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N32 billion Debt Controversy: Innoson asks court to stop GTBank’s transformation

Innoson says GTBank’s transmutation to a private company or holding will affect its move to reclaim over N32 billion judgment debt the bank owes it.

Nigerian vehicle manufacturer, Innoson Nigeria Limited, has asked the Federal High Court to stop Guarantee Trust Bank (GTB) Plc from changing its legal status from a public limited liability company until it pays over N32 billion allegedly owed Innoson.

The two businesses have had a long business dispute with each claiming wrongdoing against the other.

The bank accused Innoson’s CEO Innocent Chukwuma of forging import documents to defraud the bank.

But efforts to arraign Mr Chukwuma, including by the Economic and Financial Crimes Commission (EFCC) failed, as the businessman allegedly resisted arrest while denying any wrongdoing.

Innoson has said the allegation of forgery against Mr Chukwuma was a decoy by the bank to run away from paying a debt owed the company.

The money in question rose from about N8.2 billion to over N32 billion due to accumulated interest.

In its latest suit, the company said the bank’s attempt to transmute to a private company or holding would affect Innoson’s move to reclaim over N32 billion judgment debt the bank allegedly owes it.

Joined in the suit are Central Bank of Nigeria (CBN), Securities and Exchange Commission (SEC) and the Corporate Affairs Commission (CAC).

PREMIUM TIMES gathered that the Central Bank of Nigeria (CBN) had this month granted approval in principle for the bank to change its status.

With the change, GTBank is expected to exit the Nigeria Stock Exchange.

But Innoson has now approached a court seeking suspension of the process until GTBank pays the ‘debt’.

On November 3rd, the Supreme Court of Nigeria struck out GTB’s motion filed to set aside its earlier decision of February 27 which dismissed the GTB’s appeal against Court of Appeal judgement of February 6, 2014, in favour of Innoson Nigeria Ltd.

The vehicle manufacturing company had on March 27, 2019, obtained an order from Federal High Court, Awka Division, granting it leave to enforce and execute the judgment and Garnishee Order Absolute made by a Federal High Court in Ibadan on May 18, 2010, and July 29, 2011, respectively.

This court order was concurrently affirmed by the Court of Appeal in the judgment of February 6, 2014, and by the Supreme Court in its judgment of February 27, 2019.

When Innoson Nigeria Ltd tried to execute the judgment, GTB went to court to file a motion on notice seeking orders to suspend the execution embarked by Innoson Nigeria Ltd and also seeking orders to set aside the exparte orders made by the court granting Innoson leave to enforce the judgment and to issue the processes of executing same.

The court, however, declined to accede the prayers of the bank, and instead affirmed the order it granted Innoson. It okayed the process of enforcing the judgment.

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The Supreme Court on November 3 sided with the lower courts by refusing an order setting aside its earlier judgement and that of the Court of Appeal.

Fresh legal battle

With the bank’s move to now change its legal status, Innoson Nigeria Ltd has now approached a Federal High Court in Enugu to halt the process.

In the suit filed on November 23 with suit number FHC/EN/CS/161/2020, the company sought an order of perpetual injunction restraining the CAC from deregistering the GTB as a public limited liability company and or re-registering the bank as a private limited liability until GTB pays the company outstanding judgment debt of N32, 875, 204, 984.38k arising from Suit Nos: FHC/L/CS/603/2006 and No. FHC/AWK/CS/139/2012 respectively affirmed by the appellate courts.

Innoson Nigeria Ltd also wants the court to issue an order “cancelling the 1st Defendant’s (GTB’s) special resolution and or any other of its resolution that it should be deregistered as a public limited liability company and or be re-registered as a private limited liability company and or a holding company until it–the 1st Defendant (GTB)–pays Innoson Nig Ltd the total outstanding judgment debt of N32, 875, 204, 984.38k (Thirty two Billion, Eight Hundred and seventy Five Million, Two Hundred and four thousand, Nine Hundred and Eight Four Naira, Thirty Eight kobo) arising from suit Nos. FHC/L/CS/603/2006 and FHC/AWk/CS/139/2012 respectively affirmed by the appellate courts in Appeal Nos. CA/1/258/2011, SC.694/2014 and CA/E/288/2013.”

The company also wants the court to issue an order setting aside the No-objection certification issued by SEC on GTB’s proposal to be re-registered as a private limited liability company and as a holding or a holding financial company.

The suit also wants the court to quash the approval-in-principle granted to the bank to operate as a holding or a holding financial company by the CBN.

The fifth prayer in the suit is for “an order of perpetual injunction restraining the 2nd Defendant from granting the 1st Defendant a financial holding company license and or a final approval to operate or carry on business as a financial holding company whether in its present name or as a private limited liability company until it, the 1st Defendant pays the Plaintiff the total outstanding judgement debt of N32, 875, 204, 984. 38k (Thirty Two Billion, Eight Hundred and Seventy-Five Million, Two Hundred and Four Thousand, Nine Hundred and Eighty-Four Naira, Thirty-Eight Kobo) arising from suit Nos. FHC/L/CS/603/2006 and FHC/AWK/CS/139/2012 respectively affirmed by the appellate courts in Appeal Nos. CA/1/258/2011, SC.694/2014, and CA/E/288/2013.”

A spokesman for GTBank, Oyinade Adegbite, did not respond to repeated calls to get the bank’s comments for this story.

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