IMO STATE AND ARBITRARY USE OF EXCESS CRUDE ACCOUNT TO OBTAIN N10 BN LOAN

Imo used Excess Crude Account to obtain N10 billion loan – Zenith Bank tells court

5th May 2019

Zenith Bank Plc has told a High Court of the Federal Capital Territory (FCT) how on January 24, 2016, the Imo State government used its Excess Crude Account facility to obtained a loan of N10 billion from the bank whose repayment plan spreads across 240 mon

The information was contained in an affidavit to show cause in garnishee proceedings deposed to by Solomon Unamka.

The bank deposed to the fact that “the judgment debtor Imo State governor’ is highly indebted to the 3rd garnishee to the sum of N9.4b as it has a credit facility from the 3rd garnishee of the sum of N10b.

“That the balance in the above stated Account No 3700236696, cannot be attached because the 3rd garnishee has right of set off on the said account.”

Another bank, Access Bank Nig, Plc told the court that although the Imo State government operates some accounts with the bank,  the balances in those account  were abysmally negligible.

However, 14 out of the 17 banks cited in the garnishee proceedings before the court had denied maintaining accounts on behalf of the state.

The banks were ordered by the court to show cause why the accounts operated by the Imo government should not be made absolute.

The positions by the banks were contained in their respective respondents filed before the court in a suit filed by E.F. Network Nig Ltd and Mr. Gideon Egbuchulam against them and the Imo state government.

Also cited as judgment debtors are the Environmental Transformation Committee (Imo Entraco) and The Ministry of Environment.

The judgment creditors, E.F. Network Nig Ltd and Mr. Gideon Egbuchulam on April 17, approached the court with an ex parte motion praying it to compel 17 banks allegedly overseeing Imo State government accounts to effect the payment.

Justice Bello Kawu, went ahead to grant the prayer by directing the listed banks to show caused why the order should not be made absolute.

The affected banks are Central Bank of Nigeria (CBN), Access Bank Plc, Zenith Bank Plc, Jaiz Bank, Union Bank Plc, United Bank for Africa (UBA), First Bank Plc, Ecobank Plc, Keystone Bank Plc, and Diamond Bank Plc.

The rest are Fidelity Bank Plc, Polaris Bank Plc, GTBank Plc, Stanbic IBTC Bank Plc, Unity Bank Plc, Heritage Bank Plc, and FCMB Bank Plc.

The Supreme Court had in March affirmed the judgment of the Court of Appeal Owerri, which ordered the state defendants to pay the N1 billion contract debt owed the judgment creditors.

The apex court held that the appeal filed by the Imo State government and Gov. Rochas Okorocha challenging the judgment of the lower court was not meritorious.

Meanwhile, the Central Bank of Nigeria (CBN) said it was not in a position to effect the order of the court since it only had administrative supervisory powers over banks.

Mr Ahmed Abdullahi, counsel for the CBN in this respondent brief said that the apex bank did not maintain accounts in the name of the judgment debtor.

He further said the bank had such powers to track funds due to the state government in the consolidate revenue fund of Imo State. Abdullahi also argued that the bank did not part take in the actual sharing of funds to state from the Federation Account.

He further said the CBN as a public officer required the consent of the Attorney-General of the Federation to act on legal matters, adding that processes served on the bank did indicate consent was sought.

Abdullahi therefore, prayed the court to vacate the order and discharge the bank in the interest of justice.

However, the respondent’s brief filed by the Zenith Bank Plc indicated that the state government maintained an account with it, but that the account was used to obtain N10 billion loan from the bank 2016 and spread across 240 months.

Similarly, Access Bank Nig, Plc in its response, agreed to oversee a number of the judgment debtor’s account but that the balances in those accounts were abysmally negligible, adding that they were no recent transactions on the accounts.

Agbonlahor, while speaking on the responses filed by the Access bank, said the bank’s testimony was incorrect.

“Access Bank today filed a return denying the existence of the account numbers we had tracked belonged to the judgment debtors.

“This denial goes contrary to the letter of the prayers that contained specific account numbers maintained by the judgment debtors with the bank.

“The act of concealing of existing accounts on the part of the bank is a despicable action capable of making it to incur liabilities of the judgment debtors.

“We have evidence that one of the account numbers we mentioned had been used to pay salaries of workers in Imo State last month through the intervention of the EFCC.

“It is therefore an embarrassment to the bank for it to deny the existence of any accounts belonging to Imo State government.

“Whether this will be the beginning of charges bordering on perjury against the deponent, only time will tell,’’ Agbonlahor said.

However, Chief M.O Nlemedim (SAN), Imo State, Attorney-General filed a motion on notice seeking the termination of the garnishee proceedings for want of competence.

He is asking the court for an order restraining the judgment creditors, agents, representatives or the garnishee banks from relying on the said garnishee order pending the determination of the motion.

The state is also seeking the setting aside of the garnishee order made on April 17 in a motion mark: FCT/HC/5309/2019, for allegedly being an abuse of court process.

 Justice Bello Kawu therefore, fixed June 25 for continuation of hearing on the matter.