BusinessDisputed Multi-million Naira AMCON Debt Perishes in Liquidated Heritage Bank – Solicitors...

Disputed Multi-million Naira AMCON Debt Perishes in Liquidated Heritage Bank – Solicitors to Approach NDIC For Recovery

June 9, (THEWILL)- An account-holder with Heritage Bank Plc, Frontel Nigeria Limited, who had bemoaned the non-settlement of a N200 million judgment debt decided in its favour by the Lagos Court of Appeal on March 30, 2022, has eventually lost his life investment, following the recent liquidation of the bank.

The judgment was on an appeal brought by Heritage Bank challenging the June 1, 2018 decision of a Lagos High Court which was in favour of Frontel Nigeria Limited.

The Story


Frontel had in 2009 sought legal redress over a loan facility it claimed was wrongfully ascribed to it by Heritage Bank. Frontel Nigeria Limited, which has Alhaji Samsudeen Owonifari as its Managing Director, won the case at the Lagos High Court on June 1, 2018. Heritage Bank went on an appeal and lost.

Speaking through their Counsel, Victor Ukutt, the account-holder lamented that the non-settlement of the judgment debt had exacerbated the misfortunes of Owonifari and his company since 2008 when their ordeal began. He disclosed that Heritage Bank (then Spring Bank) had wrongfully classified Frontel Nigeria Limited as a debtor and cleared the balance in his personal account.

Ukutt told THEWILL that Alhaji Owonifari had descended into unimaginable penury and his business had totally crumbled, following the wrongful classification of his account as a debtor and a bad debtor to the bank and the illegal debit of the accounts of the firm and its managing director.

“Alhaji Owonifari is now a ghost of himself. He is on life support, depending on friends and family members for survival. His workers have all left since the collapse of his business. I can tell you that the man has relapsed into penury with his family in extreme poverty.  His condition is pitiable; he cannot meet basic financial obligations in any way,” Ukutt, principal partner at Victor Ukutt & Co, told THEWILL in his Surulere, Lagos Chambers.

According to Ukutt, the matter stemmed from a loan facility which Heritage Bank claimed to have extended to his client but had been pronounced as fictitious and non-existent by the court.

The Genesis

Sometime in 2008, Alhaji Owonifari applied for a credit facility of N200 million from the defunct Spring Bank (now acquired by Heritage Bank) to enable it to finance the business of lifting one million litres of Automotive Gas Oil (AGO), also called Diesel, from a supplier, Rahammaniyya Global Resources Limited. Some documentations and activities were spelt out as condition precedent for the granting and draw down of the credit facility. This includes executing a tripartite agreement with the owner of a warehouse facility. When the loan was not forthcoming, Alhaji Owonifari sourced the product from another supplier to meet the demand of his customer.

Without granting the credit facility, the bank deducted about N1 million “loan fee” from the Frontel account on July 15, 2008. The bank did not stop there. It went further to wipe out the balance of N15 million in the account on condition of the alleged credit facility.

Following the bank consolidation of 2009, Frontel Nigeria Limited was published in the national newspapers as a bad debtor that contributed significantly to the distress of  Spring Bank with N170 million non-performing loan, The bank engaged the services of the Economic and Financial Crimes Commission (EFCC) to arrest Alhaji Owonifari and recover the alleged debt. This move compelled the account-holder to seek redress, sparking off a 14-year legal tussle that culminated in the Appeal Court’s judgment in March 2022.

Giving further details, Ukutt said his firm demanded a comprehensive statement of Frontel’s account which contained startling revelations: the sum of N136 million was credited to the account of Frontel Nigeria Limited and, instantly, transferred to another account, later identified as Energy Factor Marine Oil Services Limited without the knowledge, instruction or consent of Alhaji Owonifari. The bank claimed that out of the sum, N14 million was 10 percent equity contribution of Alhaji Owonifari, as agreed in the contract of credit facility.

However, Energy Factor Marine Oil Services Limited was unknown to Owonifari and his company; and was never a party to the loan contract. The bank’s claim that the transfer was based on the instruction of Owonifari could not be supported with any documentary evidence. Besides, the bank alleged that Frontel had refused to pay the indebtedness despite repeated demands, which had accumulated to N183.3 million.

Ukutt told this newspaper that before the revelation, his client had requested his account statement several times, but it was not provided.

Ukutt explained further: “When Sanusi (Sanusi Lamido Sanusi, former CBN governor) dissolved the boards of the insolvent banks, Spring Bank claimed that my client contributed to the collapse of that bank and that it was heavily indebted to it. The CBN published the name of our client as among those responsible for the distress of Spring Bank.”

According to Ukutt, there were terms and conditions for the facility.  One was that there had to be a tripartite warehousing agreement and with this, the bank would be the one to take over the responsibility of appointing the warehousing agents, take an insurance policy and confirm whether the supplier had the product.

