30th June, 2011
In a bid to recover a debt of N13.093 billion from Shell Petroleum Development Company, West Multi Purpose Cooperative Society Limited and United Bank for Africa Plc have dragged the company that owed so much money to the detriment of other funds users before a Federal High Court in Lagos.
Also joined as co-defendant is director, Cooperative Societies, Delta State of Nigeria.
Meanwhile, the court has restrained the company and its directors, officers and their agents from demanding and accepting money from ten commercial banks in Nigeria.
The court also barred the company and its agents from receiving any payment of sales or dividends on the shares it owned in the following companies and sister companies: Cordoros Capital Limited, Imperial Assets Manager Limited, MBC Securities Limited, Cashcraft Assets Management Limited, Law Union and Rock Plc, Maven Asset Management Limited, BGL Securities Limited, Kinley Securities Limited, Eurocom Securities Limited and UBA Stockbrokers Limited.
The court’s order was sequel to an application sworn to by the Principal Remedial Officer of United Bank for Africa, Mr. Yomi Dada and filed before the court by a Lagos lawyer, Mr. Oluwakemi Balogun.
The deponent averred that UBA granted upon request, a N10 billion mortgage facility to Shell Petroleum Development Company otherwise known as Shell Staff Cooperative Thrift and Credit Society, to finance acquisition of homes by members of staff in January 2007.
The loan was secured by irrevocable domiciliation of all the company’s members’ monthly contribution and deductions to be paid to the bank as well as legal mortgage on the property to be acquired by all members of staff of the company.
The defendant was to forward to the bank original of the title documents as well as all other duly executed documents required within four weeks of payment.
The company was also asked to ensure that its main account was always adequately funded to absorb the monthly loan deductions.
However, the company failed to carry out the instruction to domicile the deductions and contributions of staff members into its account with the bank.
The tenor of the facility was 180 months, while the company was to make monitised equal monthly principal and interest payment of N133,174,138.79 over the tenor of the facility, while it authorised the bank to exercise a right of lieu over its monies held in any other account with the bank in the event of default.
In gross violation of the terms and underlining principle of the executed offer letter, the company was alleged to have diverted the funds meant for the acquisition of properties into other use to wit: purchase of shares in some of the companys listed above and stacked huge sums of money with some of Nigerian banks.
United Bank for Africa Plc was constrained to write several letters to the company on the need to fund its account and the consequences thereof which can make the entire facility liable to be recalled.
Instead of paying the loan, however, the company admitted an indebtedness of N2,729,687,380.00 and requested the bank to write off the sum of N5,640,000,000.
The bank carried out forensic investigations and discovered that the company, acting through its authorised officials, deliberately perfected monumental fraud on the bank, forcing it to write a petition to the Economic and Financial Crimes Commission (EFCC), over alleged monumental fraud perpetrated by the company and its officials who were unjustifiably holding on to third party depositors’ funds advanced by UBA Plc in the ordinary course of business.
Consequently, some of the officials of the bank were arrested by the anti-graft agency and made statements.
The present outstanding indebtedness of the defendant in favour of the bank now stands at N13,093,013,638.18 as at 15 April, 2011, therefore, the bank urged the court, in the interest of justice, to freeze the company’s accounts which the it acceded to.