Zenith Bank Inserted N18B Illegal Charges On Stallion Group Account–Vaswani

* Logo source: Investors king

 

…Denies N23B Indebtedness

 

 

Story By Gbenga Ogunbufunmi

 

As the rift between Zenith Bank PLC and Stallion Group of companies over alleged indebtedness of  N23, 388, 188, 756. 049 billion owed by  the conglomerate to the bank deepens,  the key promoter of the conglomerate, Mr Sunil Vaswani while denying the indebtedness,  has alleged the  manipulation of his companies’ account by Zenith Bank PLC  to the tune of N18, 369, 960  billion in excess and illegal charges.

He said the alleged illegality and fraud were committed on Stallion Group accounts through unauthorised and unlawful interests charges, illegal  management fees, COT-VAT fees, finance charges and LC charges.

Vaswani  position was  contained in the counter affidavit he filed in opposition to the originating summons filed by Zenith Bank Plc asking for an order of the court entering judgment against the defendant (Vaswani)  in the sum of N23, 388,188, 765. 49 billion,  being his  outstanding indebtedness on account of the guarantee given by  Vaswani in respect of various sum advanced to Stallion Nigerian Limited which has remained unpaid as at 12th May  2020 in spite of repeated demands.

In the counter affidavit deposed to by Stallion Group’s Director of Administration, Mr. Tajudeen Olalere, filed and argued by his counsel, Mr. Uchenna Njoku, Vaswani denied any indebtedness  to Zenith Bank and urged the court to dismiss the suit instituted by the bank for been false, unfounded, unsubstantiated, unjust and unwarranted and an  abuse of court process.

Vaswani in the counter affidavit averred that haven noticed the inexplicable refusal of Zenith Bank to have account reconciliation exercise,  Stallion suspicious  that  Zenith Bank might have  been manipulating its accounts  decided to undertake the  audit of its accounts with the bank  beginning from the year 2012.

The defendant said  to Stallion’s utter chagrin, it was discovered through the audit  that the bank had charged illegal, unauthorised and unlawful interests, management fees, COT-VAT fees, finance charges and LC charges to the tune of N18, 369, 960 billion.

He further averred that  Zenith Bank’s allegations and contentions of being owed the sum of N23, 388, 188, 765.49 billion, as at May 12, 2020 by Stallion are false, adding that the entire false package of allegations of indebtedness put together by  the bank are part of a deliberate stratagy to humiliate Stallion and Mr. Vaswani and terrorise them into backing down from their legitimate demand  that there should be a reconciliation of all the accounts of Stallion in the bank or a third patty audit of the accounts of Stallion with the claimant.

Vaswani, who denied any indebtedness of Stallion Group  to Zenith Bank, said  that contrary to the false claims by the bank, Stallion has not only repaid its debt to the bank,  but has overpaid the bank by several billions of naira for which cause Stallion has been calling for account reconciliation or third party auditing of its accounts in Zenith Bank.

It would be recalled that Zenith Bank Plc has dragged the Chairman Chief Executive Officer of Stallion Groups of  Companies, Mr. Sunil Vaswani before an Igbosere High Court  Lagos,  over alleged unpaid N23, 388, 188, 756. 049 billion debt.

Zenith Bank in the suit marked LD/3945GCMW/2020, filed against Mr. Vaswani was filed due to his alleged failure or refusal to pay the alleged debt despite several and repeated demands.

The  Zenith Bank Plc through its lawyer, Mr. Kemi Balogun (SAN), who leads Chidozie Ndukwe, Babatunde Olanipekun and five others is asking for an order of the court entering judgment in the sum of N23, 388,188, 765. 49 billion  against Vaswani, being his outstanding indebtedness  on account of the guarantee given in respect of various sum advanced to Stallion Nigerian Limited which has remained unpaid as at 12th May  2020 in spite of repeated demands.

The bank is also seeking for a declaration that having regard to the clear and unambiguous provisions of the Deeds of Personal Guarantee and the statement of net-worth executed by  Vaswani in its favour over the facilities advanced to Stallion Nigeria Limited, who has failed together with the defendant upon several and repeated demands to liquidate the debt that has arisen there from, it is entitled to judgment against the defendant in the sum of N23, 388,188, 765. 049 billion, being  Vaswani’s outstanding indebtedness to it, as at  May 12, 2020, and interest at the rate awarded by the court from the date of judgment until final liquidation of the said sum.

