NDIC Drags Company To Court Over 21-Year-Old Debt


In a bid to recover a 21-year-old debt of N231,962,372.93, the Nigeria Deposit Insurance Corporation, the liquidator of Allied Bank of Nigeria Plc, has dragged a limited liability company, Okem Enterprises Nigeria Limited, and its Managing Director, Chief M.O. Nlemigbo, before a Federal High Court in Lagos, southwest Nigeria.

In a twenty-seven paragraph statement of claim filed before the court by a Lagos lawyer, Barrister Theresa Opara, it was alleged that Okem Enterprises Nigeria Limited on 13 August, 1991, made a formal application for a fund transfer facility.

Consequent upon this, the special facility was put together in such a way that the company would be able to draw against unclear instrument up to N10 million at the four different branches of the bank in Ikeja, Kano, Abuja and Port Harcourt.

By the said facility, Allied Bank, Oba Akran, Ikeja, Lagos branch, was allowed to use debit note to cover inter branch transfer cheques presented to it for collection by the company after necessary confirmation must have been obtained from the drawee branch that the debt notes issued had been absorbed and all other necessary charges including COT must have been recovered from the account as and when due.

However, the said fund transfer facility was allegedly misused by Okem Enterprises Company, and a large number of the company’s uncleared cheques were suppressed, thus giving rise to a large unauthorized lending exposure of the bank.

Upon discovery of the misuse of the transfer facility, the bank decided to discontinue the facility and accordingly informed the bank of this development. But the company appealed to the bank not to discontinue the fund transfer facility, and the bank granted concession to the company as the company undertook to indeminify the bank to the tune of N40 million while Chief M.O Nlemigbo executed a personal guarantee in the sum of N40 million in favour of the bank.

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When it became apparent that the company could not liquidate its entire debt to the bank, the bank in exercising its power under the all assets debenture, executed in favour of the bank by the company on 31 May, 1996, appointed a Receiver/Manager to recover the outstanding sum.

The bank was able to recover the sum of N10,645,000 through its turnaround management consultant Messrs Babington Ashaye.

By virtue of the statement of account of the company dated 16th January, 1998, the total sum outstanding to be paid to the bank is N231,962,312.93.

The plaintiff later wrote letter to the company to pay the outstanding debt but the company has since failed and refused to make further payments in respect of the outstanding debt.

Consequently, NDIC claims from the defendants jointly and severally are as follows: The sum of N231,962,372.93 being the outstanding balance of the loan facilities by the bank to the defendants.

Interest at the rate of 21% per annum from 17 January, 1998 until final liquidation and the cost of this legal action.

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