Legal Explainer: Innoson “Takes Over” GTBank – Meaning.

Must Read

List of Guaranty Trust Bank Sort Codes & Branches (with addresses) in Nigeria

The sort code is a number that usually identifies both the bank and the branch where an account is...

Top 10 Most Expensive Universities In Nigeria

For many Nigerians, high-quality higher education is a luxury. There are many private universities who are known not only...

List of Access Bank Sort Codes & Branches (with addresses) in Nigeria

The sort code is a number which usually identifies both the bank and the branch where an account is...
Legal Explainer: Innoson “Takes Over” GTBank - Meaning.Legal Explainer: Innoson “Takes Over” GTBank - Meaning.

Background

  • Innoson Nigeria Ltd (“Innoson”) had at the Federal High Court, Ibadan, obtained Judgment delivered on 20th December 2010 against the Nigeria Customs Service and the Attorney-General of the Federation sued as Defendants. Guaranty Trust Bank Plc (“GTB” or “GTBank”) was not a party to the suit. The Judgment sum was over Seven Hundred Million, Two Hundred and Twenty-Two Thousand Naira (N700,220.000.00) plus accrued and accruing interest at the time which came to about N2.4 Billion.
  • In a bid to enforce the Judgment against the Defendants, Innoson moved to seize the monies of the Defendants at GTB by way of garnishee proceedings. GTB later disclosed that it was only Nigeria Customs Service that has an account with the Bank but was found, according to the court, to be ambivalent, blowing hot and cold, on the state of the account of Nigeria Customs.
  • At the end of the garnishee proceedings, the Federal High Court made an Order absolute against GTB ordering the Bank to release the relevant funds belonging to the Nigeria Customs to Innoson.
  • GTB appealed the Order absolute up to the Supreme Court and was even found challenging the case of Innoson against Nigeria Customs, a case it was not a party to. Of course, the conduct of the Bank, ill-advised as it were, was not unconnected to the separate issues and acrimony long existing between the Bank and Innoson. The Supreme Court was livid and came down heavily against the Bank in a remarkable pronouncement.
  • The Apex Court upheld the Judgment of the Court of Appeal, affirming the Judgment of the Federal High Court which ordered GTB (by way of Garnishee Order Absolute) to pay the said N2.4 Billion to Innoson with a 22% interest, per annum, on the Judgment Sum until when it is finally paid.
  • Having refused to obey the Judgment of court, Innoson moved to enforce the Order/Judgment against GTB by obtaining a Writ of Fieri Facias (Writ of FiFa) issued by the Federal High Court Awka, Anambra State Division.
  • It is important to mention that, in line with the law, the moment GTB failed to release the money belonging to Nigeria Customs in its account to Innoson, GTB has converted itself to a Judgment Debtor to Innoson. Innoson is free to treat GTB as such by taking steps to enforce the Judgment against GTB.
Read:  Snapchat Introduced Snappables, AR-Enhanced Interactive Lenses
Read:  National Household Kerosene Decreased To N305.55 In February 2019 From N306.28 In January 2019

Legal Implication

Based on the above background, the Writ of Fifa issued to Innoson does not empower Innoson to “take over GTB”. No. It does not also mean that Innoson now owns GTBank. A Writ of FiFa is a document issued by order of the court that empowers a judgment creditor, like Innoson in the instant case, to move in and seize the assets of a judgment debtor like GTB. in this case. Therefore, Innoson can only seize the assets of GTB (through Court Sheriffs who are legally so empowered) for the purpose of disposing of same (by way of sale) towards satisfying the amount now owned by the Bank to Innoson.

First and foremost, it must be noted that the banking industry is a highly regulated industry in Nigeria. There are standard procedures for the taking over of a company in Nigeria. The procedures are even stricter in the case of banks as the process must involve the relevant authorities including, primarily, the Central Bank of Nigeria and the Securities and Exchange Commission. This is in view of the significant role banks and the financial sector generally, play in the economy of the nation. Issuance of the Writ of Fifa is certainly not one of the ways a bank can be taken over in Nigeria.

Read:  October 2019 FGN Savings Bond Offer for Subscription

Thus, the expression, “Innoson has taken over Guaranty Trust Bank Plc”, must mean something entirely different in the context of the current legal battle between Innoson and GTBank. It does not, and cannot possibly have the meaning it connotes in the news making rounds.

It is admitted that the exposure of GTBank (which now reportedly runs over N8 Billion in view of the Judgment sum hanging over its head in favour of Innoson) is huge and capable of negatively affecting the Bank’s financial stands and possibly, its corporate existence. However, this does not mean that Innoson has now taken over GTBank. The Bank has a number of options that will enable it to wriggle out and/or manage the current crisis. The writer is confident that GTBank has the benefit of sound legal advice as well as financial advice in this regard. The first port of call is for the Bank to take hold of, for the purpose of releasing to Innoson, the monies standing to the credit of the Nigeria Customs Service who was the Judgment Debtor ab initio. 

- Advertisement -

WRITTEN BY: STEPHEN AZUBUIKE

This article appeared first on Stephen Legal…

- Advertisement -

Subscribe to BrandSpur Ng

Subscribe for latest updates. Signup to best of brands and business news, informed analysis and opinions among others that can propel you, your business or brand to greater heights.

Latest News

Singapore Start-Ups ‘Up’ by BetterTradeOff and digital wealth manager Syfe Partner to Provide Peace of Mind Amid Uncertain Times

SINGAPORE - Media OutReach - 2 April 2020 - Two Singapore-based start-ups, life planning platform 'Up' by BetterTradeOff (www.upplan.sg) and digital wealth...

CPA Australia: 44 Per Cent of Small Businesses in Hong Kong Sought External Funds for Survival Before Covid-19 Pandemic

HONG KONG, CHINA - Media OutReach - 2 April 2020 - The 11th APAC Small Business Survey conducted by CPA Australia reveals that 44 per cent of...

Nestlé Recognized For Higher Animal Welfare Standards

The 2019 Business Benchmark on Farm Animal Welfare (BBFAW) today recognized Nestlé’s efforts to enhance animal welfare (pdf, 2Mb) throughout its supply chain. For the first...

Mouka Donates 200 Mattresses to Ogun State Government For COVID-19 Isolation Centres

Mouka, Nigeria’s leading brand of mattresses and bedding products, has donated 200 mattresses to Ogun State Government for the enhancement of isolation centres used...

Golden Penny Donates Food Products Across The Country

Flour Mills of Nigeria Plc, Nigeria’s leading integrated food business and agro-allied Group, owners of the iconic food brand, Golden Penny has announced its...
- Advertisement -
BrandsPur Weekly Cartoons
%d bloggers like this: