Firm Drags Nova Bank To Court Over Imposition Of Non-Existent Liabilities In millions Of Dollars
OpenLife Nigeria reports that a Plastic manufacturing company, Sunrise Products Limited, has dragged Nova Commercial Bank Limited before a Federal High Court in Lagos alleging that the bank has inflated its indebtedness,by imposing illegal charges, and attempting to enforce non-existent liabilities running into millions of dollars and hundreds of millions of naira on it.
Joined as co-defendant in the ensuing legal battle is a limited liability company EMERGING AFRICA TRUSTEES LIMITED.
The plaintiff company is claiming the sum of N 10 million as damages as well as N 5 million as legal cost from the bank.
In a detailed statement of claim filed before the court, by a Lagos Attorney Barrister Sivbone Edu on behalf of the company,the plastics manufacturing firm alleged that Nova Commercial Bank manipulated its accounts and issued contradictory debt figures in a calculated attempt to wrongfully extract funds from the company.
The dispute centres on an Import Finance Facility granted to Sunrise Products in February 2020, valued at $1.5 million, to support the importation of industrial raw materials such as polyethylene, polypropylene, and other related inputs essential for its manufacturing operations.
According to the plaintiff, it fully complied with the terms of the facility by consistently providing the required naira cash cover for all Form M transactions and Letters of Credit issued by the bank.
The company maintained that all obligations under the facility were discharged as and when due through its account with the Bank.
However, the firm alleged that despite meeting its obligations, Nova Commercial Bank began making “spurious and ever-changing claims” of indebtedness, which it said were unsupported by the actual transaction records.
Sunrise Products stated that its account with the bank reflected a total debit turnover of over N4.48 billion and a credit turnover of approximately N4.49 billion, leaving a positive balance of about N14 million as of May 2022, figures it said clearly contradict any claim of outstanding debt.
The company further alleged that Nova Commercial Bank’s claims of indebtedness fluctuated wildly over time, raising serious concerns about the credibility of its records. In April 2022, the bank allegedly claimed an outstanding sum of $1.89 million.
By November of the same year, the figure was revised to $420,213.78, and later reduced to $225,781 in January 2023.
Despite these reductions, the bank allegedly escalated its claims again, asserting in August 2023 that the company owed over $2 million alongside additional naira liabilities.
By March 2024, the Bank reportedly demanded $2.16 million, threatening to debit the company’s accounts or convert naira funds at prevailing exchange rates to settle the alleged debt.
Describing the development as “a pattern of inconsistency and financial misrepresentation,” the plaintiff insisted that the shifting figures demonstrate that the alleged debt is fabricated.
To verify its position, Sunrise Products engaged a financial consultancy firm, Bizancom Support Services, to conduct a forensic review of its transactions with the bank.
The review reportedly uncovered discrepancies in the bank’s account entries, including unexplained debits and charges not backed by documentation.
The plaintiff further claimed that repeated requests for clarification and supporting documents were ignored by Nova Commercial Bank.
The matter was subsequently escalated to the Sub-Committee on Ethics and Professionalism of the Bankers’ Committee, where the plaintiff formally petitioned against what it described as illegal and excessive charges.
In a significant development, the committee reportedly found merit in the company’s complaints and concluded that Nova Bank had indeed imposed excess and unlawful charges on the account.
The findings, according to the plaintiff, confirmed that the bank’s conduct contributed to the disputed figures.
Despite this, Sunrise Products alleged that Nova Bank continued to pursue enforcement actions, including attempts to rely on a debenture agreement to assert control over the company’s assets.
The Plaintiff seeks reliefs from the Court owing to the opaque nature of accounting without Accounts known to the Plaintiff and where outrageous interest are calculated and charged, the application of unknown, unreasonable exchange rates which the bank and Plaintiff never at any time agreed to in the management of its account or on the Import Finance Facility and its operation and threatens to put the Plaintiff in a very negative position if allowed to stand.
Notwithstanding this state of affairs bordering on the unclear accounting position of the bank, it has threatened to enforce rights under the All assets Trust Debenture without satisfactorily establishing any debt position of the company and the company seeks recondite questions from the Court and Relief.
The plaintiff is now seeking the order of the court.
Additionally, the plaintiff is urging the court to restrain the defendants and thier agents from enforcing the default provisions in clause 11 of all debenture trust deed between the company and EAC Trustees Limited made in May 2020.
Sunrise Products is also seeking N10 million in damages against Nova Commercial Bank as well as N5 million in legal costs
About Author
