Insurance Directors Sued To Court Over N600b Loan


An insurance company, Koguna Babura Insurance Brokers Limited has dragged its Managing Director, Ibikunle  Taiwo and the Executive Director, Finance, Kingsley O. Echebiri before a federal high court in Lagos,  southwest Nigeria, over an alleged unauthorised procurement of N600 million loan on behalf of the company.

Joined as co-defendant in the ensuing legal battle is a financial service company, Kakawa Discount House  Limited which granted the loan.

In a statement of claim filed before the court by the law firm of Mallam Mohammed Shuaib, the plaintiff  averred that sometime in October, 2008, Ibikunle Taiwo and Kingsley O. Echebiri met the Chairman of Koguna  Babura Insurance Company, Dr. Muhammed Hassan Koguna, and informed him that they had in January, 2008  unilaterally sourced for and obtained N600 million loan from Kakawa Discount House Limited, without giving  him a statement of account or any board resolution. Consequently, Dr. Koguna issued a query to them.

In response, Kingsley Echebiri was alleged to have made some allegations in attempt to give excuses for their  action. Deeply concerned with the development, the company appointed a firm of stockbrokers to investigate  the matter, but Kakawa Discount House refused to cooperate with the company.

In the report submitted by the APT Securities and Funds Limited which investigated the matter, the company  discovered that the two officers of the company had given to Kakawa Discount House, a purported resolution of  the insurance company fraudulently and falsely claimed the company has authorised that a N500 million share  backed facility be obtained from Kakawa Discount House.

The two officers accepted and managed the facility on behalf of the insurance company.

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The plaintiff alleged further that Ibikunle Taiwo and Kingsley Echebiri gave to Kakawa Discount House as  security for the loan, 77,856,059 shares of Red Star Express Plc, 45 million shares of Continental  Reinsurance Plc worth about N1 billion owned by the plaintiff.

The plaintiff company averred that its two officers were never authorised to enter into any transactions with  Kakawa Discount House since they have no power or authority to enter into such transaction. The N600 million  loan never passed through the account of the company and the purported sums of money were never reflected in  its account books.

Consequently, the two officers deliberately withheld all information concerning the transaction until after  about 10 months. The plaintiff contended that the action of the defendants was done in bad faith and  maliciously calculated to hurt the company and therefore, the purported granting of facility of N600 million  to the company is voidable on account of the forgery and falsification of documents.

In view of the above scenario, the plaintiff is urging the court to declare that the purported contracts of  obtaining N600 million facilities from Kakawa Discount House on behalf of Koguna Bubara Insurance Company is  null, void and unenforceable against the plaintiff as the said contracts were ultra vires the power and  authority of the two officers of the insurance company to the knowledge of Kakawa Discount House.

An order of the court nullifying the purported resolution of the company’s Board of Directors made by the two  officers of the company to obtain the loan of no effect whatsoever on account of fraud, having being made  without the consent, knowledge or authority of the company.

The defendants have not filed any defence.

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