A businessman who wants a loan is almost ready to do anything. He would grovel if the loan officer asks him to, he would bark like a dog if he needs to. However, the moment the loan is granted, he becomes egoistic and wants to cross all the ‘T’s and dot the ‘I’s of the contract.
This seems the story of the average Nigerian businessman who needs a loan for his business, but is just not ready to pay back, so he consciously or unconsciously schemes a way out.
Like a lazy young man being fed by his father, he begins to imagine that he could have gotten a better deal. He starts to ask himself how he didn’t see the loopholes in the contract forgetting that the so-called loopholes were the condition for granting the loan, and that he only got the loan because the bank offered it to him on their term, a term he gladly accepted.
With the number of bank/businessmen cases scattered in several courts all over Nigeria, one is forced to wonder if businessmen makeup their minds not to pay back loans obtained from banks. One is also forced to ask if these men obtaining the loans are aware that if they don’t pay back, others won’t get.
In most cases, businessmen tag the bank the villain, the bully and the thief. Tales of interest not properly calculated abound; gist of banks dragging their customers to court to recoup their monies is like a never ending story in Nigeria. But in all of the situations, businessmen and some soft brained individuals conclude that the bank is the one to be blamed.
Generally, businessmen seem to easily reach a quick concluded that the bank is always after their collateral and business. Shamefully, issues that are supposed to be sorted in court become a social media topic, a farce indeed.
One fact which can and should never be forgotten is that a man who borrows should know that he would on an agreed date payback his debt. This is the basic meaning of a loan, but it seems to elude some Nigerian businessmen.
This is not the story of GTBank and Innoson, no it is not. In fact, it is the tale of a seemingly endless trend being suffered by Nigerian banks in the hands of businessmen, who obtain loans that they don’t intend to pay back or are just too dull to manage profitably. Access Bank, Zenith Bank and several other banks have walked this path and the truth is that soon, banks might decide not to give out loans anymore, who will blame them?
The GTBank/Innoson legal battle is just another story of a loan granted with reluctance to pay back. Below is a basic analysis of what went wrong.
- GTBank (in 2009) granted Innoson several credit facilities (i.e loans) totalling N2,400,000,000,00 (two billion, four hundred million Naira only), to part finance working capital requirements, import new motorcycles and motorcycle spare parts, agricultural spare parts and plastic manufacturing equipment (“Imported Goods”).
- Under the loan terms agreed by Dr. Innocent Chukwuma on behalf of Innoson, proprietary interest in the Imported Goods was consigned exclusively in favour of the Bank. This means that the Bank was the exclusive owner of the Imported Goods. Accordingly, the original shipping documents (i.e. the Bills of Lading) were in the custody of the Bank, and have remained in the custody of the Bank at all times.
- Because GTBank was the exclusive owner of the imported goods, ownership of the goods could only be transferred to Innoson (or any other third party) by the Bank. The condition in the agreement between the Bank and Innoson, for the release of the Imported Goods by the Bank to Innoson, was the payment of 25% of the value of each Letter of Credit transaction by Innoson.
- Innocent Chukwuma approached the Bank, on behalf of Innoson, requesting the release of the shipping documents without payment of the agreed+ 25% equity. The Bank declined his request as a result of Innoson’s failure to meet the agreed conditions.
- It came to the Bank’s knowledge sometime in June, 2011 that the Imported Goods for which the Bank declined to release shipping documents to Innoson in view of its failure to meet the agreed conditions, had been fraudulently procured by Innoson.
- The Bank discovered that Innoson, under the control of Dr. Innocent Chukwuma, had forged the Bank’s endorsement on the bills of lading to the Shipping Line and fraudulently cleared the Imported Goods which were in the name of the Bank. The Imported Goods, being property of the Bank should not have been cleared from the Port without the original shipping documents being endorsed by the Bank in favour of Innoson, or any third party.
- The signatures of 4 (four) staff of the Bank, to wit, Taofeek Olalere, Dan Attah, Bunmi Adeyemi and Amazu Amalachukwu, as well as the Bank’s stamp were forged on all the shipping documents used by Innoson to fraudulently clear goods at the port. The Bank did not at any time endorse or transfer the shipping documents to Innoson, as the originals of each of the relevant Bill of Lading remain in the Bank’s custody to this very day.
- When the Bank reported the matter to the Nigeria Police, Dr. Innocent Chukwuma claimed the Bank released the shipping documents to him. Consequently, the Police commenced investigation into the Bank’s complaint, including a forensic examination of the disputed signatures, and established that the signatures of the Bank’s staff were forged, and the Imported Goods were fraudulently cleared from the Nigerian Ports Authority by Dr. Innocent Chukwuma and his accomplices.
