Zenith Bank In Messy N6.4bn Deals

Alleged Zenith Bank's illegal charges

Justice Ayokunle Faji of a Federal High Court sitting in Ikoyi, Lagos will on 17th January 2022 deliver judgment in a suit against Zenith Bank Plc, over alleged Six Billion, Four Hundred and Forty-One Million, Three Hundred and Sixty-Nine Thousand, Six Hundred and Seventeen Naira, Seventy-Three Kobk (N6, 441,369,617.73) only alleged illegal charges filed by an independent oil marketer, Anthony Olushola Adejuyigbe

Justice Faji had on 29th October 2021 fixed 13th December for judgment after parties adopted their final written addresses. However, the case could not go on due to the ongoing judge’s conference taking place in Abuja, the Federal Capital Territory.

Adejuyigbe and his company, Tonique Oil Services Limited, had in 2018 instituted suit FHC/L/CS/1584/2012, against Zenith Bank Plc, over alleged illegal and excessive charges to the tune of Six Billion, Four Hundred and Forty-One Million, Three Hundred and Sixty-Nine Thousand, Six Hundred and Seventeen Naira, Seventy-Three Kobo (N6, 441,369,617.73) only

In his amended statement of claim, Adejuyigbe through his counsel, Lanre Ogunlesi (SAN) revealed that in the course of his 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 facilities.

Adejuyigbe informed the court that three different transactions that necessitated the institution of the case occurred in his company’s Current Account where the alleged excess and illegal interest and charges were discovered and that upon discovery of the said charges, the company demanded a reversal but Zenith Bank bluntly refused.

He also stated that a forensic accounting firm was engaged to scrutinise and analyse the said account and that it was discovered that between August 2006 and December 2013, excess interest and charges by Zenith Bank Plc. had accumulated to the tune of One Billion, Eight Hundred and Forty-Two Million, Four Hundred and Seventy-One Thousand, Eight Hundred and One Naira, Ninety- Nine Kobo (N1, 842, 471, 801. 99) only.

Adejuyigbe equally maintained that by a letter dated 19th February 2008, Zenith Bank granted his company commercial paper facility of Two Billion, Five Hundred and Sixty-Eight Million, Six Hundred and Forty-Four Thousand, Two Hundred and Seventy-Six Naira, Nine Kobo (N2, 568, 644, 276. 09) only to finance the purchase of 30,000MT of petroleum products, but that only Two Billion, Five Hundred and One Million, Two Hundred and Seventy Thousand (N2,501,270, 000) only was credited into his company account.

According to Adejuyigbe, rather than for Zenith Bank to finance the purchase of 30, 000 MT of petroleum products for the company as per the letter of offer, the bank diverted the entire sum of Two Billion, Five Hundred and One Million, Two Hundred and Seventy Thousand (N2,501,270, 000) only for the purchase of its shares during the bank’s Initial Public Offer (IPO), an action he described as unethical, unprofessional and reprehensible.

The oil marketer also added that out of the sum of N104, 363, 212. 03 million assessed as dividends payable on the bank’s shares, only N42,173,498.43 million was credited into his company’s account, leaving an outstanding balance of N62, 169, 713. 60.

He further maintained 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 nosedived and depreciated.

Adejuyigbe is also querying the sale and purchase of a property in Port Harcourt, Rivers State, that belongs to one of the shareholders/customers of Zenith Bank who, he claims, needed to clean up some of his obligations to the bank, stating that it was the bank who introduced his company to the shareholders’ 50,000 square meters of land out of which the company bought 20,000 square meters to expand its business earnings.

He averred that to facilitate the purchase of the said land, Zenith Bank offered the company a term loan of Five Hundred Thousand Naira (N500,000) only and that it was part of the 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.

Adejuyigbe further stated that after the purchase of the land, Zenith Bank took possession of the title documents of the land as collateral while reneging 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.

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

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

The plaintiff’s financial consultant computed other charges that were passed into the account of the company, based on relevant policy circulars, a guide to bank charges of CBN and discovered that the bank excessively overcharged the company on interest on an overdraft, COT, and VAT on COT, management fees, upcountry transfer fees, interest on commercial paper, foreign exchange purchases and letter of credits.

Adejuyigbe is contending that he is not indebted to the bank, rather the bank has overcharged him to several billions of Naira. He urged the court to declare that Zenith Bank, been a bank within the and control of CBN cannot charge interest on any facilities granted to him beyond the officially approved policy rate of the CBN

He equally asked the court not only to restrain Zenith Bank from selling his properties 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 the judgment of the court until final liquidation.

But Zenith Bank in its statement of defence, with its statement on oath sworn to by Senior Assistant Manager internal control and Audit Department, Vincent Ohanugo and filed by its lawyers, Ajibola Lawal-Akapo and others, denied the plaintiff’s 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 plaintiff authorized Zenith Registrars Plc to take steps to purchase the shares of the bank on its behalf, while also pledging 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.

Zenith Bank also said the allegation of unethical conduct, lack of competence and professionalism against it by the plaintiff was made out of malice, confusion and frustration on the part of the plaintiffs.

The financial institution equally posited that it did not enter any understanding with the plaintiff to finance the construction of Tank Farm for the company, with an additional position that the plaintiff’s assertion that he is no longer indebted to the bank is a mere denial and therefore challenged the plaintiff to provide evidence of payment of all the credit facilities availed to them by the bank.

Zenith Bank also stated that the plaintiff’s suit did not disclose any cause of action against it, as the plaintiff is still indebted to it in the sum of Eight Billion, Four Hundred and Sixty-Four Million, One Hundred and Seventy-Six Thousand, Three Hundred and Fifty-Six Naira, Fifty-Two Kobo (N8, 464, 176, 356.52) only as of 31st January 2013.

The bank, therefore, urged the court to dismiss the suit for being frivolous and amounting to an abuse of the court process.


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