondentâ€
“Consequently, the company is insolvent and unable to pay its debts in the circumstances, it is just and equitable that Vetiva Capital management Ltd be wound up,” the petitioner said
Justice Olatoregun-Isola has adjourned the case for further hearing.