The popular Yoruba musician of Juju genre Sir Shina Peters once sang that all cases are linked to cunning Tortoise, this same is the issues with the organization we are writing about as similar situation keep rearing its head in its business transactions.
It is general knowledge how difficult it is in doing business in Nigeria, above this is to enter into business transaction a financial partner with questionable trust pedigree. Though cases of betrayals is common in the business world as they sees it as the survival of the fittest, but a situation whereby bulk of those shouting foul mostly have dealings with a supposed reputable financial institution in the country calls for a careful look-into;
For sometimes now one of Nigeria’s leading financial institution Guaranty Trust Bank (GTBank) has been having running battle over partnership deal with one of its clients, Innoson Groups, the case which is dated to as far back as around 2002 when the company approached the bank for a loan of N1.3billion.
According to a statement from Innoson Groups, it was discovered that they have been over-charged by the bank on the company’s account with the bank to the tune of over N780 million after the both parties had agreed to employ MULTI-WINGS Consulting Firm an independent auditing firm to look into the excess deduction, this was later to be reduced to N559.3Million after GTBank had conducted its internal audit, but the bone of contention however was for the bank to also pay-back on it the 22 per cent interest they charged on the loan.
This, Innoson Group source revealed was rejected by GTBank who claimed it can only pay 7 per cent interest against the 22 per cent deducted and it was this stand that led the group to the court the outcome of which is currently being heard by the Appeal Court. It would be recalled that some months back the air space was agog for the news that the Supreme Court of Nigeria had ordered the GTbank to pay a certain amount to Innoson Group, though this was later denied by the two parties.
However the true picture of things as it is currently being heard at the Federal Court of Appeal Enugu Division, is that a Federal High Court had delivered a judgement in 2013 that GTBank should pay N4.7 billion to Innoson Motors as restitution for arbitrary charges, a decision the bank challenged to the Enugu Division of the Court of Appeal.
In December 2014, the Court of Appeal reportedly asked GTBank to deposit about N6 billion in an interest-yielding account under the supervision of the deputy registrar at the Enugu Division. The bank filed another temporary motion for a stay of that decision at the Supreme Court, the money according to a source has accumulated to over N14 billion at 22 per cent interest as at present.
On June 7, the Supreme Court reportedly asked all parties to return to the Court of Appeal for the substantive trial to be determined before hearing the application on whether or not the order of the Court of Appeal for GTBank to pay funds into an interest-yielding account should be set aside.
The two parties has since then returned to the Court of Appeal for further hearing on the matter over the verdict of the Awka Division of the Federal High Court.
The bank has been involved in one too many of such cases in the past in which partner companies either suffer heavily or goes bankrupt and one of cases is when the bank made move to take over properties of erstwhile Governor of Oyo State, Chief Rashidi Adewolu Ladoja, over a loan his company, Hi-Nutrient International limited got from the bank, it will be recalled that Guaranty Trust Bank (GTBank) is becoming popular for such actions, which invariably means the bank is either giving desperate business owners an unachievable condition of loan or that they love having relationship with those that are likely to default.
If it will be recalled the bank had in the past not too long had such confrontation with the family and company of the late Aare Musulumi of Nigeria, Alhaji Alao Arisekola, and before that is the case of satellite pay TV, HITV owner by Toyin Subair.
The continuous problem the bank is having with their business partners or customers over issues that has to do with loans therefore make it important to actually find out the modalities involve that almost made their loans impossible to pay back.
More than ten years ago, the news that GTBank will be pulling out of its partnership with Entertainment Highway Ltd the company that owns the then rave making satellite pay TV, HITV, was received with shock simply because the company just bided and won the right to broadcast the highly lucrative and most sought after English Premier League (EPL) for another three years after the first five years just lapsed, the right will be the icing on the cake of the company which is also at that time having the right for English F.A. Cup tournament as well as UEFA organized Champions and Europa Leagues, making it a pay TV to envy in every sense.
The news making rounds then was that the company and the man running it then not only defaulted but are also lavishly spending the resources of the company, all these allegations that sparked outrage against him was recently addressed in an interview he granted an online media recently where he explained he was actually spending personal fund on running some chores of the company and because he can boast that he has never dipped his hands into the purse of the company made him threw caution to the winds.
In the interview he explained further that the company would have been able to stand the test of time if not for the clause that allowed the founding shareholders power to block the company from raising money or selling off a subsidiary, he explained further the damage role the bank played when they lead the company on that it will be issued the bank guarantee of $70 million needed to finally own the right after they had make a deposit of $40million for the EPL right only to withdraw on the eve of the deadline day, and that the other bank turned to could only make it available a day after the deadline.
The actions of the bank after the loss showed some underground connections had been going on as the company was possessed and the existing rights were sold to Multichoice owned DSTV, sources alleged the transaction was done with the company also moving some of their account to the bank making the bank one of their banking partners.
In the same vein the bank was also in the eye of the storm when it made another move to take over the properties and company of the late Ibadan based billionaire Aare Arisekola Alao over another purported loan, the story was that Arisekola had some money with the bank and they agreed to add money to it to buy shares of another company after which they will be sharing the interest this is according to an information retrieved from the library and credited to Arisekola’s lawyer -Chief Lowo Arowolo Obisesan of the Black and White Law Firm, where he was quoted as saying the money was- ‘ used by the bank to purchase shares of First Bank Plc using the name of his business with the understanding that profits accruing from the investment would be mutually shared between him and the bank’
The statement according to the lawyer is that the arrangement started experiencing hiccups when ‘Contrary to the terms of agreement between GTBank and Aare Abdulazeez Arisekola Alao, the GTBank officials few months thereafter started to demand for repayment of its fund made available for the purchase of the shares and threatened to sell off the whole shares to recover its fund without regard to some shares deposited by Aare Abdulazeez Arisekola Alao as additional security for the fund’.
Though some stories allegedly linked Otunba Mike Adenuga to the purchase of the share but Arisekola’s lawyer only claimed the shares were sold at below the actual value while the bank was asking him to make up for the short fall, and it was this short fall that constituted the debt the bank claimed he and his companies in Lister Group were owing’
This scenario happened in 2011 when the business mogul is still alive and the bank waited till 2014 after his death to swing into action again approaching a Federal High Court sitting in Lagos which also directed the family to maintain status-quo and not sell assets of late politician, the bank had refiled the case against the Estate of Arisekola Alao and two of his companies, Lister Flour Mills Nigeria Limited and Lister Oils Limited, over the alleged indebtedness to the tune of N7 billion, this, a source alleged is in connivance with a longtime friend of the billionaire who intend to use the bank to acquire the family’s tank-farm, and GTBank is said to be playing another role in the whole crisis.
It is based on this that it will not be surprising if Ladoja owned Hi-Nutrient International limited, release a statement debunking the allegation and claim that a bank that is supposed to be the most customer friendly Nigerian bank is actually conniving with another person to betray their corporate trust.