There is a low-burning, long-running spat in corporate Nigeria that is astonishing in both its breadth and all-encompassing for its potential implications on how business is conducted in Nigeria

In 2015, Honeywell petitioned the Bankers’ Committee, Sub-committee on Ethics & Professionalism for its intervention. The sub-committee ruled that the ₦3.5 billion agreement reached between Ecobank and Honeywell was a “full and final settlement” of Honeywell’s indebtedness to Ecobank and was valid. This was ratified by the Bankers’ Committee in June of that year. In flagrant disregard of the committee’s ruling, the bank continued to threaten the companies, even taking the extraordinary step to obtain an ex parte order effectively impacting the day-to-day operations of these entities (the order was ruled to have been wrongfully procured and the bank’s lawyers censured). The companies then asked the Federal High Court to decide whether or not they were still indebted to the bank. The final judgment in 2019 was in favour of the companies. Subsequently, Ecobank filed an appeal and won at the Court of Appeal in December 2020.  The Supreme Court was always going to weigh in on this matter and in its verdict, it mystifyingly held amongst other things that the negotiations between the companies and Ecobank were inconclusive and there was no final agreement for a payment plan therefore, the companies remain indebted to the bank. Crucially, the court was silent on the final amount of the supposed debt commitment. Attempts at resolving the impasse have stalled in part because Ecobank is now demanding an eye-watering and yet-to-be substantiated ₦13.5 billion.

Ecobank’s unusually abrasive behaviour holds far more important implications than just trying to shake down a large conglomerate and its most important shareholder for a large pile of cash. Three are worth discussing in this piece. The first is the hit that this long-running saga has dealt on a wider perception of our capital markets. While not a major development in the overall scheme of things: inflation, corporate earnings reports, monetary policy, credit ratings, debt sustainability and wider macroeconomic health still weigh heavily on the mind of investors, this development will certainly not have helped.

Ikemesit Effiong wrote this originally for The Cable