…Alleges excessive charges and mismanagement of account
Osigwe Food and Agro Industrial Company Limited has slammed an N8.3billion suit against Unity Bank Plc through amended statement of claim ordered by a Federal High Court in Lagos. It was a renewal of the company’s legal battle against the financial institution.
In the amended statement of claim filed before the court by a Lagos lawyer, Chief Paul Omoijiade, Osigwe Food and Agro industrial Company with registered office at 196 Iju Road, Agege, Lagos, commenced operation in 2008 with ultra modern factory for the production of instant Noodles under the brand name of UNO Instant Noodle. It maintained current account with Unity Bank Plc.
The company alleged that the bank booked the following facilities against the company in the course of their banking relationship:
- Term loan of N328 million on 12th February,2009
- Term loan of N1Billion on 27th July, 2010.
- Existing Term Loan from N478 million to N1Billion on 16th August 2010.
The company averred further that the decline in her production and sales in 2009 adversely affected her working capital which constrained their capacity to meet up with the obligation of the bank and other creditors.
In order to shore up her working capital, the company in 2010 applied for N2.6 Billion Central bank of Nigeria intervention fund at 7% interest repayable in 15years to restructure and refinance her facilities with the bank, Union Bank and Eco Bank.
The N1billion was an intervention fund by the CBN and Bank of Industry to pay off previous indebtedness to Unity Bank, while the balance should be restructured for 15 years at 7% to enable the company to produce and create employment. While Unity Bank disbursed N686 million out of the sum of N1billion approved by CBN/BOI, it reversed the disbursement without notice or justification thereby contributing to the financial challenges of the company.
While the bank disbursed N686 million out of N1billion approved and without notice and justification reversed the CBN/BOI Intervention loan and sold the debt to Assets Management Corporation of Nigeria (AMCON).
The company wrote the bank on September 19, 2013 on the wrong amount on her account and the premature sale to AMCON. AMCON in a letter to the company stated that the facilities sold to it was N721,400,000. Osigwe disputed the above debt sold to AMCON and consequently in 2015 contracted an Audit firm to review and reconcile the accounts.
The review of the accounts revealed the following:
1. Excess interest charges of N14,714,834
2. Excess processing management, restructuring and commitment fees N11,549,333
The total was N26,264,168.
Meetings were held between the plaintiff, the bank, AMCON and the Auditors in respect of the excess charges and sale of the over bloated Account to AMCON which conclusively had no impact in rectifying the mishap neither did the bank produce the statement of Accounts as requested.
Consequently the company referred the matter to Central Bank of Nigeria Consumer Protection Department
On August 15, 2017, Unity Bank wrote a letter to the CBN that she credited the company’s account on April 22, 2015 with the sum of N4,490,666.67 and that it reviewed the company’s letter of complaint and that it was not entitled to further refund from Unity Bank.
The company averred further that despite several and strenuous demands for its statement of Account from Unity Bank, the bank failed and refused to make the statement available to her and unilaterally debited its account without mandate with unauthorised entries
It said it will contend at the trial of this suit that the action of the bank is liable under the Central Bank of Nigeria Monetary, Credit, Foreign Trade and Exchange Guidelines to refund the excess and spurious debits plus interest at the bank’s manufacturing sector maximum lending rate of 32 % from the date of the excess charges till liquidation.
Consequently, the plaintiff claimed reliefs from Unity Bank Plc as follows:
- An order of the court that the bank pay to the company the sum of N3,317,797,,501.00 being and representing special damages for the bank’s breach of contract.
- The order of the court that the sum of N5billion be paid as damages for breach of duty of care by the bank to the company.
- An order of the court compelling the bank to write letter of apology to the company for mismanaging its account in line with Monetary Policy of Central Bank till liquidation.
- An order of the court for 10% interest per anum on the judgment sum from the date of judgment debt is paid.