The bank further asked the court for an order vesting in it, all the rights attached to Vaswani’s assets, landed properties and all other forms of real estate wherever located within the Federal Republic of Nigeria, the United States of America, United Arab Emirates, particularly and not limited to the properties known as L9, Lailak Street, Emirates Hills, Emirates Living, the United Kingdom, particularly and not limited to the property known as 40, Avenue Road, London, NWH 8 6H5, and all countries of the European Union (EU), and any other jurisdictions worldwide.

Zenith Bank is also claiming right over  all forms of stock of shares in the equity of any company or investment, cash deposits, bonds, wholly or jointly held investments in any Financial Scheme; all forms of negotiable instruments in all commercial banks, Discount Houses, Mortgage Banks. Merchants Banks, Savings and Loans, and all financial institutions located within the Federal Republic of Nigeria, United States of America, United Arab Emirates, particularly and not limited to the sums of money contained in accounts domiciled with Rak Bank of Rak Operations Center, Emirates Road, Ras Al Khaimah in the United Arab Emirates (UAE) and Emirates NBD Bank of Baniyas Road, Deira, Opposite Dubai Creek Tower, Next to Dubai Chamber, the United Kingdom, particularly and not limited to sums of money contained in accounts domiciled with Barclays Bank of 2, Churchill Pl, Canary Wharf, London E14 5R8, HSBC Bank of 8, Canada Square in Canary Wharf, London and Standard Chartered Bank 1, Basinghall Avenue, London, ECZV SOD, and all other countries of the European Union (EU) and any other jurisdictions worldwide until the sum N23, 388,188, 765. 49 billion, owed by the Mr. Vaswani to the bank, on account of the guarantee on the unpaid credit facilities obtained by Stallion Nigeria Limited from the claimant together with accrued interest thereon as at of May 12, 2020, is fully realised.

The bank also want the court to declare that being an unsatisfied creditor in the sum of N23, 388,188, 765. 49 billion, is entitled to an order of perpetual injunction restraining the defendant from selling, alienating, disposing, transferring any interest in all landed properties and other forms of real estate in the name of the Defendant; cash deposits, bonds, all forms of stock of shares in the equity of any company or investment and all forms of investments wholly or partly held in any Financial Scheme in Mr. Vaswani’s name, all forms of negotiable instruments in all Commercial Banks, Discount Houses, Mortgage Banks, Merchant Banks, and all financial institutions acquired in his name wherever located within the Federal Republic of Nigeria, the United States of America, United Arab Emirates, particularly and not limited to sums of money contained in accounts domiciled with Rak Bank of Rak Operations Center, Emirates Road, Ras Al Khaimah in the United Arab Emirates (UAE) and Emirates NBD Bank of Baniyas Road, Deira, Opposite Dubai Creek Tower, Next to Dubai Chamber, the United Kingdom, particularly and not limited to sums of money contained in accounts domiciled with Barclays Bank of 2, Churchill Pl, Canary Wharf, London E14 5R8, HSBC Bank of 8, Canada Square in Canary Wharf, London and Standard Chartered Bank 1, Basinghall Avenue, London, EC2V SDD, and all Countries of the European Union (EU) and other jurisdictions worldwide, until the sum of N23, 388,188, 765. 49 billion, owed by Mr. Vaswani, as at May 12, 2020 is fully satisfied

Zenith Bank Plc in an affidavit deposed to by one of its Principal Officers, Tochukwu Amakor, averred that its a banker of value to Stallion Nigeria Limited, located at 270, Ajose  Adeogun Street, Victoria Island, Lagos, that Vaswani is the alter ego and Chief Promoter/Chief Executive Officer and the personal guarantor of all the various facilities availed Stallion Nigeria Limited.

Explaining the circumstances leading to the alleged debt, the claimant stated that upon Stallion’s  request, Zenith Bank via a duly executed offer letter dated April 30, 2014 availed Stallion two types of facilities, namely facility one of a Short term import facility (STIF) in the sum of N14.5 billion (Fourteen Billion, Five Hundred Million Naira) with funding ratio of 100% by the bank.

The claimant added that despite the clear terms of the agreement between Stallion and the bank and the great latitude which also culminated into several restructured facilities availed Stallion, Mr. Vaswani failed, refused and or neglected to meet its due obligations as they fell due and allowed its account to always be in the negative region.

Consequently, on the account of the Personal Guarantee executed by Mr. Vaswani, the bank wrote to him vide a letters dated May 24 and 30 2017.