The Police Angle:
- Police investigations confirmed that Innoson and Dr. Innocent Chukwuma deliberately set out to defraud, steal from the Bank and convert the Imported Goods belonging to the Bank by deceptive means and through forgery and misrepresentation. The unlawful takeover of the Imported Goods, which served as the Bank’s collateral, left an indebtedness in excess of the sum of N1,654,481,895.04 (one billion, six hundred and fifty four million, four hundred and eighty one thousand, eight hundred and ninety five Naira, four Kobo) as at September 26, 2012.
- Chief Innocent Chukwuma was arrested and interrogated by operatives of the EFCC, following which he agreed to make monthly payments into Innoson’s account until the full liquidation of Innoson’s indebtedness to the Bank. However, Innoson defaulted in making the agreed payments. Investigations by the Nigeria Police following a petition by the Bank in September 2013 also found Innoson and Chief Innocent Chukwuma culpable of the criminal allegations levied against them by the Bank, and Chief Innocent Chukwuma was accordingly charged to court by the Police.
- The Police filed Charge No. FHC/L/565C/2015-Inspector General Of Police And Innoson Nigeria Limited; Innocent Chukwuma;Charles Chukwuma;Maximian Chukwura; Mitsui Osk Lines; Annajekwu Sunny for fraudulent clearance of goods, forgery, conversion, stealing and conspiracy presently pending before Faji J, at the Federal High Court, Ikoyi and adjourned to November 21, 2017 for arraignment/or hearing of motion for issuance of Bench Warrant.
- Innoson approached the Bank for a reconciliation of his account and pleaded for a debt forgiveness. A reconciliation was carried out on the account – which had a debit balance of N1,654,481,895.04 as at December 31, 2011. In the spirit of amicable resolution and EFCC intervention, the Bank said it agreed to forego the sum of N559,374,072.09 which represented default charges that has accrued on the account and debited in line with the loan agreement between the customer and the Bank.
- Based on this, the Bank decided to accept from the customer, the sum of N1,095,107,822.95 as full and final payment of the customer’s indebtedness to the Bank, provided that same shall be fully paid not later than (30) days from the date of the letter written to him
- Surprisingly, Innoson commenced suit no: FHC/AWK/CS/2012 against the Bank at the Federal High Court, Awka stating the bank had debited its account with excess charges totalling N559,374,072.09 and obtained judgement in excess of N4.7Billion against the Bank. Again, choosing to dishonour an agreement that was amicable reached between him and the Bank for a full and final settlement of N1,095,107,822.95 wherein the Bank graciously forgave him the sum of N559,374,072.09 which accrued on his account during the period which he abandoned his account.
- To further stall the criminal proceedings against him, Chief Innocent Chukwuma and his company instituted suits at the Federal High Court, Abuja, as well as the Federal High Court, Awka in January 2014 against The Inspector General of Police, The Nigeria Police Force and Investigating Officer(s), seeking declaratory and injunctive reliefs, including orders restraining the Police from commencing criminal proceedings against Innoson and Chief Innocent Chukwuma. Furthermore, in a bid to stall the Bank’s recovery steps, and distract the Bank from focusing on the criminal action, as well as civil actions filed for recovery of the debt, Chief Innocent Chukwuma and his company Innoson have continued to institute various spurious suits before various courts, claiming frivolous and outrageous sums against the Bank.
- In responding to Innoson’s motion for a stay of criminal proceedings at the Court of Appeal, the Honourable Justice J.S Ikyegh on September 17, 2017 dismissed the motion for being unmeritorious and ordered that proceeding in the criminal case against Innoson should proceed.
- On October 12, 2017, the Police through its Charge No. FHC/L/565C/2015- filed an application for the issuance of bench warrant against Innocent Chukwuma; Charles Chukwuma and Annajekwu Sunny for fraudulent clearance of goods, forgery, conversion, stealing and conspiracy presently pending before Faji J, at the Federal High Court, Ikoyi and adjourned to December 8, 2017 for arraignment/or hearing of motion.
The facts having been established, a man who obtains a loan should be ready to pay back. If he brings a proposal, he should be ready to follow the terms and condition to the later. In this case, the bank is NOT the villain.
Lukmon Akintola writes from Lagos state
NOVA Merchant Bank Rewards Excellence, Promotes One-Third of Workforce
In fulfillment of its commitment to be the best place to work and its policy of rewarding deserving staff members, NOVA Merchant Bank has promoted about a third of its staff who have demonstrated exceptional performance in their responsibilities.
These promotions come amidst the growth in the Bank’s business as it continues to scale up its operations.
In 2018, despite the tough economic and operating climate, NOVA in its first full financial year of operations, was able to deploy a state of the art and fully digital core banking application and recorded impressive strides in customer acquisition as well as the roll out of some bespoke and innovative products.
Speaking on the recent promotions, the Managing Director/CEO of the Bank, Mr Anya Duroha, while commending the staff for their hardwork said, “The Board and Management remain committed to developing and rewarding the talent of its youthful workforce”.
