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GTB drags Babalakin, others to court over N12.3bn debt

Category: Frauds & Scandals


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GTB drags Babalakin, others to court over N12.3bn debt

 

By Tony Amokeodo   Monday, 11 Oct 2010     


A commercial bank, Guaranty Trust Bank Plc, has filed a legal action before a Federal High Court in Lagos against a construction firm, Stabilini Visinoni Limited, Roygate Properties Limited, Resort International Limited and Homan Engineering and their promoter, Dr. Wale Babalakin (SAN), over an alleged N12.3bn debt.


In three separate suits filed by its lawyer, Mr Kunle Ogunba (SAN), GTB is asking the court to compel the defendants to pay the said N12.3bn debt, being the outstanding balance of some credit facilities it allegedly extended to them some years back.The bank is also seeking an order compelling the defendants to pay interest on the said sum at 30 per cent from November 30 till judgment is delivered and thereafter at 10 per cent until final liquidation of the judgment sum.


GTB had further claimed in a supporting affidavit that its decision to use legal action was informed by the defendants‘ alleged refusal to repay their alleged debt in spite of repeated demands.The bank had also in a separate application, urged the court to transfer the case to its undefended list on the grounds that the defendants had allegdly failed to honour its several demands to settle the said debt and refused to respond to the writ of summons filed.


The plaintiff had alleged that it granted various credit facilities to Roygate Properties between October 8, 2007 and December 15, 2008, saying that the loans were of specific tenors and subject to the firm‘s ability to abide by the terms stipulated in the various offer letters.The bank also claimed that Roygate utilised the said loans in accordance with terms contained in the offer letters and the instruments executed in the bank‘s favour.


GTB further alleged that in spite of the fact that Babalakin allegedly executed legal mortgage, corporate and personal guarantee to indemnify the plaintiff in the event of any default on the facility, the acceptance segment of the deal was signed by him in his capacity as alter ego of the firms.The bank further alleged that being a custodian of third party/stakeholders funds, its reputation had been negatively affected as a result of the defendants‘ continued indebtedness.


According to the GTB, the defendants are in a position to repay the loan, saying that their refusal has exposed it to the scrutiny of the regulatory authorities such as the Central Bank of Nigeria.But in an interlocutory ruling in June and upon an application by the plaintiff, the court restrained Roygate Properties and its agents from operating and withdrawing from its funds in any Nigerian bank under any guise, pending the determination of the case.


It also restrained Stabilini Visinoni and its agent from tampering with any of its fixed and movable assets in the country until the case was decided.But Babalakin and other defendants had challenged the court‘s jurisdiction to entertain the suit and urged the court to strike out the suit on the grounds that the plaintiff had never at any point in time before the writ of summons was issued, sought the leave of the court to issue the said writ.


They also argued that the bank had rather sought the court‘s leave to mark and place the case in the undefended list.The defendants further claimed that the writ failed to comply with the provisions of the court‘s Civil Procedure Rules 2009 which requires that, leave of court must be obtained before a writ of summons may be issued and marked for hearing on the undefended list.The defendants added that the plaintiff‘s alleged failure to first obtain the court‘s leave rendered the suit incompetent.


They also argued that the suit should be struck out on the grounds that by the agreement between parties, the tenor of the loan would be 48 months.The defendants further urged the court to hold that the plaintiff lacks locus standi to file the suit, saying that the case is an abuse of court process.


http://www.proshareng.com/investors/company.php?ref=GUARANTY


Source:Punch



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