AMCON Debt: Court Freezes Accounts Of Sprawling Nigeria Limited

*Jude Nwauzor, Head, Corporate Communications, AMCON
LATEST: In what has appeared like testing the amended Asset Management Corporation of Nigeria (AMCON) Act, which was late last year signed into law by President Muhammadu Buhari, a Federal High Court sitting in Lagos, has ordered the freezing of all bank accounts belonging to a limited liability company, Sprawling Nigeria Limited and its two directors, pending the hearing and determination of debt recovery suit brought against them by AMCON. We inquired from Jude Nwauzor, the head of Communications at AMCON if the accounts have been frozen as ordered by the court, he promised to get back to us but never did till press time.

The company’s two directors who were brought before the court in a suit marked FHC/L/CS/1952/2019, include: Mr. Lukman Olawale Ogunyemi and Yetunde Atilade. Justice (Prof.) Chuka Austine Obiozor, made the freezing order, while granting an exparte application filed and argued by the lawyer, Mr. Olaitan Adeboye.

Apart from freezing the company and its directors’ accounts, Justice Obiozor also made an order of interim injunction directing all banks in Nigeria to furnish the court, AMCON and its counsel the respondents’ statement of accounts, stating the total sum standing credit in the accounts. The judge also ordered AMCON on the interim to take possession of all the defendants’ assets, movable and immovable anywhere it is located in Nigeria, pending the hearing and determination of the substantive suit.

The court also ordered the respondents to depose to affidavits declaring all their assets in Nigeria under the oath and file same at the Court’s registry. While also ordered the Inspector-General of Police (IGP), Lagos State Commissioner of Police, the Bailiffs and Court’s Deputy Sheriff, to enforce the order made pursuant to Section 287(3) of Nigeria 1999 Constitution and bring to court anyone that disturbs the execution of the order.

Justice Obiozor also directed AMCON to serve the suit’s originating motion on all the respondents and adjourned the hearing of the substantive suit till February 5. AMCON, through its lawyer had alleged that Sprawling Nigeria Limited and its two directors are indebted to it in the sum of N243, 955, 686.01 million, and all efforts made to recover the debt had proved abortive.

AMCON in an affidavit, which it deposed to by one of its Credit Officer, David Funsho George, stated that the first defendant/respondent was a customer to the defunct Oceanic Bank Plc, while second defendant is the managing director of the first defendant and also a personal guarantor of the credit facilities obtained by the company from the defunct Oceanic Bank Plc, while the third defendant is a director in the company.

He told the Court that the first defendant was a customer of the defunct Oceanic Bank Plc. Adding that through a Board Resolution dated August 14, 2005, it was resolved that the first defendant should open an account with the defunct Oceanic Bank Plc. And that by a letter dated March 22, 2007 addressed to the said defunct Oceanic Bank Plc applied for a Term Loan facility sum of N44 million, to enable it to execute the Shell contract it claimed was award d to it.

The deponent states further that through a letter dated April 30, 2007, the defunct Oceanic Bank Plc, approved and granted the credit facility of the sum of N44 million to the first defendant, for the purpose of financing the purchase of eight(8) 30-tons double Axel trucks for onward supply to Shell Petroleum Development Company with its attendance conditions, which conditions were accepted by the first defendant.

And that upon the approval and release of the funds to the first defendant, it has refused and neglected to liquidate both the principal and interest of the facilities it obtained from the original tender at the maturity dates thereof and this prompted the defunct Oceanic Bank to write a Demand Letter which as at September 9, 2009 stood at a sum of N63,817,032, 54 million.

The deponent averred that despite the foregoing, the first Defendant continued to and neglect to liquidate its indebtedness to the defunct Oceanic Bank and this prompted the sale of the unliquidated indebtedness to the AMCON by the bank through a Loan Purchase Agreement effective from December 31, 2010 which development was referred to the first defendant through a Notice of Assignment.

The deponent stated that it’s the inability to make recovery despite the above led to the engagement of the consortium of Olaitan Adeboye & Co as Asset Management Partners.
And that he was informed by the consortium of Olaitan Adeboye & Co and verily believe also that in its effort at recovery, it wrote a Letter of Demand dated August 19, 2018, to the Defendant for payment of a sum of N243,955,686.01 million, but could not deliver same because the first defendant and its Directors were said to relocated to an unknown place.

The deponent stated further that the inability of the AMCON to recover the unliquidated indebtedness of the first Defendant through the various efforts made had prompted it to approach this court for the recovery of the said indebted sum that stood at a sum of N248, 077, 366.01 million, as at September 30, 2019. The deponent averred that AMCON had undertaken to indemnify the defendants if the order is granted in error and occasions any loss and or injury to the defendants.

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