Court freezes Sani Dangote’s account

Posted by admin Headlines Thursday, September 4th, 2014

THE Federal High Court sitting in Lagos yesterday ordered 20 commercial banks in Nigeria to dishonour any withdrawal cheque from Sani Dangote, younger brother of Africa’s richest man, Alhaji Aliko Dangote and his companies, Dansa Foods Limited and Bulk Pack Services Limited.

The presiding judge, Justice Okon Abang, gave the order while presiding over a case brought against Dangote by Union Bank Plc.

Union Bank had dragged him and his companies to court over alleged refusal to pay up the N5.2bn loan granted his company since September 2008.

The bank, through its counsel, Mr. Chukwudi Enebeli had filed the suits praying for an order of mareva injunction to restrain all the defendants’ banks in Nigeria- Access, CITI, Diamond, Ecobank, Enterprise, Fidelity, Keystone, Mainstreet, Skye, Wema, Heritage, Sterling, Unity, Zenith Banks, First Bank, First City Monument Bank, Guaranty Trust Bank, Stanbic IBTC, Standard Chartered Bank and United Bank for Africa – from allowing Mr. Sani Dangote and his companies to withdraw funds from their accounts pending the determination of the suits.

Justice Abang further directed that the restraining order must be in force until September 11, 2014 when all applications instituted in the suit brought by Union Bank against younger Dangote would be heard.

Justice Abang also instructed the banks to show cause on the details of Dangote’s accounts with them within five days.

The banks include: Access, CITI, Diamond, Ecobank, Enterprise, Fidelity, First Bank, First City Monument Bank (FCMB), Guaranty Trust Bank (GTB), Heritage, Keystone, Mainstreet, Skye Bank, Stanbic IBTC, Standard Chartered Bank, Sterling, United Bank for Africa (UBA), Unity, Wema and Zenith bank.

However, the court ordered Union Bank to file an undertaking to indemnify the defendants in the event that the freezing order ought not to have been made.

According to Justice Abang, “In line with Order 28 rule 2 of the rules of this court, an interim order is hereby made restraining the banks from allowing the defendants to operative their accounts with them especially honouring withdrawal of funds.

“I think the dictate of justice demands that a preserving order should be made to preserve the res (subject matter) of this suit.”

It would be recalled that Union Bank had filed a suit against Dangote and his companies over alleged failure to liquidate about N5 billion debt despite repeated demands.

Specifically, Union Bank, in two separate suits against Dangote and his companies, had asked the court for an order of mareva injunction restraining all commercial banks in Nigeria from allowing withdrawal of funds from their accounts pending the determination of the suits.

When the matter came up for hearing, the motion was stalled based on the defendants’ objection in an application filed to challenge the jurisdiction of the court to entertain the suit.

Of all the banks, only Diamond and Zenith appeared before the judge to explain that Dangote was equally indebted to them.

During proceedings, Zenith Bank told the court that Dangote was indebted to it to the tune of €7 million.

Justice Abang therefore, said he would hear all the applications filed in the matter on September 11, 2014 and insisted that there was an urgent need to preserve the res in view of the allegation that the defendants were about to move the funds abroad.

Union Bank in its suits insisted that in a bid to evade payment of the loan, Sani has been making frantic efforts to deplete the funds in the accounts of his companies, and that investigation had revealed that the defendants had started diverting the funds to Dubai in United Arab Emirates (UAE), Canada and Switzerland.

The financial institution in its two separate affidavits in support of the suits deposed to by one Olufunmilola Ayoola, an official of the bank, equally alleged that the failure of the defendants to liquidate what it termed the monumental debt, had negatively affected the Nigerian economy, a development which the bank claimed necessitated the suits.

Ayoola stated further that the bank was having difficulty in extending credit facilities to small scale businesses which in turn would have helped in boosting the nation’s economy and salvage the country from its present malaise of corruption and under development.

Union Bank argued further that the funds that Sani and his companies failed to pay were capable of going a long way in impacting positively on the nation’s economy.

The bank said in September 2008, granted the defendants N5.2 billion, with the breakdown given as follows: N500 million overdraft, N500 million advert loan, $2.5 million equipment lease, $2.5 million sales and lease back and $30 million import finance.

However, Ayoola recalled that when Sani and his companies could not fulfill the promise of paying back the credit facilities from time to time, the bank approved the restructuring of the loan, but that despite that development, Dansa Foods was indebted to the bank to the tune of N4.003 billion as at November 29, 2012.

He added that the loan was later reduced to N3.477 billion, but that despite repeated demands, the defendants failed to liquidate the debt.

Bulk Pack, on the other hand is indebted to the bank to the tune of N745.145 million
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