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Court Sets October Date in Suit against Zenith Bank over Alleged N6.4Bn Illegal Charges

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Justice Ayokunle Faji of the Federal High Court, Lagos, has fixed October 6, for adoption of final written addresses in a suit filed by Mr. Olushola Anthony Adejuyigbe, a Nigerian independent oil marketer, against Zenith Bank Plc.

Court Sets October Date in Suit against Zenith Bank over Alleged N6.4Bn Illegal Charges

Adejuyigbe alongside his company, Tonique Oil Services Limited, sometimes in 2018, dragged Zenith Bank Plc before the court over alleged illegal and excessive charges to the tune of N6,441,369,617.73.

Adejuyigbe and his company in the suit marked FHC/L/CS/1584/2012, through Mr. Lanre Ogunlesi (SAN), his lawyer, in his amended statement of claim filed before the court narrated that in the course of its business activities his company, Tonique Oil Services Limited obtained several credit facilities from Zenith Bank PLC while he pledged three of his properties as securities for the loan facilities.

Adejugbe also stated that three different transactions leadings to this litigation occurred in his company’s current account whereby excess and illegal interest and charges were discovered.

And that upon discovery of the said charges, the company demanded for a reversal but the bank bluntly refused.

He also stated that a forensic accounting firm was engaged to scrutinize and analyse his company’s account and it was then discovered that between August 2006 and December 2013, excess interest and charges on the company by Zenith Bank Plc as accumulated to the tune of N1,842,471,801.99.

Adejugbe further stated that by a letter dated February 19, 2008, Zenith Bank granted his Company commercial paper facility of N2,568,644,276.09, to finance the purchase of 30,000MT of Petroleum products, but N2,501,270 was credited into the company’s account.

He however stated that instead of Zenith Bank financing the purchase of the 30,000 MT of Petroleum products for the company as per letter of offer, Zenith Bank diverted the entire sum of N2,501,270 for the purchase of its own shares during the bank’s Initial Public Offer (IPO), a conduct the plaintiffs described as unethical, unprofessional and reprehensive.

He also added that out of the sum of N104,363,212.03 assessed as dividends payable on the bank’s shares only N42,173,498.43 million was credited into the company’s account leaving outstanding balance of N62,169,713.60.

He added that the bank’s shares purportedly bought by his Company with the facilities granted by Zenith bank were managed by the bank so much that the bank eventually liquidated the shares after the value has nose dived and depreciated.

He also stated that another activity on his Company’s current account with Zenith Bank, was the sale and purchase of a property in Port Harcourt, Rivers State, that belong to one of the shareholders/customers of the bank who needed to clean up some of his obligations to the bank.

And that it was the bank who introduce his company to the shareholders 50,000 square meters of land out of which the company bought 20,000 square meters for the purpose of expanding its business earnings.

He averred that to facilitate the purchase of the land, Zenith Bank offered the company a term loan of N500,000 and it was part of understanding of the company and the bank that after the purchase of the land, the bank will finance the company’s Tank farms to be built thereon.

He further stated that after the purchase of the land, Zenith Bank took possession of the title documents of the land as collateral while reneged on the promise and understanding to finance his Company’s tank farm on the land and since 2008 the land had been under the management of the bank and the same had been lying fallow.

In this circumstance, the plaintiffs contended that Tonique Oil Company is not indebted to Zenith Bank and any alleged indebtedness could only have been arisen as a result of the unconciousable and illegal acts of the bank’s officials in debiting the company’s account with astronomical and spurious interest charged.

Consequently, the plaintiffs contended that such interest charges are illegal and they contravened the Central Bank of Nigeria Monetary Credit and Foreign Exchange/Trade guidelines.

The plaintiffs financial consultant computed other charges that were passed into the account of the company, base on relevant policy circulars, guide to bank charges of Central bank of Nigeria and discovered that the bank excessively overcharged the company on interest on overdraft, COT, and VAT on COT, Management Fees, upcountry transfer fees, interest on commercial paper, foreign exchange purchases and letter of credits.

Consequently, the plaintiffs are contending that they are not indebted to the bank rather the bank has overcharged them to several billions of Naira.

Rather the plaintiffs urged the court to declare that Zenith Bank being a bank within the supervisions and control of CBN cannot charge interest on any facilities granted to them beyond the official approved policy rate of the Central Bank of Nigeria.

They are also urged the court not only to restrain Zenith Bank from selling their property pledged as securities for the loan but to also compel it to pay his company the sum of ₦6,441,369,617.73 billion, being the total excess charges debited into the company’s account by the bank and interest on the same amount at the rate of 21% per annum from the date of judgement of the court until final liquidation.

However, Zenith Bank in its statement of defence with statement on oath sworn to by Mr Vincent Ohanugo, senior assistant manager internal control and Audit Department of Zenith Bank, and filed by Mr. Ajibola Lawal-Akapo,  its lawyers, and others, denied almost all the plaintiffs’ claims and stated that the company was granted several loans which include: ₦2.5 billion regular commercial paper; $36 million import finance facility; $6, 648 million commercial paper/usance facility; $9million import finance facility via usance facility and $11million short term import facility of ₦500 million.

