N17.8b Anchor Borrowers’ Loan Debt: Court Gives GTBank Nod To Seize Afex Commodities Exchange Assets

The Federal High Court sitting in Lagos has authorised Guaranty Trust Bank (GTBank) to temporarily take over the funds and assets of Afex Commodities Exchange following its N17,808,452,467.107 (billion) Central Bank of Nigeria (CBN) Anchor Borrowers’ Loan debt.

Justice Chukwujekwu Aneke granted GTBank an interim Global Standing Instruction (GSI) injunctive relief, following its application on May 27, 2024,

The judge made the order after hearing an ex-parte motion filed and moved by GTBank’s counsel Chief A.A. Aribisala (SAN), Ade Adedeji (SAN), with A.O. Olaleye and M.A. Aribisala.

The N17,808,452,467.107 (billion) comprises “N15,766,475,417.06 (Billion) being the amount outstanding and unpaid, as of April 17, 2024, on the loan facilities (with the accrued interest) granted by the Plaintiff to the Defendant.

“Pre-judgement interest on the N15,766,475,417.06 at the prevailing rediscount rate of 28 per cent per annum approved by the CBN from April 18, 2024, when the Plaintiff’s letter of demand dated April 17, 2024, was delivered to the Defendant until Judgment is delivered in this suit.

“Post-judgement interest on the said sum of N15,766,475,417.06” and “Cost of recovery and incidental expenses in the sum of N2,041,977,050.047.”

GTBank is the sole plaintiff/applicant in the suit marked FHC/L/CS/911/2024, Afex Commodities Exchange is the defendant/respondent, while 27 commercial banks and all money deposit banks were listed as nominal respondents.

The plaintiff averred via a 285-page affidavit deposed to by its member of staff, Ifeoma Esemudje that the tenor of the facility was nine months, intended to finance smallholder farmers registered under the CBN Anchor Borrower’s program.

The source of the repayment was to come from the sale of the Maize produced while the maturity date for the loan was April 22, 2021.

But, according to the plaintiff, the defendant did not fulfil its end of the deal.

The plaintiff, through its lawyers, then approached the court for an interim Global Standing Instruction (GSI) injunctive relief.

Our correspondent reports that the GSI, launched in July 2020, by Nigerian banks and the CBN, authorises a creditor bank to recover its debt from any or all other accounts held by the debtor with other financial institutions in case of default by the debtor.

Before GSI, borrowers who defaulted on their loans to a particular financial institution were still able to maintain their bank balances in other institutions, even if those balances were sufficient to repay their debt.

Granting GTBank’s prayer, Justice Aneke ordered a “Place a No Debit” on all monies standing to the credit of Afex Commodities Exchange as of the day the order was served on the 1st to 28th Respondent Banks.

The order included “all such monies that may be credited into the Defendant/Respondent’s account afterwards until the Defendant/Respondent’s entire indebtedness to the Plaintiff/Applicant in the sum of N17,808,452,467.107 is fully liquidated. pending the hearing and determination of the Motion on Notice filed by the Plaintiff/Applicant in this Suit.”

The judge further directed all banks in Nigeria to move/transfer all monies standing to the alleged debtor’s credit (in the said debtor’s account domiciled in any of the banks) into the debtor’s account domiciled with GTBank with Account Number 0425755319 until Afex Commodities Exchange’s “entire indebtedness to the Plaintiff/Applicant in sum of N17,808,452,467.107 is fully liquidated…”

The court also ordered the debtor to furnish it and GTBank’s lawyers, the debtor’s current statement of account, within 7 days of being served with the order.

Furthermore, Justice Aneke restrained the defendant/respondent and its agents from obstructing or interfering with GTBank’s right to enter into Afex Commodities Exchange’s 16 warehouses across seven states of the federation.

The states are the Federal Capital Territory (FCT), Oyo, Ogun, Kwara, Kano, Taraba and Benue.

It further granted a mandatory injunction commanding the defendant/respondent to allow the plaintiff to appoint its appointed agent to take over the commodities/produce stored by the defendant in the 16 warehouses across the seven states.

Lastly, the court granted an order directing the police and Civil Defence Corp to assist GTBank in securing and dealing with the commodities/produce stored by the defendant in the 16 warehouses across the seven states.

It adjourned till June 10, 2024, for hearing of the suit.