Monday, February 6, 2023

N32 billion Debt: Innoson seeks to stop GTB’s transmutation

GTB obtained an ex parte order to change its legal status, a move Innoson says is done to evade the payment of N32.8 billion judgement debt the bank owed it.

• July 13, 2021
CEO of Innoson Vehicle Manufacturing, Chief Innocent Ifediaso Chukwuma and Guaranty Trust Bank
CEO of Innoson Vehicle Manufacturing, Chief Innocent Ifediaso Chukwuma and Guaranty Trust Bank

Innoson Nigeria Limited, a Nigerian manufacturer of vehicles, has asked the Lagos Division of the Federal High Court to set aside an order permitting Guaranty Trust Bank (GTB) to transmute into Guaranty Trust Holding Company amidst debt owed the company.

After securing judgment debt of N8.2 billion against GTB in 2014, the bank is yet to pay the sum as directed by the court which has accumulated over the years with interest amounting to the sum of N32.8 billion.

GTB PLC had sought to change its legal status from a public limited liability company to a holding company (HOLDCO) and had been granted approval by the Central Bank of Nigeria after obtaining an Ex Parte order from another court to proceed with the registration on June 16, 2021.

Counsel to the plaintiff, Chukwuebuka Okolo, brought before the court, a motion on notice, seeking an order of court to discharge the ex-parte order granted to Guaranty Trust Bank PLC on June 16, 2021 and to “set aside every step the bank took pursuant to the said ex-parte order.”

Mr Okolo also prayed the court to “stay further recognition of Guaranty Trust Bank Holding Company as a financial or non-financial company and or as a legal entity.”

The transmutation of GTB PLC will make it difficult for Innoson to claim the debt as the bank will exit from the Nigerian Stock Exchange.

In a statement by Cornel Osigwe, innoson group’s head of corporate communication and affairs, GTB is alleged to have refused to pay the judgement money.

“It is unfortunate that GTB has refused to pay over N32 billion judgment debt to Innoson Nig Ltd. arising from suit Nos: FHC/L/Cs/603/2006 and No. FHC/Cs/139/2012 respectively,” Mr Osigwe said.

“It is interesting to state that no court in Nigeria has set aside the decisions of these judgment debts against GTB even though GTB has appealed both decisions even to the Supreme Court; rather the decisions have been affirmed by the appellate courts in Appeal Nos.CA/I/258/2011, SC.694/2014, and in CA/E/288/2013 in which till date GTB has refused to obey the Court of Appeal’s order that it pay the judgment debt subject of this particular appeal into an interest-yielding account,” he added.

Mr Osigwe in his statement described the move by GTB PLC as an abuse of court process and prayed the court to set it aside.

“GTB, in an abuse of court process obtained an ex parte order from the Federal High Court, Lagos Judicial Division on 16th of June 2021 to proceed with the registration of GTB HOLDCO beam despite its knowing that an application for injunctive orders by Innoson Nig Ltd in Suit No: FHC/EN/CS/161/2020 is at all material time pending in FHC Enugu Division to restrain it from transmuting to a Private and or a Financial Holding Company until it pays over N32 billion judgment debt it owed Innoson.

“While the case in the Enugu Division of Federal High Court is still pending, GTB against its corporate governance rules and in a classical abuse of court process filed and got an ex-parte order from Federal High Court, Lagos Division and without disclosing to the court that the subject matter of its application is already subjudice because injunctive orders have been sought in Suit No: FHC/EN/CS/161/2020, as well as the subject matter of this pending in the Enugu Division of Federal High Court, to restrain GTB from proceeding with the said scheme both in a pending interlocutory and in the substantive suit already served on GTB and they have filed a memorandum of appearance and other processes in the suit,” the statement said.

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