The bank also stated that the plaintiffs authorised Zenith Registrar Plc to take steps to purchase the shares of the bank on is their behalf, while also pledged 3.5million and 17,154,300 units of the shares respectively in favour of the bank and authorised the bank to sell them to recoup part of the credit facilities the bank granted them, therefore the allegation of unethical conduct, lack of competence and professionalism against it by the plaintiffs was made out of malice, confusions and frustration on the part of the plaintiffs.

The Bank also stated further that it did not enter any understanding with the plaintiffs to finance the construction of tank farm for the company.

The plaintiffs assertion that they are no longer indebted to the bank is a bare denial and therefore challenges the plaintiffs to provide evidence of payment of all the credit facilities availed to them by the bank.

Zenith Bank also stated that the plaintiffs suit did not disclose any cause of actions against it, as the plaintiffs are still indebted to it in the sum of N8, 464, 176, 356.52 billion, as at January 31, 2013.

The Bank therefore urged the court to dismiss the suit for been frivolous and it amounts to abuse of court process.

Meanwhile, Justice Faji upon conclusion of arguments from both parties counsel, on June 28, 2021, adjourned the matter till October 6, for adoption of final written addresses.


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E-Financial

Lagos State Appoints MoneyMaster as Payment Partner for “Ounje Eko” Programme

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“Ounje Eko”, the food price discount initiative of the Lagos State Government, has appointed leading payment service bank, MoneyMaster Payment Service Bank Limited (MMPSB), as its collaborator in the bid to ensure ease of payments at the market.

MoneyMaster is one of the Central Bank of Nigeria-licensed Payment Service Banks (PSBs) to promote financial inclusion across Nigeria.

Under the partnership, MMPSB will apply its cutting-edge payment solution to engender easy payment and reconciliation in order to make   the experiences of Lagosians who will be getting their food supplies from the markets pleasurable. Its payment solution is also all-encompassing and ensures real time value to payment destinations.

The mobile bank was appointed as the collection and payment partner for “Ounje Eko” Food Markets programme which is a government initiative serving the five divisions of Lagos State. Consequent on this, MoneyMaster Payment Service Bank will collect payments in 57 LCDAs in the state.

The partnership gives credence to the quality of payment solutions that MoneyMaster is reputed for in its services to its growing business clientele in private and public sectors.

 


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E-Financial

CBN, EFCC Probe Banks, Firms over Alleged Forex Racketeering

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Central Bank of Nigeria (CBN), is investigating irregular foreign exchange transactions and forward contracts valued at approximately $2.4 billion.

CBN, EFCC Probe Banks, Firms over Alleged Forex Racketeering

The  inquiry follows an extensive audit by Deloitte, which scrutinized $7 billion in dollar debts accumulated under the bank’s previous leadership.

In the aftermath of the 294th Monetary Policy Committee meeting in Abuja, Yemi Cardoso, governor of CBN,  disclosed to journalists that the investigation, supported by the Economic and Financial Crimes Commission, among other security bodies, aims to clarify the legitimacy of these FX allocations identified as problematic by the audit.

“It was determined that a number of these transactions did not qualify…they were outright illegal. The law enforcement agencies are now looking into those transactions that as far as we are concerned, are not valid to be paid,” Cardoso detailed, emphasizing the unlawful nature of these forex deals.

The crux of the investigation lies in the audit findings that a significant portion of the scrutinized transactions lacked proper documentation and, in many instances, were deemed outright illegal.

However, the unfolding investigation has raised concerns within the organized private sector, with some entities contemplating legal action against commercial banks for unresolved forex bids.

Despite these tensions, Governor Cardoso reassures that the foreign exchange market remains open and transparent, inviting stakeholders to address their forex needs through the official channels.

Furthermore, Cardoso clarified the distribution of fertilizers to farmers as a one-off measure and not indicative of a shift back to direct interventions by the CBN, underscoring a commitment to strategic, regulatory governance rather than direct market involvement.

 

 

 

 

 

 

 

 


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CBN Urges Banks to Expedite Action on Recapitalisation

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Central Bank of Nigeria (CBN) has directed deposit money banks in the country to expedite action to increase their capital base from the current ₦25bn.

CBN Urges Banks to Expedite Action on Recapitalisation

Olayemi Cardoso, governor of CBN

Olayemi Cardoso, governor of CBN, stated this during the apex bank’s 294th meeting of the Monetary Policy Committee (MPC) on Tuesday in Abuja, when the MPC hiked the interest rate by 22.75% to 24.75%.

The apex bank chief said the MPC examined developments in the banking sector and expressed satisfaction that the industry remained stable. The committee, however, said to guard against risk, commercial banks in the country should accelerate their recapitalisation efforts.

Cardoso said, “The MPC also reviewed developments in the banking system and noted that the industry remains safe, sound, and stable. The committee thus called on the bank to sustain its surveillance and ensure compliance of banks with existing regulatory and macro-potential guidelines.

“The MPC also enjoined the banks to expedite actions on the recapitalisation of banks to strengthen the system against potential risks in an increasingly globalised world.”

 

 

 

 


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