N6.4b alleged illegal charges: Zenith Bank knows fate Monday

By Executive Editor, Judiciary.

A Federal High Court, Ikoyi, Lagos sitting before Justice Ayokunle Faji will on Monday, January 24, 2022 deliver judgment in a case of N6, 441, 369, 617.73 alleged illegal charges brought against Zenith Bank Plc by an independent oil marketer. The judgment was initially fixed for December 13, 2021 which was unavoidably stalled as a result of the statutory judges’ conference holding at that period.

At a resumed sitting of the court last week, Justice Faji, announced to the parties who were represented by their counsel, that the judgment was not ready and that the court was still within the 90 days prescribed by law to deliver its judgment after parties had adopted their addresses. He thereafter fixed January 24, for the judgment.

An independent oil marketer, Anthony Olushola Adejuyigbe and his firm, Tonique Oil Services Limited had in a suit marked FHC/L/CS/1584/12, accused Zenith Bank of alleged illegal charges amounting to N6.4 billion.  

The plaintiffs in their amended statement of claim filed before the court, through their lawyer, Mr. Lanre Ogunlesi (SAN) stated that in the course of its business activities his company, Tonique Oil Services Limited, applied for and obtained several credit facilities from Zenith Bank Plc, which he pledged three of his properties as securities for the facilities.

They also stated that three different transactions leading to the legal battle 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 for a reversal but Zenith bank bluntly refused.

The plaintiffs 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 had 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, 000 was credited into the company’s account.

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

They further 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 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 nosedived and depreciated.

The plaintiffs also stated that another activity on his Company’s current account with Zenilth Bank, was the sale and purchase of a property in Port Harcourt, Rivers State, that belonged 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 which introduce his company to the shareholders of 50,000 square meters of land out of which the company bought 20,000 square meters for the purpose of expanding its business earnings.

In the affidavit in support of the suit, Adejuyigbe 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, Zenilth Bank took possession of the title documents of the land as collateral while it 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 they are not indebted to Zenith Bank and any alleged indebtedness could only have been arisen as a result of the unconciounable and illegal acts of the bank’s officials in debiting the company’s account with astronomical and spurious interest charges. 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,  based on relevant policy circulars, guide to bank charges of Central Bank of Nigeria they 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 denied being indebted to the bank but said the bank has overcharged them to several billions of naira.

They 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 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 their company the sum of ₦6, 441, 369, 617.73, being the total excess charges debited from the company’s account by the bank and interest on the same amount at the rate of 21% per annum from the date of judgment of the court until final liquidation.

However, Zenith Bank in its statement of defence with statement on oath sworn to by senior assistant manager Internal Control and Audit Department of Zenith Bank, Mr Vincent Ohanugo and filed by it’s lawyers, Mr. Ajibola Lawal-Akapo and others, denied almost all the plaintiffs’ claims and stated that the company was granted several loans which included: ₦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 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. 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 as at January 31, 2013. 

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