Court Freezes Bank Accounts Of Swift Networks Over N7 Billion Debt

Court Freezes Bank Accounts Of Swift Networks

OpenLife Nigeria reports that based on an application for debt recovery of N7,037,410,548,23 filed on behalf of Union bank Nigeria Plc against a limited liability company Swift Networks Limited by a Lagos Attorney, Barrister Temilolu Adamolekun,a Federal high court judge sitting in Lagos, Justice Daniel Osiagor has granted injunction restraining the company, its agents, privies and/or assigns or otherwise howsoever from dealing with any of the monies standing to its credit in all of its accounts, records or howsoever held with the 24 banks listed before the court, and also its monies standing to its credit in custody of the Union Bank up to the tune of N7,037,410,548.23 (Seven Billion Thirty Seven Million Four Hundred and Ten Thousand Five Hundred and Forty-Eight Naira Twenty-Three Kobo) or its equivalence in any foreign currency pending the hearing and determination of the substantive suit.
An Interim order was also granted restraining the 24 banks listed before the court, their agents, privies, assigns or anyone whatsoever from releasing to the Defendant or any of its Affiliate, any monies, funds or any other instrument belonging to the company to the tune of N7,037,410,548.23 (Seven Billion Thirty-Seven Million Four Hundred and Ten Thousand Five Hundred and Forty Eight Naira Twenty-Three Kobo) or its equivalence in any foreign currency that may be or found in the custody of the banks.

The order of the court was sequel to an affidavit sworn to by the litigation manager from the law firm of Temilolu Adamolekun & Co,Mr Segun Omoshola and filed and argued before the court, by Barrister Temilolu Adamolekun
Swift Networks Limited is a Private Limited Liability Company incorporated under the provisions of the Companies and Allied Matters Act and carries on the business of providing facilities-based telecommunications services, with its office address at No.31, Saka Tinubu Street, Victoria Island, Lagos.

In the course of the bank/customer relationship, Union bank agreed to grant various credit facilities to the company for several purposes
However the company failed to meet its repayment obligation(s) to Union Bank ; however, by its letter of 9th November, 2017, the company requested that its debt be restructured by the bank.

The company granted the Defendant’s application for a restructure and further availed it with other credit facilities.

In the same manner as previous times, the company failed to meet its repayment obligations arising from the offer letter of 29th December, 2017.
In a bid to manage the situation, the company requested that the outstanding indebtedness be restructured to enable it meet its repayment obligation which the Plaintiff acceded to.
The bank further restructured the company’s indebtedness to it by its offer letter of 28th September, 2020.
Under the offer letter of 28th September, 2020, the bank availed the company with a term loan facility to the tune of N7, 674,292,000.00 (Seven Billion Six Hundred and Seventy Four Million Two Hundred and Ninety-Two Thousand).
Apart from executing the offer letters above, the company passed different Board Resolutions accepting the facility.

The facilities were drawn down and availed to the company, and as security for the facilities granted to the company,
it charged its Assets by way of a Trust arrangement in favour of UTL Trust Management Services Limited (UTL); an arrangement where the Plaintiff, although a beneficiary, but, shares the interest in the security with another lender i.e. First City Monument Bank Plc.

In line with the offer letter of 28th September, 2020, parties agreed that the source of repayment for the facilities shall be through cash flows from the operations of the Company and other sources of cash flow available to the company and acceptable by the bank.
Consequently, after the disbursement of funds to the company and after the facilities matured, the Defendant failed to perform its repayment obligation to the bank.
The Plaintiff approached the Defendant to resolve the failure of the latter in performing its repayment obligations. It was then the Defendant undertook that it was going to repay the facilities availed to it.

Despite the undertakings and assurances given by the company to the bank, it failed to perform its obligations therefore allowing further deterioration on the facilities.
The Swift Networks Company has failed/neglected to perform its obligations to Union bank and has failed to liquidate the various facilities and as 30th day of June, 2023, its indebtedness to the Union bank stood at N7,037,410,548.23 (Seven Billion Thirty-Seven Million Four Hundred and Ten Thousand Five Hundred And Forty-Eight Naira Twenty-Three Kobo) while interest continues to accrue in line with the terms and conditions as contained in the Offer letters.

Owing to the company’s insipid acts, the bank caused its Solicitors to issue a demand notice to the Company Despite the service of the demand letter of 4th July, 2023 on the company, it continued to ignore its obligations to the Plaintiff.

The company did not even deem it fit to respond to the letter and continues to ignore and abandon its obligations to the bank. Meanwhile, the funds given to the company are funds belonging to third party stakeholders.
The bank is now under serious scrutiny because of its exposure to the company which continues to get worse as interest continues to accrue at the bank’s lending rate.

Meanwhile, the funds given to the company as facilities are Depositors and shareholders’ funds.

Regrettably, rather than performing its obligation under the various offer letters and agreement, upon the receipt of the bank’s Demand Letter; the Defendant began disposing its Assets to several persons. Assets which are already charged in favour of UTL Trust Management Services Limited; an arrangement where the bank, although a beneficiary, but, shares the interest in the security with another lender.

The company was also availed several facilities by First City Monument Bank Plc. (FCMB) which culminated into the trust arrangement with UTL. The arrangement did not ensure the company’s compliance with the credit facilities transaction with the Plaintiff.

The refusal of the company to comply with the Terms of the Offer letters and Agreement has adversely affected the bank’s business who is a custodian of third parties/stakeholders funds.
It is important that depositors and Shareholders’ funds are returned to the Plaintiff.

The company continues to divert to other financial institutions, all the funds that ordinarily were supposed to be repaid to the bank and from those institutions dissipating the funds and taking them outside Nigeria

That the res of this action is in real and complete danger by being completely dissipated any moment by the company, and unless restrained by this Court, the bank will definitely be left in the lurch.

The company’s failure to meet its obligation to the Plaintiff and further steps taken by it to sell off and dissipate its assets is a clear indication that the company only took the facilities from the bank without the intention of any repayment.

The company has no defence whatsoever to this action, as it has deliberately chosen not to comply with the Terms of the Offer letters and agreement.

The company is heavily indebted to several entities and it appears that the only unencumbered assets in its name are the funds standing in their credit in the custody of the listed banks

Unless the Defendant is restrained, it would place the funds in its custody beyond the reach of this Court as its acts are already threatening to deal with the said funds and assets.

The bank hereby undertakes to indemnify the company in the unlikely event that this application ought not to have been granted in the first instance

The balance of convenience as it relates to this application is in favour of the bank who would suffer unduly if the orders being sought herein are not granted.
The presiding Judge,Justice Daniel Osiagor,after hearing Temilolu-Adamolekun for the Plaintiff/Applicant with
Mary Jane Eluemunor move in terms of the motion paper,ordered as follows,That an interim order of Mareva Injunction is granted restraining the Defendant, its agents, privies and/or assigns or otherwise howsoever from dealing with any of the monies standing to its credit in all of its accounts, records or howsoever held with the 2nd to 25th Respondents the listed banks and also its monies standing to its credit in custody of Union bank up to the tune of N7,037,410,548.23 (Seven Billion Thirty Seven Million Four Hundred and Ten
Thousand Five Hundred and Forty-Eight Naira Twenty-Three Kobo) or its equivalence in any foreign currency pending the hearing and determination of the motion on notice.
Thereafter,the case was adjourned to the 27th of September, 2023 for hearing of the Motion on Notice.