N22.5bn Debt: Union Bank Asks Court to Stop Banks from Dealing with NICON
Category: Capital Market
Union Bank of Nigeria Plc has asked Justice Mohammed Idris of the Federal High Court in Lagos for an order of interlocutory injunction restraining NICON Investment Limited, Global Fleet Oil and Gas Limited and their promoter, Barrister Jimoh Ibrahim from presenting to the 24 commercial banks any mandate, instruction or otherwise for the withdrawal of any money or funds standing to the credit of any of the accounts of Nigeria Reinsurance Corporation Plc and NICON Insurance Limited maintained by them pending the hearing and determination of the substantive suit filed in respect of the N22.5billion debt owed it.
The court had last week ordered Global Fleet and Ibrahim, to stop dealing with its 51 per cent shares or any part thereof held in Nigeria Reinsurance Corporation Plc and NICON Insurance Limited.The order was sequel to the company’s refusal to pay the N22.5billion, being the outstanding of the amount granted to it by Union Bank of Nigeria Plc in January 2009 to do business and which it has failed and refused to liquidate.
Global Fleet Oil and Gas Limited, Nigeria Reinsurance Corporation Plc, NICON Insurance Limited and NICON Investment Limited are owned by Barrister Ibrahim.The court also restrained the oil company from selling, transferring or charging same in favour of any other creditor as security for loan or deal with the said shares in a manner that would have adverse effect or be inconsistent with the equitable interest of Union Bank of Nigeria Plc pending the hearing and determination of the motion on notice.
But in a motion on notice filed on its behalf by Kemi Pinheiro (SAN), the bank also wants the judge to restrain the 24 banks and their managers from accepting, honouring and giving effect in any manner presented by Ibrahim and his companies and their nominees in two insurance companies for the withdrawal of any sum of money or funds standing to the credit of any of their accounts kept and maintained at any of the banks or their branches.
It is equally demanding for an order permitting the operations of the accounts of the two insurance companies, who are the 3rd and 4th defendants in the suit, as may be kept and maintained at any of the 24 banks except upon the mandate or instruction of the 1st, 2nd, and 3rd defendants or their nominees in the insurance companies.
The bank stated except for meeting day to day operational expenses of business and with the consent of its solicitors, the court should make a pronouncement restraining Global Fleet and its nominees in the NICON Luxury and Services Limited from withdrawing any sum of money up to the tune of N27.3billion from any its accounts kept and maintained at any of the banks and their branches.
It further stated that except for meeting day to day operational expenses of business and with the consent of its solicitors the court should make an order restraining the banks from permitting any withdrawal of money standing to the credit of NICON Luxury and Services Limited to the tune of N27.3billion in any of the hotel’s accounts kept with them whether such withdrawal mandate is presented by the 2nd defendant, 25th respondent or otherwise.
In an affidavit in support of the motion on notice sworn to by Chukwudi Enebeli, the bank said pursuant to the order made by the court on November 15, 2010 which was published in the newspapers, the defendants, particularly NICON Investment Limite, Global Fleet and Barrister Jimoh Ibrahim, have embarked on surreptitious moves to move funds in the accounts of the insurance companies.The bank contended that if the orders are made, the amount standing to the credits of the insurance companies which form part of the current assets of the companies would be dissipated and diminished and this would adversely reduce its shareholding value in the companies
It further argued that unless a restraining order was made, the defendants would use their cronies to transfer funds away from the insurance companies and render the eventual judgment barren.
It therefore urged the court in the interest of justice grant the orders especially since the Jimoh Ibrahim is still the controlling officer of the insurance companies by virtue of his nomination to the board of Directors of the 3rd and 2nd defendants as a controlling shareholder.