Why Osigwe Food and Agro Company Sued Unity Bank for N8.3b

Why Osigwe Food and Agro Company Sued Unity Bank for N8.3b

Thursday, January 6, 2022 11:29 am

Unity Bank

By Akin Kuponiyi

In a renewed legal battle via an amended statement of claim ordered by a Federal high court in Lagos, Osigwe Food and Agro-Industrial Company Limited has slammed an N8.3billion suit on Unity Bank Plc.
In an amended statement of claim filed before the court by a Lagos lawyer, Chief Paul Omoijiade, the company Osigwe Food and Agro-industrial company maintained a current account with Unity bank Plc. The company was incorporated under the laws of Nigeria with a registered office at number 196 Iju,-Road Agege. It commenced operation in 2008 with an ultra-modern factory for the production of instant noodles under the brand name UNO Instant Noddle.

The company alleged that the bank booked the following facilities against the company in the course of their banking relationship,
I. Term loan of N328 million on 12th February 2009
ii. Term loan of N1Billion on 27th July 2010.
iii. Existing Term Loan from N478 million to N1Billion on 16th August 2010.
The company avered further that the decline in her production and sales in 2009 adversely affected her working capital which constrained her capacity to meet up with the obligation of the bank and other creditors.
In order to shore up her working capital, the company in 2010 applied for N2.6billion Central Bank of Nigeria intervention fund at 7% interest repayable in 15years. It was for use to restructure and refinance her facilities with the bank, Union Bank and Eco Bank.
The N1 Billion was an intervention fund by CBN-Bank of Industry, given by the Federal Government of Nigeria through CBN-BOI to the Company. That is, to pay off the previous indebtedness of Unity Bank. The balance should be restructured for 15 years at 7% to enable the company to produce and create employment. The bank disbursed N686million out of N1billion approved and without notice and justification reversed the CBN/BOI Intervention loan. It sold the debt to the Assets Management Corporation of Nigeria (AMCON).
The company wrote the bank on the 19th September 2013 on the wrong amount on her account and the premature sale to AMCON.
AMCON in its letter written to the company stated that the facilities sold to her was N 721,400,000. The company disputed the above debt sold to AMCON and consequently in 2015 contracted an Audit firm to review and reconcile the accounts.
The review of the accounts revealed the following.
1. Excess interest charges N14,714,834
2. Excess processing management Restructuring and Commitment fees N11,549,333
Total N26,264,168.
Meetings were held between the plaintiff, the bank, AMCON and the auditors in respect of the excess charges and sale of the over-bloated Account to AMCON. They had no impact in rectifying the mishap nor did the bank produce the statement of accounts as requested.
Consequently, the company referred the matter to the Central Bank of Nigeria Consumer Protection Department
On the 15th of August 2017, Unity bank wrote a letter to the Central Bank of Nigeria that she credited the company’s account on the 22nd of April,2015 with the sum of N4,490,666.67 and that they reviewed the company’s letter of complaint and that the company was not entitled to further refund from Unity Bank.
The company alleged further that despite its several and strenuous demands for its statement of account from Unity bank, it failed and refused to make the statement available to her. Rather, it unilaterally debited its account without mandate with unauthorized entries

Thus, the plaintiff is claiming the following from Unity Bank Plc:
An order of the court that the bank pay to the company the sum of N3,317,797,,501.00 being and representing special damages for the bank’s breach of contract.
The order of the court that the sum of N5billion is paid as damages for breach of duty of care by the bank to the company.
An order of the court compelling the bank to write a letter of apology to the company for mismanaging its account in line with the monetary policy of the Central Bank till liquidation.
An order of the court for 10% interest per annum on the judgement sum from the date of judgement debt is paid.


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