Come tomorrow, the hallowed chamber of a Federal High Court, Lagos, will be the theatre of legal fireworks between Access Bank Plc and the... African Petroleum Plc (AP).
While Access Bank is seeking an order to wind up the giant oil marketing company over a $35.15 million (N5.6 billion) trade debt, AP is accusing the bank of erecting a stumbling block on its repayment bid.
In a petition signed by Mr. Olisa Agbakoba (SAN), lodged before the court and dated June 25, Access Bank anchored its position on AP’s alleged inability to repay the two-year old facility on the grounds that the company is ‘’insolvent and unable to pay’’.
Specifically, the bank told the court that since its repeated demands for the repayment of the $35,153,822.15 debt, being the outstanding obligation on a letter of credit opened on July 18 last year in favour of AP, could not yield any positive result,the order seeking to wind up the company therefore became inevitable.
In the petition, the bank painted the alleged refusal of the oil marketing company and concluded that AP could not repay the loan because ‘’the company is insolvent’’.
It, however urged Mr .Justice Ibrahim Auta to invoke the court’s jurisdictional powers under Section 409 (a) of the Companies and Allied Matters Act to wind up AP.
Agbakoba said: ‘’AP is indebted to the petitioner (Access Bank) in the sum of US$35,153,822.15, being the outstanding obligation on the letter of credit opened in favour of the company on July 18, 2008 to facilitate the importation of petroleum products.
“On December 17, 2007, your petitioner granted and AP accepted a US$100m facility in form of a trade finance line. The facility was for a tenor of one year with each transaction within the facility to have a specified tenor to a maximum tenor of 90 days.
“In consideration of the trade finance line, the company gave a negative pledge in favour of the petitioner dated December 21, 2007, pledging not to create any liability on its assets without the consent of your petitioner.
“AP utilised the trade finance line by requesting a letter of credit (LC) of US$ 35,153,822.15 to be opened on its behalf. The LC was established and booked on July 18, 2008 and matured on December 1, 2008, being the next working day after actual date of November 30, 2008.
“Upon maturity of LC, the AP was unable to settle the LC obligation of US$35,153,822.15 which is still outstanding as at the presentation of this petition.
“Since the LC obligation became due, the petitioner made several attempts to get AP to settle its LC obligation through letters dated January 2, 2009, March 2 and 26, 2009 and May 25, 2009, being the final demand, requesting the company to fund its naira account with the naira value for the amount due.
“Despite the various correspondences, calling on AP to settle its LC obligation, the company failed to act accordingly by settling the amount due.
“The petitioner wrote the letter of demand , dated May 25, 2009 to AP for payment of its debt pursuant to Section 409 (a) of the Companies and Allied Matters Act but the company has failed and neglected to pay the same without any justifiable reasons.’’
Therefore, he urged the court to wind up AP on the grounds that the marketing oil company “has become insolvent.”
“The company is insolvent and unable to pay its debts. In the circumstances, it is just and equitable that the company should be wound up. We humbly pray for an order winding up African Petroleum Plc under the provisions of the Companies and Allied Matters Act for its inability to pay the sum of US$35,153,822.15 , being the cumulative debt owed by the company’’.
But AP said yesterday that as much as it was ready to repay the loan, it was opposed to Access Bank’s tactic to fleece it.
According to its Chief Operating Officer (COO), Mr Tunde Falasinnu, whereas AP opened a letter of credit after submitting a form ‘M’ at the official rate of N116.62 to a dollar, Access Bank wants the repayment at N127 to a dollar which was the black market rate.
Falasinnu said following a disagreement over the rate, the Central Bank of Nigeria (CBN) intervened, asking the bank to explain the rate differential.
However, the CBN involvement at the insistence of AP, Falasinnu said, infuriated Access Bank which threatened to go to court even when it was yet to provide any satisfactory answer to the apex bank’s question.
Accusing Access Bank of trying to rip-off his company to the tune of N400 million, Falasinnu said AP would pay even at N127 to a dollar “if the CBN endorses the rate.”
A letter of protest to CBN’s Director of Banking Supervision jointly signed by Falasinnu and the Executive Director, Finance/IT, M.S.C. Aviomoh, reads: “We write to formally protest about the unacceptable action of Access Bank Plc on foreign exchange transaction with African Petroleum Plc.
“We opened an account with Access Bank Plc in 2007. They availed us a $50m facility on May 12, 2008 for the purpose of importing petroleum products through a letter of credit.
“On July 25, 2008 ,a letter of credit was opened in favour of Glencore Energy UK Ltd on our behalf by Access Bank Plc. The receiving bank – BNP - Paribas SA. Amount on the letter of credit $38,973,000. The actual amount negotiated and paid was $35,153,822.15 as contained in the commercial invoice dated August 5, 2008 by Glencore Energy UK Ltd.
“On December 2, 2008, Access Bank Plc advised us through a Debit Note dated December 1, 2008 that our account has been debited with N4,464,535,413.05, being naira value of $35,153,822.15 at N127 per dollar.
“We objected to this rate and informed them of the official rate of N116.62 by the Central Bank as at that date through our letter dated December 2, 2008.
“The bank has done four other letters of credit before this disputed one. The letters of credit were paid according to normal documentary credit through the CBN Bid Options. Copies of the letter of Credit, Form M, Commercial Invoice and Debit to our account in October 2008 for the same product financed are attached.
“The request of the bank for us to pay them in foreign currency (US$) is inappropriate for the following reasons:
•The Form M and the Proforma Invoice were used to open a letter of credit for the import.
•The suppliers have been paid using the Central Bank of Nigeria fund at the rate as at November 2008 or earlier.
•Using the same forms to purchase foreign exchange will amount to round tripping, an offence we will not like to associate our company with.
“On the strength of the above, we hereby appeal to the Central Bank of Nigeria, being the regulatory body in matters of this nature, to adjudicate in the interest of equity and fairness’’.