AMCON Sues Eco Bank, Zenith Others Over Bauchi’s N1.5bn Debt
Justice Chukwujekwu Aneke of the Federal High Court, in Lagos, will on November 3, 2021, decide whether or not to vacate a freezing order placed in about 20 bank accounts belonging to the Bauchi State government in a suit filed by Asset Management Corporation of Nigeria (AMCON) over alleged N1.5 billion debt.
Justice Aneke fixed the matter for ruling after listening to submissions of counsel to AMCON, Mr. Olugbuyiro Akinola and that of Bauchi State, Mr. Sylvester Elema (SAN).
AMCON had in suits numbers, FHC/L/AMC/64/2021, FHC/L/AMC/66/2021, and FHC/L/AMC/67/2021 alleged that Bauchi State government borrowed the money from the defunct Equatorial Trust Bank (now Sterling Bank Plc).
Listed as defendants in the suits are the Attorney-General of Bauchi State, Bauchi State government, the Accountant-General, Bauchi State, the Chief Administrative Officer of Hospital Management Board, Bauchi state, the Chief Accountant Hospital Management Board Branch, Bauchi State, and the Amalgamated Union of Pubic Corporation, Civil Service, Technical & Recreational Services Employees (AUPCTRE) Employees (AUPCRE) Hospital Management Board, Bauchi State.
AMCON had prayed the court to freeze the State’s bank accounts with Central Bank of Nigeria and 20 other banks.
Some of the banks affected by the freezing order are; Citi Bank Nigeria limited, Eco Bank Plc, Fidelity Bank Plc, First Bank of Nigeria Plc, First City Monument Bank, Heritage Bank Plc, Polaris bank Plc, Providus Bank, and Keystone bank Plc.
Others are, Standard IBTC Bank, Standard Chartered Bank Limited, Sterling Bank Plc, Suntrust Bank, Union Bank of Nigeria, Unity Bank Plc, Wema Bank Plc, and Zenith bank Plc and others.
AMCON had on August 30, 2021, through an Exparte application dated July 19, 2021, obtained a freezing order against the Bauchi State government which was made by Justice Tijjani Ringim.
After granting the order, Justice Ringim had ordered all the above mentioned banks to stop all the respondents either directly or indirectly from transferring, withdrawing, or dealing with or disposing of any of the monies standing to the credit of the respondents in the Central Bank of Nigeria to the total outstanding debt of N271,489, 820.75.
Justice Ringim had also directed the Central Securities Clearing Systems Plc (CSCS) to provide information and details of the respondents’ companies and interests, including stocks, shares securities, and dividends to AMCON or its counsel.
The court further made an order compelling the above banks to disclose and produce bank details, statements of accounts, bank balances, and monies standing to the credit of the respondents.
AMCON had through his lawyer; Olugbuyiro Akinola stated that the Amalgamated Union of Public Technical & Recreational Services Employees, Hospital Management Board, Bauchi State obtained loan facilities in eight batches from Equatorial Trust Bank limited (Now Sterling Bank Plc.)
He averred that eight loan facilities were offered to the defendants on February 3, 2009, in the sum of N15,000,000.00 each making a total of 120,000,000.00 at the contractual rate of 22 per cent each per annum for 16 months for the purpose of acquiring assets in favour of the members of the 6 defendant in Bauchi State
He argued that in accordance with the conditions precedent for drawdown as contained in the Offer letters the 4th and 5th defendants executed a corporate guarantee in favour of Equatorial Trust Bank limited (now Sterling Bank Plc.) stating that the total loan sum, as well as the accrued interest, would be repaid as at when due.
He added that the defendants ‘are indebted to the AMCON in the sum of N293,997,934.16 million as of 30th of June 2021, plus accrued interest at 17percent being the principal sum and accrued interests.
In one of the suits, AMCON is also claiming N346, 611,547.34 million being the sum owed by the state government, which arose from the credit facility extended to Bauchi state by Equatorial Trust Bank (now Sterling Bank Plc) which the State government allegedly failed or refused to liquidate.
AMCON is also demanding for the sum of N100 million as general damages for breach of contract and for the cost of filing the suit.
But, Bauchi State government in an application to vacate the freezing order challenged the jurisdiction of the court arguing that the amount of money stated in the said order as the outstanding debt was false and manifestly inflated.
The state through its lawyer, Sylvester Elema (SAN) stated that both parties in the suit met on August 24, 2021, and resolved the subject matter of the suit, a fact that was allegedly hidden from the court as at the date the orders were made.
‘’It, therefore, follows that the said orders made by this court on 30th August 2021 are not valid in law since the said orders are not supported by the provisions of Section 49, 50 and 50A of the AMCON Act 2010’’, he argued.
Elema urged the court to vacate the order arguing that the entire foundation of any suit is the important element of jurisdiction.