June 10, 2009

De-Lords Securities sues Access Bank over N1.5bn margin facility

By Dotun Ibiwoye

The effect of the meltdown in the capital market is gradually   surfacing, despite the return of the bullish trend in the market,   as a stockbroking firm, De-Lords Securities Limited has dragged Access Bank Plc to court for alleged breach of contract over a N1.5 billion margin facility granted it by the bank.

The stockbroking firm is praying the court to place an order restraining Access Bank, the Nigeria Police and their agents from carrying out further acts of harassment and intimidation against it, and is also seeking compensation for the alleged breach of contract and for trampling on the fundamental human rights of its agents.

According to the motion filed by the stockbroking firm, it secured a loan facility of N1.5 billion from Access Bank to finance its stock trading activities, running from April 22, 2008 to April 21, 2009.

The motion reads thus, “The condition of the loan states that De-Lords will use the facility to purchase shares and contribute 30 per cent of the value of the shares to the transaction which will be warehoused by Access Bank. Pursuant to this, De Lord paid N450 million to Access Bank as both parties entered into a joint memorandum of understanding to monitor the investment in stocks.

“As a result of the global credit crunch which resulted in the fall in the value of shares, Access Bank started selling the various shares bought by De Lords. After auctioning the securities, the bank wrote a petition letter to the Economic and Financial Crimes Commission, EFCC alleging fraud against De Lords.

“When the EFCC visited the office of De Lords, and discovered that the matter was a civil one, the commission refused to take action. On the 12th of March 2009, the bank’s agents invaded the premises of De Lords to unlawfully arrest and intimidate them while their driver, Adewale Okunuga and security guard, Eli Gideon were arrested and locked up for four days at the Police station, Corporate Fraud Unit, Ikoyi, before they were granted bail.”

In a sworn affidavit by Adewale Okunuga, a staff of De-Lords Securities, policemen from the Special Unit (Fraud), Ikeja started posting special police gazettes, declaring Mrs Cecilia Ajayi, Managing Director of De-Lords Securities wanted in many public and private places including police stations, air and seaports in Lagos and all other places for forgery and alteration.

He added further that Access Bank wrote to the Chief Immigration Officer to arrest Ajayi whenever and wherever she is found and that the Commissioner of Police through the Interpol, should take steps to extradite her from wherever she was.

According to Mrs. Ceclia Ajayi, Managing Director of De-Lords, the one year period allowed for the loan has not expired before Access Bank auctioned all the securities used as guarantee for the loan and the shares bought, adding that, in order to further prove that there is no criminal element in the transaction and further to the letter of offer and acceptance, Access Bank wrote two letters to it as to the position of its accounts after selling the collateral shares warehoused with the bank.

She said, “I believe that it is astonishing that the respondents can descend to the level of framing untrue and damaging statements in order to recover debts. I have not committed any offence, all I did was to enter into a loan contract with Access Bank and they have damaged my name and reputation and will continue to do so unless the application is granted.”

Access Bank has not filed their statement of defense against the suit, while the case which was held at the Federal High Court, Ikoyi, has been adjourned till June 29, 2009.