26 C
Wednesday, October 28, 2020
- Advertisement -

Fidelity Bank Sues Pascal Dozie over Bad Loan


#EndSARS Protest: A Fundamental Lesson in Democratic Governance – By Bola Ahmed Tinubu

I heavily grieve for those who have lost their lives or been injured during the period of these protests. My deepest sympathies...

#EndSARS Protests: Nigeria’s President Could Have Prevented Escalation of Violence but Poured Oil on the Fire Through His Silence – By Chidi Anselm Odinkalu...

Located in the central regions of Nigeria’s Delta State, Ughelli is a sleepy city in the Western Niger Delta and the unlikely...

We Must Get Children Back to Learning – But Business As Usual is Not an Option By Jutta Urpilainen and Henrietta Fore

A global joint op-ed by the EU and UNICEF on education for children “One child, one teacher, one book,...

Subjecting Anti-SARS Agitation to Political Interpretation is Jejune Partisan Stimulus By Chris Okotie

Chairman Mao once posited that if the people no longer fear your power, it is because another power is on its way....

In a bid to recover N1,977,820,556.22 debt, a commercial bank, Fidelity Bank Plc, has filed a lawsuit against the chairman of Diamond Bank, Mr. Pascal Dozie, before a Federal High Court in Lagos.

Also joined as co-defendants in the debt recovery suit are a property development company, BB Landmark Reality Limited and one of its shareholders, Mr. Okechukwu Enelamah.

In a statement of claim filed before the court on behalf of Fidelity Bank by Mr. Oluseyi Sowemimo (SAN), the bank alleged that sometimes in October 2007, BB Landmark Reality Company was granted a facility of $7.25 million to purchase a parcel of land at Ligali Ayorinde Street, Victoria Island, Lagos.

The facility had a one-year tenure and as security, BB Landmark Reality deposited with the bank, original title documents of the purchased land, while Mr. Pascal Dozie and Okechukwu Enelamah executed in favour of the bank, personal guarantee and undertaking personal and primary liability to indemnify the bank against all liabilities or losses arising from the loan transaction in the event of a default by BB Landmark Reality Company.

Upon the expiry of the facility, the company defaulted in the repayment, while it proposed to the bank the option of converting the debt to equity by the acquisition of shares in associated company, Landmark Victoria Development Limited.

The two parties entered into negotiation for the conversion and agreed that a shareholders’ agreement be drawn up to capture the modalities and terms of the proposed exercise.

A shareholders agreement was drawn up which the bank executed but the shareholders in the vehicle company refused to execute same. Rather, the officials of BB Landmark unilaterally amended the engrossed agreement surreptitiously introducing a clause which sought to subordinate the shares to be allotted to the bank to a facility granted to the company prior to the disbursement of $15 million by Diamond Capital Limited.

The bank raised an objection and refused to execute the agreement. Consequently, the negotiations were aborted and the bank, in a bid to secure the repayment of the loan, has called on personal guarantees of Pascal Dozie and Okechukwu Enelamah, but they have demonstrated clear intention not to honour their obligation.

Fidelity Bank avers that BB Landmark Reality Limited’s account reflects the balance due and unpaid debt of N1,977,820,556.22 as at 31 December, 2010 and demanded that same be paid.

While urging the court to declare that no shareholders’ agreement exists between the parties, the bank is also urging it to appoint a receiver over the assets of BB Landmark.

However, in a statement of defence and counter claim filed before the court on behalf of the defendants by the law firm of Simmons Cooper Partners, the defendants, while denying almost all the averments of the bank, argued that it is not entitled to any of the reliefs sought in its claim because immediately after the bank exercised the debt/equity conversion offer and taking up 17,380 shares in Landmark Victoria in full and final satisfaction of the $7.25 million loan granted to BB Landmark, its obligation to the bank had been extinguished.

Fidelity Bank thereafter nominated one Abdul Rahman Esene, an executive director of its Board of Directors as director on the board of Landmark Victoria and has been sitting during its meetings.

The defendants alleged further that in order to raise more capital to fund the project, Landmark Victoria invited Diamond Capital and Financial Markets Limited to also take up equity share capital at a premium valuation of $15 million. To this end, Diamond Capital was allotted 33,774 units of the company’s shares and consequently, the bank sought to off-load its equity investment and exit the company as a shareholder.

It was also alleged that in normal course of its banker/customer relationship, the company maintains two accounts with the bank and as at December 2010, the balance of the two accounts was N9.9 million to settle its staff salaries between December 2010 and March 2011, but the bank refused to honour mandate for the payment.

In view of this denial of access to its funds, the company has resorted to borrowing with interest to meet its obligations and since then, it alleged that the bank has been manipulating its accounts as contained in the statement of account when it was credited with N45,263,650 and then debited with N52,513,650, while it was charged with interest of N815,026.63, leaving a debt of N4,264,210.59.

Consequently, the defendants, while claiming N50 million in punitive damages for the bank’s breach of its bankers duty to the company, urged the court to declare that a debt obligation had ceased to exist between the two parties upon Fidelity’s conversion of the $7.25 million loan to equity investment in the share capital of Landmark Victoria vide the term sheet of the 4 June, 2008 agreement.

- Advertisement -


Please enter your comment!
Please enter your name here

- Advertisement -

Business Profiles

Theresa Ekong

Theresa Ekong is the Acting Head of Compliance at Providus Bank. She has over 18 years industry experience cutting across banking Operations,...

Mark Oguh

Mark has 22 years experience in the Banking industry covering Operations, Audit and Financial Control. He is also a...

Aina Amah

Aina Amah is a graduate of Economics from the University of Lagos and an MBA from the University of Nicosia, Cyprus. She...

Uyi Osagie

Uyi Osagie is the Chief Financial Officer of Allianz Nigeria. He joined Allianz as Financial Controller from 2014 and rose through the...

Usen Udoh

Usen Udoh is the Group Chief Human Resources Officer of the Dangote Group where he oversees a team of busines unit human...