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N2.8bn litigation: Wema Bank petitions EFCC

Category: Investors NewsBeat

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N2.8bn litigation: Wema Bank petitions EFCC

Friday, 18 June 2010

Wema Bank Nigeria Plc has petitioned the Economic and Financial Crimes Commission (EFCC) over a litigation in which a lawyer, Mr Mogbeyi Sagay, is praying the court to compel the bank’s management to pay him N2.8 billion on behalf of a defunct firm, Auto Import.

According to a copy of the petition, Wema Bank inherited the case from the defunct National Bank of Nigeria, after it took over the latter.The bank, in the petition, noted that the National Bank had issued a bank guarantee to Auto Import on behalf of one of its clients, Continental Motors and Engineering Company, to supply motor vehicles and spare parts, a deal the firm defaulted.

Although the bank had paid part of its liability, a balance of $1,700,000 still remained.After a series of legal battles, Mr Sagay, who is the counsel for Auto Import, commenced a Garnishee proceedings at a Lagos high court, demanding a sum of $15,350,967, which he prayed should be paid to him.In a Garnishee proceedings, the judgment sum is paid directly to the judgment creditor and not to the counsel.

Following investigations by the Lagos Chambers of Commerce and Industry, the legal adviser to the Wema Bank and an officer of the Independent Corrupt Practices and Other Related Offences Commission (ICPC) to the effect that Auto Import, a Romania company, had seized to exist, the bank’s solicitor filed in application to subpoena a certain Lupu Nicolae, whom sagay claimed was the general manager of the non-existing firm.

The application, was, however, refused, prompting an appeal which was still pending.The court, in May 2008, gave a Garnishee Order Absolute that the bank should pay N2.8 billion to the judgment creditor/garnishor, though the creditor’s solicitor had asked that the money be paid to him.

It was also gathered that the Central Bank of Nigeria (CBN) had appealed the ruling of the court on the Garnishee Order and the appeal was still pending.Wema Bank, in the petition, raised the alarm that the judgment creditor had commenced contempt proceedings against the CBN for not giving effect to the Garnishee Order Absolute.


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