“The Bank will continue to leverage the innovativeness and dynamism of its young personnel to develop innovative solutions to enable our customers thrive in the marketplace. NOVA’s ’s strategies rely heavily on the unique talents each staff brings to the table. We do not take this for granted,” he said.
The Chairman of the Board, Mr. Phillips Oduoza while congratulating the newly promoted staff expressed the Board’s satisfaction and complete confidence in the staff and management of the Bank and pledged to continue to support them as they strive to achieve their corporate goals and objectives while realising their personal aspirations.
NOVA is a newly licensed merchant bank focused on providing wholesale and investment banking services. It commenced business in 2017 and has continued to boldly execute its roll out strategies.
Zenith Bank To Intensify Presence In Retail Segment —- Amangbo
Managing Director/Chief Executive, Zenith Bank Plc, Mr. Peter Amangbo, said that the bank is pursuing a retail strategy focussed on increased lending to small businesses, households and individuals at affordable interest rate.
He disclosed this yesterday in an exclusive interview with Vanguard Newspaper.
Noting that the sluggish loan growth in the banking industry in 2018 might persist this year due to the slow pace of economic recovery, Amangbo said that Zenith Bank has decided to focus on the retail segment to grow its loan book this year.
He stated: “We just talked about the loan volume going down in the industry but we are now looking at other areas. If the big ones are not taking loans you won’t fold your hands because those deposits that you are holding, the deposits can even sink a bank. If you take deposit and you don’t know where to deploy it, you can die in liquidity, that is what we normally say, you sink in that liquidity.
“So we are looking for other outlets. We are developing our retail end of the market and we are being very aggressive about that. We believe that is an area with a lot of potential.
We are looking at individuals, households, small businesses. We are reaching out to them with credit facilities, whether to pay school fees or to meet some obligations pending payment of their salaries or whether to develop their small businesses, we are reaching out; and about two weeks back, we had an event tagged, “Style by Zenith Bank.”
“The whole objective is to galvanise the economy to let them know that we are well positioned to serve small businesses and to serve households and individuals and even the students; that we are actually there for everybody. That is actually the stage we are moving to.
“We are not that perception that we are elitist; no, we are there for everybody, we have different offerings for everybody. So those that don’t even have security, we have ways of handling some of those things too.”
Referring to the difficulties most banks face in loan performance in the retail segment, Amangbo stated: “We try to be much more efficient in terms of how we do our business in that segment. If you are able to bring down your cost of funds, it is much easier to pass it on to our customers in terms of cost of lending to them.
And we believe if you are going to lend to the retail segment, households, small businesses and you are looking at those high rates, then you are inviting a bad loan.
“So for you to say you are going into retail, you must be sure of your cost of funds, which is what we are very mindful of, and that is why we said that deliberately we must bring down our cost of funds, which is basically what we are doing, so that it makes it much easier for us to lend in the retail space. Because the rate must be affordable, if it is not affordable from day one, you have set out to fail and to have bad loans.”
Zenith Bank has one of the lowest cost of fund in Nigeria banking industry, recording 3.3 per cent as at September 2018.
Union Bank Supports 6,000 Underprivileged Citizens During Festive Season [PHOTOS]
Union Bank, through its UnionCaresinitiative,provided relief for thousands ofthe underprivilegedby donating over 6,000 care bags containing staple food items.
The campaign, now in its third year,is co-funded by Union Bank and its employees. The bags containing nutritional staples included rice, beans, oil, salt and readymade stews. In various parts of the country, the Bank’semployees were seen handing out the bags to people in underserved communities.
The Bank also made financial donations to over 30 orphanages, care homes and NGOs including Wesley Schools for the Blind and Hearing impaired as well as Pacelli School for the Blind and Partially sighted children, all under its UnionCares umbrella.
The Head of Corporate Communication and Marketing at Union Bank, Ogochukwu Ekezie-Ekaidem described the initiative as one of the Bank’s ways of supporting charitable causes and contributing to the wellbeing of the needy, particularly during the festive season.
According to her;
“Union Bank will continue to lead the charge for social responsibility and impact. We are firm believers in supporting the communities within which we operate. This outlook drives the initiatives we organise and support under our Corporate Social Responsibility pillars.
We launched the UnionCares initiative to touch as many lives as possible during the festive season and it is fulfilling to see the level of impact the initiative has had.”
As part of its year end welfare initiatives, Union Bank also distributed care bags to children at the Makoko Christmas party organised recently by Slum2school.
The UnionCares initiative has come to be acknowledged as a viable platform which supports the less privileged. In 2017, the Bank and its employees also donated thousands of care bags to the needy across the country during the festive season.
Union Bank recently received the ‘Peoples’ Choice Award for theMost Outstanding Company in CSR/Sustainability’ at the 2018 Sustainability, Enterprise and Responsibility Awards (SERAs), emphasizing the Bank’s role as a socially conscious organization, actively supporting its host communities.
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