“Until the confirmation of availability of the product, they cannot execute the warehousing agreement. The bank did not do that. The warehousing agreement was not executed. The bank did not even sign the warehousing agreement. The bank did not even confirm whether there was a product or not. The bank claimed to have released the sum of N137 million, into my client’s account.

“In one day, the bank transferred the whole money, both the N137 million it claimed to have credited to my client’s account and N15 million in my client’s personal account to an unknown destination.

“My client did not give instruction to transfer; he was not even informed about any amount being credited to his account.  It was when EFCC started chasing him about, that he invited us.”

Ukutt disclosed that both EFCC and AMCON had to withdraw from being party to the matter when they saw the nature of the case. He said the N200 million judgment debt was calculated on the basis of the N15 million personal money of Owonifari, which the bank wrongfully transferred to an unknown beneficiary and the accumulated interest at prevailing rate at the time the trial court delivered its judgment. He explained that the amount would continue to rise as long as the matter lingers.

The Judgment

The copy of the Appeal Court Judgment seen by THEWILL showed a unanimous decision of three-man Justices, Obande Festus Ogbuinya who delivered the judgment, Muhammad Ibrahim Surajo and Peter O. Affen.

The lead Justice combed the legal firmament to distill, in granular, extensive facts in support of the Justices’ decision to uphold the judgment of the trial court to the effect that Heritage Bank did not grant a credit facility to the account-holder, Frontel Nigeria Limited.

In reaching the decision, the Justices showed they relied extensively on the evidence and arguments advanced by the counsels to the Appellant and the Respondents, citing numerous authorities. This includes the argument by the respondents’ counsel that a bank that transfers a customer’s money without authorisation is deemed to have borrowed it and must re-credit his account. He described the money transfer without consent as breach of fiduciary relationship.

“On the whole, having resolved the six issues against the appellant, the destiny of the appeal is obvious. It is bereft of any morsel of merit and deserves the reserved penalty of dismissal.  Consequently, I dismiss the appeal.  I affirm the judgment of the lower court which was delivered on 1st June 2018.  The parties shall bear the respective costs they incurred in the prosecution and defence of the ill-fated appeal,” Justice Ogbuninya stated in conclusion of the judgment on Appeal No. CA/L/73/2019.

“The Appellant cannot, in law, find a claim/defence on agreement which it did not execute or an agreement that it totally breached by not complying with the terms therein. In also dismissing the appeal as unmeritorious, I adopt the reasoning of my learned brother, Ogbuinya, JSA, as mine. I abide by the order as to costs,” Justice Sirajo stated.


Bank’s reaction

When contacted earlier, the spokesperson of Heritage Bank, Ozena Utulu said the bank had appealed the judgment and would not make further comment.

But Ukutt disagreed when he was informed about the bank’s response. He said there was no appeal pending in either the Court of Appeal or the Supreme Court because the apex court has not granted the request of the bank to apply for leave which will authorise it to file a notice of appeal.

Ukutt confirmed that the bank had applied for leave to appeal, which has not been granted. “They filed a motion at the Supreme Court seeking permission or the leave of the Supreme Court to appeal. As we speak today (Thursday December 8, 2022, at 6.25 pm), there is no appeal pending in either the Appeal Court or the Supreme Court in respect of the matter. Until the Supreme Court grants the permission, or the leave, they cannot file a notice of appeal. Without a notice of appeal, no appeal exists.”

“We have responded by filing a counter to that motion they filed at the Supreme Court seeking the leave or permission of the Supreme Court to appeal. We have told the Supreme Court that the judgment they wish to appeal deals with concurrent findings of facts. When you are appealing a case that deals with concurrent facts, you are telling the Supreme Court to come and take over the traditional role of the trial court. In the hierarchy of courts, that is not the role of the Supreme Court.

“I restate that what is before the Supreme Court is the request for leave, or permission to appeal the decision of the Court of Appeal. Until that permission is given, there is no notice of appeal. Their application for stay of execution was thrown away at the Court of Appeal. They approached the Supreme Court and the stay was struck out. As we speak now there is no stay either at the Court of Appeal or the Supreme Court on this matter,” Ukutt stated.

Following the revocation of the operating licence of Heritage Bank by the CBN, Ukutt told THEWILL last week that he will pursue the N300 million judgement debt with the Nigeria Deposit Insurance Corporation (NDIC) which has taken over the assets and liabilities of now liquidated Heritage Bank.

About the Author

Sam Diala

Sam Diala is a Bloomberg Certified Financial Journalist with over a decade of experience in reporting Business and Economy. He is Business Editor at THEWILL Newspaper, and believes that work, not wishes, creates wealth.

Sam Diala, THEWILL
Sam Diala is a Bloomberg Certified Financial Journalist with over a decade of experience in reporting Business and Economy. He is Business Editor at THEWILL Newspaper, and believes that work, not wishes, creates wealth.

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