AMCON
OpenLife Nigeria has reliably gathered that Asset management Corporation of Nigeria AMCON has renewed its legal battle against Mobil workers (EKET) Multipurpose co-operative,in order to recover a debt of N14,733,502,334.06.
The plaintiff, AMCON is a body established by an Act of the National Assembly of Nigeria to assist eligible financial institutions to efficiently acquire or dispose of eligible bank assets in accordance with the provisions of the Act, amongst others.
Mobil workers (EKET) Multipurpose co-operative society Limited, is a Multipurpose Cooperative Society registered under the Laws of the Federal Republic of Nigeria and Cross-River State of Nigeria.
According to amended statement of claim granted pursuant to order of the court dated 4th of December,2023 and filed before the court by a Lagos Attorney on behalf of AMCON before a Federal high court in Lagos, the Plaintiff avers that in 2012, it acquired and took over the non-performing loan of the Defendant with United Bank of Africa Plc., the “Bank”, pursuant to its powers under the Asset management Corporation of Nigeria Act 2019.
AMCON avers that prior to acquiring the Defendant’s loan, the Bank granted upon request a #7, 000,000,000,00 (Seven Billion Naira) Term Loan facilities to the Defendant to finance the personal need of their members.
The security for the facilities was:
Irrevocable domiciliation of all the Defendant’s members’ monthly contributions and deduction by Mobil Producing Nigeria Unlimited-the parent company of the Defendant, to be paid to the Bank.
The Defendant duly accepted the facilities by its board resolutions held on the 15th September, 2007 and 11th March, 2008.
One of the terms in the accepted offer letter was that the Defendant would forward to the “Bank” a letter to its parent Company-Mobil Producing Nigeria Unlimited,instructing it to irrevocably domicile monthly contributions/deductions of the Defendant with the “Bank” until the entire sum advanced is completely paid off.
Pursuant to this agreement above,the Defendant duly instructed the Pay master of the parent Company-Mobil Producing Nigeria Unlimited to pay directly to the “Bank” all deductions/contributions of its members which said letter was duly acknowledged by the parent company -Mobil -Producing Nigeria Unlimited.
The Parent Company failed to carry out the instruction by domiciling the deductions/contributions of members of the Defendant as conveyed in the letter dated the 14th December, 2007 and 11th March, 2008 as agreed between the parties leading to the Defendant’s multiple defaults in its monthly interest and half-yearly principal repayment of the facility disbursed.
The Plaintiff avers it has cause to believe that the Defendant’s company failed to make the necessary payments because the Defendant’s surreptitiously withdrew the said instruction which explains why the anticipated payments ceased.
The tenor of the facility was for five years,while the defendant was to make half-yearly repayment on the principal and interest serviced monthly.
The defendant by its letter dated 15th September,2007 and 10th March, 2008 authorized the ‘Bank’ to exercise a right of Lien over its money held in another account with the bank in the event of default.
The Plaintiff avers that it was a term of the facility among other terms that the “Bank” reserves the right to call in the facility if the Defendant fails to settle as and when due any outstanding amount owed to the Bank.
It was also a term of the facility that the repayment of the availed sum shall be monthly deductions from the Defendant’s members’ salaries and inflow from investments of the Defendant to be paid directly to the Bank.
The Defendant bought properties and shares of various Companies with the funds availed it by the Bank and kept same with various stock broking Companies.
However,AMCON discovered that the Defendant purchased various stock broking companies.It discovered that the defendant purchased various shares to wit: FCMB, UAPLC, Access Bank, AFRINSURE, First Bank of Nigeria Holding Company, Etisalat, and many others.
The Bank was constrained to write several correspondences to the Defendant on the need to adequately fund its account and the consequences thereof which could make the entire facility liable to be recalled.
When it became obvious to the Bank that the Defendant was determined to deliberately breach vital terms of the facility, the Bank in line with the offer letter called-in the entire facility by its letter dated the 17th September 2009.
Despite several demands made by the bank on the defendant,the defendant refused and or otherwise neglected to fulfill its obligation to the bank.
Instead of paying down on the entire facility as demanded the Defendant wrote the Plaintiff via its letter dated the 13th October, 2009 requesting that the facility be restructured.
The Bank via its letter dated 19th October, 2009 rejected the application of the Defendant for a restructuring of the facility and demanded for the immediate repayment of the facility.
The Plaintiff avers that the Central Bank rate at the relevant period was 22.5%inclusive of additional to other penal charges for default on repayment a rate which is public knowledge and of which the Defendant had knowledge and or was deemed to know.
By banking custom and practice, the Bank is entitled to continue to charge interest on the sums owed by the Defendant until same is fully repaid. I am aware that the parties to the transaction already agreed on the application rate to be charged on the facility.
The Defendant also operates as a thrift and credit Society interest and other fees like the Plaintiff.
Whereof,the Plaintiff claims against the Defendant as follows:
Judgment against the Defendant in the sum of #14, 733, 502, 334.06(Fourteen Billion, Seven Hundred and Thirty-Three Million, Five Hundred and Two Thousand, Three Hundred and Thirty-Four Naira and Six Kobo)being outstanding sum owed by the Defendant to the Plaintiff as of 4th April, 2022.
Interest at the rate of 14%Per annum from the 4th of April, 2022 until Judgment is delivered in this case.
Interest at the rate of 25% per annum from the date of Judgment is delivered till the final liquidation of the entire judgment debt.
General Damages in the sum of N500, 000,000.00 (Five Hundred Million Naira) Cost of this action.
The case has been adjourned till February 19,2024 for hearing.
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