N17bn Debt: GTBank Files Contempt Charge Against 13 Banks, 60 Bank Chiefs

The Federal High Court sitting in Lagos will on Thursday, June 20, 2024, begin hearing contempt proceedings filed by Guaranty Trust Bank, GTBank against 13 banks and 60 of their executives in a suit to recover a N17 billion Anchor Borrowers Programme loan from Afex Commodity Exchange.

Justice Chukwujekwu Aneke made the order on June 11, 2020, after hearing GTB’s counsel Ade Adedeji (SAN) with A.О. Olaleye Esq move a motion ex parte in Suit FHC/L/CS/911/2024.

The judge directed GTB to serve the banks by substituted service through advertisements in The Nation, Punch and This Day newspapers.

The 13 banks cited for contempt are Access Bank, Citibank, Jaiz Bank, Union Bank, Fidelity Bank, First Bank of Nigeria Plc, First City Monument Bank, NDIC (liquidator for Heritage Bank), Polaris Bank, Stanbic IBTC Bank, Standard Chartered Bank, Taj Bank, United Bank for Africa and Zenith Bank alongside its principal officers.

The bank chiefs affected by the proceedings include chairmen, MDs, directors, company secretaries and the liquidator of Heritage Bank (Nigeria Deposit Insurance Corporation).

According to the motion they are at risk of jail for allegedly failing to implement a May 27, 2024, No-Debit-Order reportedly placed on the accounts of Afex Commodity Exchange with the banks.

Justice Aneke held: “After hearing Ade Adedeji SAN with A.О. Olaleye Esq of counsel for the plaintiff moved in terms of the motion paper and having carefully considered the application and submission of counsel.

“It is hereby ordered as follows: (1) That an order is hereby made granting leave to the plaintiff/applicant to serve Form 48 (Notice of Consequences of Disobedience to Order of Court) dated 11th June 2024 and all other forms and processes that may be issued in this contempt proceedings inclusive of Form 49 on the 1st-60th parties cited for contempt.

“That the suit is hereby adjourned to the 20th day of June 2024 for hearing of the contempt proceedings.
In the May 27, 2024 ruling, 20 banks were directed to transfer monies standing to the credit of the respondent into the AFEX’s account with GTB until the N17.81bn is fully repaid.

The N17.81bn loans comprise N15.77bn; the amount outstanding and unpaid, as of April 17, 2024, and the cost of recovery and incidental expenses in the sum of N2.04bn.

The court also granted an injunction allowing GTB to take over AFEX 16 warehouses located across seven states and sell the commodities stored in them, which it said were procured with the Central Bank of Nigeria Anchor Borrowers’ loan facility.

Earlier in the month, the court had served contempt proceedings against AFEX and some of its principal officers including Ayodele Balogun, Jendayi Fraaser, Justin Topilow, Mobolaji Adeoye and Koonal Ghandi.

The plaintiffs averred that AFEX sourced the Anchor Borrowers Programme Loan facility from GTB to provide finance for smallholder farmers registered under the CBN Anchor Borrower’s programme.

The loan was expected to be repaid from the sale of commodities. However, AFEX failed to uphold its end of the deal even after an extension.