Oil Marketer Sues Zenith Bank Over N6.4bn Illegal Charges

An independent oil marketer, Olusola Anthony Adejugbe and his company, Tonique Oil Services Limited, have instituted a N6, 441, 369, 617.73 billion suit against Zenith Bank Plc, before Federal High Court, Lagos, over what they described as excessive and illegal charges.

He also stated that a forensic accounting firm was engaged to scrutinize and analyse his company’s account and it was then discovered that between August 2006 and December 2013, excess interest and charges on the company by Zenith Bank Plc as accumulated to N1, 842, 471, 801. 99.

Adejugbe further stated that by a letter dated February 19, 2008, Zenith Bank granted his Company commercial paper facility of N2,568,644,276.09 to finance the purchase of 30,000MT of Petroleum products, but N2,501,270,000 was credited into the company’s account.

He however stated that instead of Zenith Bank financing the purchase of 30,000MT of Petroleum products for the company as per letter of offer the entire sum of N2, 501, 270 billion was diverted by the bank for the purchase of its own shares during the bank’s initial public offer, a conduct that is unethical, unprofessional and reprehensive.

He also added that out of the sum of N104,363,212.03 assessed as dividends payable on the bank’s shares only N42,173,498.43 million was credited into the company’s account leaving outstanding balance of N62,169,713.60. He added that the bank’s shares purportedly bought by his Company with the facilities granted by Zenith bank were managed by the bank so much that the bank eventually liquidated the shares after the value has nose dived and depreciated.

He also stated that another activity on his Company’s current account with the bank was the sale and purchase of a property in Port Harcourt that belonged to one of the shareholders/customers of the bank who needed to clean up some of his obligations to the bank. And that it was the bank who introduce his company  to the shareholders 50,000 square meters of land out of which the company bought 20,000 square meters for the purpose of expanding its business earnings.

He averred that to facilitate the purchase of the land, Zenith bank offered the company a term loan of N500,000 and it was part of understanding of the company and the bank that after the purchase of the land, the bank will finance the company’s Tank farms to be built thereon.

He further stated that after the purchase of the land, the bank took possession of the title documents of the land as collateral while reneged on the promise and understanding to finance his Company’s tank farm on the land and that since 2008 the land had been under the management of the bank and the same had been lying fallow.

In this circumstance, the plaintiffs contended that Tonique Oil Company is not indebted to the bank and any alleged indebtedness could only have arisen as a result of the unconciousable and illegal acts of the bank’s officials in debiting the company’s account with astronomical spurious interest charges,consequently the plaintiffs also contended that such interest charges are illegal in that they contravene the Central Bank of Nigeria Monetary Credit and Foreign Exchange/Trade guidelines.

The plaintiffs financial consultant computed other charges that were passed into the account of the company,  base on relevant policy circulars, guide to bank charges of Central bank of Nigeria  and discovered that  the bank excessively overcharged the company on interest on overdraft, COT, and VAT on COT, Management Fees, upcountry transfer fees, interest on commercial paper, foreign exchange purchases and letter of credits.

Consequently, the plaintiffs are contending that they are not indebted to the bank rather the bank has overcharged the plaintiffs to several billions of Naira.

They also urging the court to declare that Zenith Bank being a bank within the supervisions and control of CBN cannot charge interest on any facilities granted to them beyond the official approved policy rate of the Central bank of Nigeria.

They are also urged the court not only to restrain Zenith Bank from selling their property pledged as securities for the loan but to also compel it to pay his company the sum of ₦6, 441, 369, 617.73 billion, being the total excess charges debited into the company’s account by the bank and interest on the same amount at the rate of 21% per annum from the date of judgement of the court until final liquidation.

But Zenith Bank in its further statement of defence with statement on oath sworn to by Senior Assistant Manager internal control and Audit Department of Zenith bank Mr Vincent Ohanugo, the bank denied almost all the company’s claim and stated that the company was granted several loans which include: ₦2.5 billion regular commercial paper; $36 million import finance facility; $6, 648 million commercial paper/usance facility; $9million import finance facility via usance facility and $11million short term import facility of ₦500 million.

The bank also stated further that there was no understanding entered it and company that is to finance the construction of tank farm for the company. The plaintiffs assertion that they are no longer indebted to the bank is a bare denial and therefore challenges the plaintiffs to provide evidence of payment of all the credit facilities availed to them by the bank.

Zenith bank also states that the plaintiffs suit does not disclose any cause of actions against the bank as they are still indebted to the bank in the sum of N8, 464, 176, 356.52 as at January 31, 2013, it therefore urged the court to dismiss the suit as been frivolous, vexatious,as it amounts to abuse of the process of the Court.