A Review of the Nigerian Energy Industry

Nigeria: Bank battles businessman over N750m debt

First Bank Nigeria Plc
First Bank Nigeria Plc

07 December 2014, Lagos — First Bank Nigeria Plc has drawn legal battle at the Federal High Court in Lagos against a businessman, Chidi Ajaegbu over alleged N750 million debt.

The dispute between the bank and its customer arose out of a contract of loan agreement in which the bank borrowed Ajaegbu the sum of $5million to purchase 203,500 Linked Units shares of MTN Nigeria Limited through private placement.

The loan deal was consummated between the parties sometime in 2008.

Ajaegbu drew the first blood when he instituted the suit against the First Bank (the first defendant) and Stanbic IBTC Asset Management Limited, praying the court to stop the defendants from selling his Linked Units shares in MTN Nigeria Limited among other reliefs being sought in court.

However, First bank in a 77-paragraph statement of defence and counter-claim, among others contended that the claimant in a letter dated January 23, 2008 sent to MTN Nigeria Limited and copied to it, the claimant irrevocably authorized MTN to place his MTN Linked Units shares on lien in favour of First bank.

Consequently, the loan in question, according to the first defendant, was secured with the Linked Units shares in MTN, in addition to the shares of CTC Global Ventures Limited and Rehoboth Assets Limited, two companies where the claimant has substantial and controlling interest.

By the terms of contact, the first defendant averred that the expiration date for the repayment of the loan facility was January 31, 2011.

It was the contention of the first defendant that the claimant had defaulted in his obligation under the contract having failed to liquidate the loan before the expiration of the agreed date and had breached the express terms of the contract which has also made its power to sell the Linked Units shares in MTN accrued.

However, the claimant contended that the alleged undue interest charges on the loan facility affected his obligation to service the loan as at when due and prayed the court to compel the first defendant to refund the alleged excess charges.
*Tunde Opesietan – Daily Independent

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