The Federal High Court, sitting Lagos, yesterday barred 20 banks from allowing Dansa Foods Limited (DFL) and Bulk Pack Services Limited (BPL) to operate any of their accounts pending the finally determination of a suit before it.
The companies, all owned by Alhaji Sani Dangote, a younger brother of the President, Dangote Group, Alhaji Aliko Dangote, were sued by Union Bank of Nigeria (UBN) for their alleged refusal to repay a N5billion loan they took about six years ago.
Justice Okon Abang, while delivering a ruling in the suit, said the order, effective from September 11, was necessary to preserve the substantive matter before the court. He ordered the banks to halt transactions on the accounts belonging to the two companies until the subsisting matter was finally disposed of. Continue...
The financial institutions affected by the order are: Access Bank, CITI Bank, Diamond Bank, Ecobank, Enterprise Bank, Fidelity Bank, First Bank, First City Monument Bank (FCMB), Guaranty Trust Bank (GTB) and Heritage Bank.
Others are: Keystone Bank, Mainstreet Bank, Skye Bank, Stanbic IBTC, Standard Chartered Bank, Sterling Bank, United Bank for Africa (UBA), Unity Bank, Wema Bank and Zenith Bank. Justice Abang ordered the banks to file affidavits to show cause on the details of Dangote’s companies’ accounts within five days. Besides, the court ordered Union Bank to file an undertaking to indemnify the defendants in the event that the freezing order ought not to have been made.
Justice Abang said: “In line with Order 28 Rule 2 of the rules of this court, an interim order is hereby made restraining the banks from allowing the defendants to operate their accounts with them, especially honouring withdrawal of funds.
“I think the dictate of justice demands that a preserving order should be made to preserve the res of this suit.” Union Bank had sued Dangote and his companies over an alleged failure to liquidate about N5 billion debt despite repeated demands.
The bank, had in separate suits last week asked the court to grant an order of mareva injunction, barring the banks from allowing the companies and their director, Sani Dangote, to withdraw funds deposited with them pending the final determination of the suits. The bank alleged that the order became imperative as the companies and their director “have been making frantic efforts to deplete the funds in the accounts of his companies with a view to evading liquidation of the facility even as the defendants had started diverting the funds to Dubai, United Arab Emirates (UAE), Canada and Switzerland.”
According to affidavits in support of the suits deposed to by Olufunmilola Ayoola, a Union Bank official, the alleged failure by the defendants to liquidate the debt had negatively affected the nation’s economy, especially as it had become difficult for Union Bank to extend credit facilities to boost small-scale businesses as a result of the alleged debt. The bank had in September 2008, granted the defendants the N5.2 billion facility which had become the subject of litigation.
The alleged facility, according to the bank, include a N500 million overdraft, N500 million advert loan, $2.5 million equipment lease, $2.5 million sales, and $30 million import finance. Although the facility had been reduced to N3.477 billion, the bank accused the companies of ignoring repeated demands to liquidate the debt. Till date, the bank said Dansa Foods’ indebtedness to it stood at N4.003 billion as at November 29, 2012 while Bulk Pack’s indebtedness was N745.145 million.
However, when the matter came up yesterday, the motion could not be heard as the defendants had filed objection challenging jurisdiction of the court to entertain the suit.
Of the 20 banks, only Diamond Bank and Zenith Bank appeared before the court. They also alleged that Dangote was equally indebted to them. Zenith Bank specifically told the court that Dangote was indebted to it to the tune of €7 million.
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