The deponent also stated that in accordance with his bank’s transparency standard, which is in line with the international best practices, the bank had on several occasions commissioned its internal forensic investigation team to carry out a forensic audit of Stallion’s accounts with it.

“The team, after the exercise, found out that Stallion is indebted to the claimant in terms of a colossal sum in excess of N20.25 billon as at January 2020,  and that when it became apparent that Stallion was not willing to make good its default especially having regard to the tone of its letter dated December 31, 2019, the bank wrote a final demand letter dated January 16, 2020 to Stallion calling for the immediate liquidation of Stallion’s indebtedness which stood in the sum of N20.25 Billion as at the said date.’

It further averred  that as a fact, when the  bank discovered that Stallion and Mr. Vaswani would stop at nothing to cause economic ruins to its business, and further expose it to regulatory sanctions from the Central Bank of Nigeria, the bank was constrained to call in the securities used as collateral for the huge facilities availed Stallion  including the personal guarantee of the Defendant.

” The facilities availed Stallion had since expired and become due for payment, but contrary to the terms of the Personal Guarantee  executed by  Vaswani in favour of the bank, the defendant  till date failed, refused and or neglected to liquidate the facilities.

However, in the counter affidavit sworn to by Tajudeen it averred that Vaswani only became aware of the existence of this suit and the Mareva Order made on June, 17, 2020 upon a search conducted at the Registry of the Court on July 8 2020, by his counsel pursuant to an  incomplete disclosure of the existence of this suit by  Zenith Bank Plc in a counter-affidavit the bank served on Stallion on July 7, 2020 in Suit No FHC/L/CS/113/2020 Between Stallion Nigeria Limited Vs Zenith Bank Plc pending before  Justice Obiozor of the Federal High Court, Lagos Judicial Division.

Vaswani  further averred that Zenith Bank’s sinister motive is more revealed by the fact that prior to filing this action, Zenith Bank has been and remains a defendant in an action filed, by Stallion against the claimant in Suit No FHC/L/CS/113/2020 Between Stallion Nigeria Limited vs Zenith Bank Plc. And that the action is still pending at the Federal High Court, Lagos, before Justice China  Obiozor

On the issue of indebtedness, Vaswani stated that in compliance with its obligations, Stallion made payments in liquidation of the various facilities and enjoyed a mutually beneficial relationship with the bank, adding that a substantial part of the facility advanced by  Zenith Bank was to cover various Letters of Credit, with a covenant to convert the facility which was denominated in Dollars to Naira within 180 days of the facilities.

The defendant stated that his spirited efforts at amicable resolution of the situation created by the exploitative and high- handed disposition of the Zenith Bank, Stallion held discussions with the bank and its solicitors sometime in August 2017, whereat Stallion, without conceding any indebtedness as claimed by the bank, offered to make a good faith payment of N4.6 billion subject to reconciliation of its accounts.

It was also stated that as a  follow up on the offer referred to above, Stallion has since then made lodgments of N4, 290, 428, 878 billion, being cash lodgments and proceeds of the sale of its Shares in the bank  prior to and as at November 14, 2019.

Vaswani also averred  that Stallion also made supplies of vehicles to the bank without receiving payment up to the value of N1,544, 159,999.96 billion and that Stallion also secure a purchaser for its property at Plot No 11 14, Adeola Odeku Street, Victoria Island, Lagos  for the sum of N3.5 billion,  but Zenith Bank failed and neglected to give an approval for the sale until the offer from the buyer lapsed.

The defendant added  that Stallion further requested for account reconciliation exercise or 3rd party audit of its accounts,  but that Zenith Bank refused till date, adding that despite the payments made by Stallion, Zenith Bank continued to maintain without justification, that Stallion was indebted to it, an allegation Stallion has since denied and repeatedly asked for a reconciliation of the accounts.

He stated that the action of Zenith Bank by moving from one court to the other amounts to forum shopping and an abuse of  court process, adding that since Stallion is not indebted to the bank, all the securities pledged for the facility and the Guarantee sought to be enforced herein have been discharged.

Meanwhile, Justice Oyekan-Abdullahi after hearing various applications filed by the parties on Thursday, said the date for ruling on the objection on marava injunction earlier granted will be communicated to the parties.

The  trial judge after adjourning the matter for ruling, advised counsel to both parties to explore the possibility of Alternative Dispute Resolution (ADR)  in the interest of continuity of business relationship.

Justice Oyekan – Abdulahi said that it would serve the interest of both parties better if they can reach a mutual resolution of the dispute and continue with their business relationship.

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