Polaris Bank In Trouble Over Prolonged Debt Mess

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Polaris Bank In Trouble Over Prolonged Debt Mess
Fraud: How Polaris Bank Top Staff Stole N12.6 Million From Customer-Brand Spur Nigeria

A prolonged legal tussle has quietly put asunder, the marriage of mutual benefits between two financial institutions in Nigeria, Polaris Bank, and VEP Equity Limited.

The union between the duo gave birth to two different loan facilities granted through a Skye Bank offer letter on July, 25th, 2006 to VEP Equity Limited. The loan totaling N500, 000, 000, 00 was paid in trenches of 250, 000, 000, 00 into VEP Equity Limited’s accounts numbers 1011770014560 and 1011770027905.

According to iReportnews the loan was secured amongst others by legal ownership of shares financed and valued in excess of 250 Million, hypothecation of a shrinkage margin of 75 Million Naira to be provided in cash or stocks, and full unconditional personal guarantee of the Chairman and Chief Executive Officer, CEO of the company, Mr. Edward Ajayi.

The second trenches of 250 Million were said to have been secured by legal ownership of the shares financed valued in excess of 325 Million Naira (130% of the facility amount) and with the full unconditional personal guarantee of the CEO, Edward Ajayi.

Polaris Bank In Trouble Over Prolonged Debt Mess

VEP Equity, according to Polaris Bank also secured another loan with an offer letter dated 4th of July, 2007. The sum of One Billion Naira was said to have been released to the company. This loan, according to Polaris Bank accounts, was secured by legal ownership of shares and financed in excess of One Billion Naira and personal guarantee of the company’s CEO.

Brand Spur Nigeria recalls that in March, 13th, 2008, the bank granted what it describes as Advance Only, a sum of two hundred and fifty million as a loan facility to VEP Equity Limited.

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The union between Polaris Bank and VEP Equity Limited was broken when the bank claimed that the third loan which was secured by a piece of land measuring 1439.881 square meters, was situated at Oniru Family Private Layout, Lekki, Lagos belonging to one Dr. Jaiye Oyedotun, and other collateral will be sold.

This according to the bank is due to the fact that the company is indebted to the bank, a sum of N2, 828,582,154, 77 (Two Billion, Eight Hundred twenty-Eight Million, Five Hundred and Eighty-Two Thousand One Hundred and Fifty Four Naira, Seventy Seven Kobo, and that there no hope the company would repay the loans it hitherto secured.

VEP Equity Limited however denies being indebted to Polaris Bank, alleging the bank of excessive and illegal charges.

The company also seeks a court order to compel Polaris Bank to refund the sum of N14, 901, 883, 437, 70. The company also seek a court injunction to compel Polaris Bank to pay 100% penalties if it fails to refund the money.