By Our Reporter
A federal high court sitting in Lagos has adjourned for further hearing in a N6,441,369,617.73 suit filed against Zenith Bank Plc by Olusola Anthony Adejugbe, a Lagos businessman, and his company Tonique Oil Services Limited over alleged excess and illegal changes.
In an amended statement of claim and a statement on oath sworn to by Adejugbe and filed before the court by Lanre Ogunlesi, a senior advocate of Nigeria, SAN, the businessman averred that his company Tonique Oil Services Limited obtained several credit facilities from Zenith Bank PLC. He pledged three of his properties as securities for the loan facilities.
The plaintiffs averred that three different transactions leadings to this litigation occurred in the company’s current account whereby excess interest and charges were discovered. The company demanded for a reversal but the bank refused.
Subsequently, a forensic accounting firm was commissioned to scrutinize and analyse the Company’s account. It was then discovered that between August 2006 and December 2013, excess interest and charges on the Company’s account by Zenith Bank Plc amounted to N1,842,471,801.99.
By a letter dated February 19, 2008 the bank granted Tonique Oil Services commercial paper facility of N2,568,644,276.09 to finance the purchase of 30,000MT of petroleum products, but N2,501,270,000 was credited into the account of the Company.
However, it was alleged further that instead of Zenith Bank financing the purchase of 30,000MT of petroleum products for the company as per letter of offer, the bank diverted entire sum of N2,501,270,000 for the purchase of its own shares during the bank’s initial public offer, a conduct that is unethical, unprofessional and reprehensive.
Also, out of the sum of N104,363,212.03 assessed as dividends payable on the bank’s shares only N42,173,498.43 was credited into the company’s account leaving outstanding balance of N62,169,713.60.
The bank’s shares purportedly bought by Tonique Oil with the facilities granted by Zenith Bank were managed by the bank such that the bank eventually liquidated the shares after the value had nose-dived and depreciated.
Another controversial transaction on Tonique Oil’s current account was the sale and purchase of a property in Port Harcourt that belonged to one of the shareholders/customers of the bank who needed to clean up some of his obligations to the bank. The bank reportedly introduced Tonique Oil to the shareholder’s 50,000 square meters of land out of which the company bought 20,000 square meters for the purpose of expanding its business earnings.
To facilitate the purchase, Zenith Bank offered the company a term loan of N500,000,000. Part of understanding between the company and the bank was that after the purchase of the land, the bank will finance the company’s Tank farms to be built thereon.
After the purchase, the bank took possession of the title documents of the land as collateral but reneged on financing construction of the tank farm. Since 2008 the land had been under the management of the bank and the same had been lying fallow.
The plaintiffs contended that Tonique Oil Services Limited is not indebted to the bank and any alleged indebtedness could only have arisen as a result of the unconscionable and illegal acts of the bank’s officials in debiting the company’s account with spurious interest charges. They therefore said that such interest charges are illegal because they contravened the Central Bank of Nigeria Monetary Credit and Foreign Exchange/Trade guidelines.
The plaintiffs’ financial consultant computed other charges that were passed into the company’s account based on relevant policy circulars, guide to bank charges of Central Bank of Nigeria and discovered that Zenith Bank overcharged the company on interest on overdraft, COT, and VAT on COT, management fees, upcountry transfer fees, interest on commercial papers, foreign exchange purchases and letter of credits.
The plaintiffs therefore contend that they are not indebted to the bank but that rather it has overcharged the plaintiffs to the tune of several billions of Naira.
The plaintiffs prayed the court to declare that Zenith Bank being under CBN control cannot charge interest on any facilities granted to them beyond the official approved policy rates of the apex financial institution.
Also, they urged the court not only to restrain the bank from selling their property pledged as securities for the loan but to also compel Zenith Bank to pay Tonique Oil Services Limited the sum of ₦6,441,369,617.73 being the total excess charges debited into the company’s account and interest on the same amount at the rate of 21% per annum from the date of judgment of the court until final liquidation.
But Zenith Bank in statement of defence and statement on oath deposed to by Vincent Ohanugo, senior assistant manager, Internal Control and Audit Department, denied almost all the company’s claims. It stated that the company was granted the following loans: ₦2.5billion regular commercial paper, $36million import finance facility, $6,648,000 commercial paper/usance facility; $9million import finance facility; usance facility, $11million and short term import facility of ₦500 million.
The bank averred that the plaintiffs authorised Zenith Registrar Plc to take steps to purchase the shares of the bank on their behalf and the plaintiffs pledged 3.5 million and 17,154,300 units of the shares respectively in favour of the bank and authorised it to sell them to recoup part of the credit facilities the bank granted them. Therefore the allegation of unethical conduct, lack of competence and professionalism against it by the plaintiffs was made out of malice, confusion and frustration on the part of the plaintiffs.
The bank averred further that there was no understanding between it and the company that the former should finance the construction of tank farm for the company. Zenith contended that the plaintiffs’ assertion that they are no longer indebted to the bank is a bare denial. It challenged the plaintiffs to provide evidence of payment of all the credit facilities availed to them by the bank.
Zenith stated that the plaintiffs suit did not disclose any cause of actions against the bank as they are still indebted to the bank in the sum of N8,464,176,356.52 as at 31st of January 2013. It therefore urged the court to dismiss the suit as being frivolous, vexatious, as it amounts to abuse of the process of the Court.