May 30, 2024

Court gives GTB nod to seize Afex over N17.8b Anchor Borrowers’ Loan

Why I can’t sack Awomolo, Body of Benchers' chair — Judge

By Innocent Anaba

A Federal High Court sitting in Lagos, yesterday, authorised Guaranty Trust Bank to temporarily take over the funds and assets of Afex Commodities Exchange following its N17.808billion indebtedness to the bank under the Central Bank of Nigeria, CBN, driven Anchor Borrowers’ Loan.

Trial judge, Justice Chukwujekwu Aneke granted GTBank an interim Global Standing Instruction, GSI, injunctive relief, following its application on May 27, 2024,

The judge made the order after hearing an ex-parte motion filed and argued by GTBank’s counsel Chief A. Aribisala, SAN and Ade Adedeji, SAN.

The N17.808billion comprises “N15.766billion being the amount outstanding and unpaid, as of April 17, 2024, on the loan facilities (with the accrued interest) granted by the plaintiff to the defendant.

“Pre-judgement interest on the N15.766billion at the prevailing rediscount rate of 28 per cent per annum approved by the CBN from April 18, 2024, when the plaintiff’s letter of demand dated April 17, 2024, was delivered to the defendant until judgment is delivered in this suit.

“Post-judgement interest on the said sum of N15.766billion and “Cost of recovery and incidental expenses in the sum of N2.041billion.”

GTBank is the sole plaintiff/applicant in the suit marked FHC/L/CS/911/2024, Afex Commodities Exchange is the defendant/respondent, while 27 commercial banks and all money deposit banks were listed as nominal respondents.

The plaintiff averred via a 285-page affidavit deposed to by its member of staff, Ifeoma Esemudje that the tenor of the facility was nine months, intended to finance smallholder farmers registered under the CBN Anchor Borrower’s programme.

The source of the repayment, it added was to come from the sale of the Maize produced while the maturity date for the loan was April 22, 2021.

But, according to the plaintiff, the defendant did not fulfil its end of the deal.

The plaintiff, through its lawyers, then approached the court for an interim Global Standing Instruction, GSI, injunctive relief.

It was gathered that GSI, launched in July 2020, by Nigerian banks and the CBN, authorises a creditor bank to recover its debt from any or all other accounts held by the debtor with other financial institutions in case of default by the debtor.

Before GSI, borrowers who defaulted on their loans to a particular financial institution were still able to maintain their bank balances in other institutions, even if those balances were sufficient to repay their debt.

Granting GTBank’s prayer, Justice Aneke ordered a “Place a No Debit” on all monies standing to the credit of Afex Commodities Exchange as of the day the order was served on the 1st to 28th respondent banks.

The order include “all such monies that may be credited into the defendant/respondent’s account afterwards until the defendant/respondent’s entire indebtedness to the plaintiff/applicant in the sum of N17.808billion is fully liquidated, pending the hearing and determination of the motion on notice filed by the plaintiff/applicant in this suit.”

The judge further directed all banks in Nigeria to move/transfer all monies standing to the alleged debtor’s credit (in the said debtor’s account domiciled in any of the banks) into the debtor’s account domiciled with GTBank with Account Number 0425755319 until Afex Commodities Exchange’s “entire indebtedness to the plaintiff/applicant in sum of N17.808billion is fully liquidated”.

The court also ordered the debtor to furnish it and GTBank’s lawyers, the debtor’s current statement of account, within 7 days of being served with the order.

The court adjourned till June 10, 2024, for hearing of the suit.