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Banking Practices, Financial Crimes and The GTB, EFCC and INNOSON Case - Observations


Thursday, December 21, 2017   11.08AM / Victor Olowogorioye 

After reading through many versions of the GTB/EFCC/INNOSON saga, I came up with the following facts:
1. That Innoson is a valuable customer of GTB.

2. That Innoson had Import Finance Facility Line, IFF Line with GTB to import spares parts with the spare parts imported serving as collateral for the IFF which means that the imported spare parts' ownership resides with GTB vide the shipping documents which is Bill of Lading in this case.

3. That GTB agreed to release the ownership of the spare parts to Innoson upon the payment of 25% of the value of the imports to enable Innoson make sales and payoff the balance of 75% and interest thereon.

4. That Innoson forged the signatures of some GTB Staff on a copy of the Bill of Lading which allowed it to clear the imported spare parts without paying the agreed 25% of the value, thereby taking the control of the process from GTB in a fraudulent and criminal manner.

5. That Innoson thereafter refused to repay the loan which now began to attract interest at 22%, default charges and all manner charges outside the agreed terms as Nigerian Banks are noted for in such instance.

6. That GTB pressurised for the repayment of the loan and the charges thereon from Innoson.

7. That Innoson claimed that there are excess charges on its account and the employment of forensic auditors was agreed by both parties to verify the claim.

8. That both GTB and Innoson agreed to sum around N559m as excess charges to be net off from the total indebtedness.

9. That while Innoson requested that the agreed refund sum of N559m should attract interest at the rate of 22% which it pays for its loans with the Bank, GTB only agreed to pay at 7% (which possibly could be its average cost of funds or deposit).

10. That the disagreement on the rate the refund should attract led to Court action.

11. That the High Court ruled in favour of Innoson and ordered GTB to pay N4.7b to Innoson being the excess charges and the interest thereon at 22%.

12. That GTB appealed the judgment but failed with the Appeal Court now asking GTB to pay N8b to Innoson as interest keeps mounting.

13. That GTB has now made the final appeal to the Supreme Court and the final judgment on the issue is now pending.

Now, my personal opinion:
1. That GTB has realised that it is unlikely to win the appeal at the Supreme Court with the possibility of the judgment debt rising as a result of accumulated interest which is material to it. Remember it rose from N4.7b at the High Court to N8b at the Court of Appeal.

2. That as a result of the realisation of the (1) above, GTB decided to pursue the CRIMINAL aspect of the matter as the case before the Supreme is largely CIVIL.

3. That the focus on the criminal aspect which necessitated the involvement of EFCC was to force Innoson to the negotiation table in view of the likelihood of winning the case before the Supreme Court.

4. That EFCC should have treated the MD of Innoson with more decorum giving the fact of his economic importance and being a National Honors holder of OFR notwithstanding the offensive circumstances it faced in the course of the arrest.

I believe that the EFCC has a duly procured warrant of arrest to effect the arrest but the arrest should have been better managed.

5. That serious criminal actions can be established in way and manner Innoson cleared its goods.


7. That both civil and criminal aspects of the case are different. 

8. That while Innoson will win the civil case, the criminal aspect remains its albatross.

9. That both GTB and Innoson need to sit down and harmonise the civil and criminal aspects of the case in the spirit of give and take.

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