By Tony Amokeodo

Monday, 22 Nov 2010

Union Bank of Nigeria Plc has initiated a legal action before the Federal High Court in Lagos against four firms and their alter ego (promoter), Mr. Jimoh Ibrahim, following the bank‘s claim that the defendants are owing it N22.55bn.

The four firms are NICON Investment Limited, Global Fleet Oil and Gas Limited, Nigeria Reinsurance Corporation Plc, NICON Insurance Limited and Union Registrars Limited.

The bank also joined the Corporate Affairs Commission as co-defendants to the suit.

In an ex-parte application filed by its lawyer, Mr. Kemi Pinheiro (SAN), on November 9, 2010, before Justice Mohammed Idris, the bank claimed that it granted N41.27bn credit facilities to NICON Investment, saying that the tenor of the facility was for a period of 12 months that expired on January 30, 2010.

The plaintiff also claimed that the NICON Investment Bank drew down the loan account and fully utilised it for the funding of the operations of the firms within its group including Nigeria Reinsurance and NICON Insurance.

The bank, however, claimed that the said N22.55bn debt was outstanding as at April 30, 2010, three months after the credit facilities had expired, alleging that NICON Investment had refused to liquidate the debt in spite of repeated demands.

The plaintiff also alleged that prior to the granting of the said N41.27bn credit facilities, it had also in 2008 and 2009, advanced loan facilities to Global Fleet to finance its acquisition of 51 per cent shareholding in Nigeria Reinsurance and NICON Insurance, which it claimed the Federal Government had offered for divestment in the course of privatisation of Nigeria Re and NICON.

Union Bank further alleged that Global Fleet had pledged as security for the credit facilities, its right of lien over the said 51 per cent shares of Nigeria Re and NICON.

According to the bank, by the agreement of the parties, the equitable ownership of the said shares is to remain in it until the liquidation of the facilities granted to NICON Investment vide the bank‘s offer letter dated January 28, 2009.

The bank further claimed that Ibrahim was currently the controlling officer of Nigeria Re and NICON by virtue of his nomination to the board of directors of the Nigeria re and NICON by Global Fleet as a controlling shareholder.

The bank, therefore, asked the court to restrain Global Fleet and its agents from dealing with its 51 per cent shares held in Nigeria Re and NICON ( which shares were used as security for the loan) pending the determination of the motion on notice.

Pinheiro had moved the application on November 15 while Justice Idris ordered that the court processes should be served through substituted means by advertising in one of the national newspapers.

The judge also granted the prayers of the bank on the transfer of shares and restrained Global Fleet and its agents from dealing with its 51 per cent shares held in Nigeria Re and NICON by way of selling and transferring, pending the determination of the motion on notice.

Justice Idris further restrained Nigeria Re and NICON from registering any purported transfer of Global Fleet‘s 51 per cent shares held in Nigeria Re and NICON in favour of any person other than the bank pending the determination of the motion on notice .

The court also restrained the CAC from further accepting for registration or registering any charge created over Nigeria Re and NICON‘ s assets , properties and undertakings pending the determination of motion on notice.

Justice Idris later fixed Tuesday for the hearing of the motion of notice.

 

Source: Punch