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AP Faults Access Bank Over $35m Debt

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The Chief Operating Officer of African Petroleum Plc (AP), Mr. Tunde Falasinnu, has faulted Access Bank Plc,s request that the petroleum marketing firm be wound up for failure to pay debt of about $35 million.
According to a newspaper advertorial, Access Bank has told a Federal High Court sitting in Lagos that AP is insolvent hence it could not pay the $35 million debt.
The bank has therefore asked the company be wound up.
However, Falasinnu said at a press briefing on Monday that AP has refused to pay because the bank was requesting for the debt to be paid in dollars and at black market rate.
He said that the debt arose from facility by the bank to finance the importation of petroleum products.
He explained that pursuant to financing of the vessel, AP opened a form M with at the Central Bank of Nigeria (CBN) and letter of credit was opened at the rate of N116 to a United States dollar.
He added that trouble started when Access Bank on December 2, 2008 sent a debit advice, saying the money should be paid using an exchange rate of N127 to a dollar.
He said AP objected to the rate and petitioned the CBN, saying the company was willing to adhere to the final decision of the apex bank on the issue.
,,We are still awaiting the decision of CBN on the matter before we saw the advertorial requesting for the winding up of the company. The request sounds very ridiculous. We cannot just allow ourselves to be cheated because if we pay that amount, the bank is ripping us off to the tune of N440 million in just one transaction,,, he said.
The AP boss said that the company has never denied owing Access Bank, ,,but consider the demand inappropriate since it will amount to round tripping to use the same documents to purchase foreign exchange from the CBN.,,
He said that AP made this position known to the Access Bank via a letter dated June 3, 2009. He said that said the action of the bank might have ulterior motives.
In its petition to Director, Banking Supervision Department, CBN, dated May 15, 2009, AP had explained that, ,,We opened an account with Access Bank in 2007. They availed us a $50 million facility on May 12, 2008 for the purpose of importing petroleum products through letter of credit.
On July 25, 2008 a letter of credit was opened in favor of Glencore Energy UK Limited on our behalf by Access Bank. 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 2008 by Glencore Energy.
On December 2nd December 2008, Access Bank advised through a debit note dated 1st December that our account has been debited with N4,464,353,413.05 being the Naira value of $35,153,822.15 at N126/$.
We objected to this rate and informed them of the official rate of N116.67 by CBN as at that date through our letter dated 2nd December 2008.
The bank has done four LCs before this disputed one. The LCs were paid according to normal documentary credit through the CBN bid options.,,
AP told the CBN that the request by the Access Bank to pay them in foreign currency is inappropriate for following reasons: The Form M and Proforma Invoice were use to open a LC for the import; the suppliers have been paid using the CBN fund at the rate as at November 2008 or earlier; using the same forms to purchase Forex will amount to round tripping, an offence the company said it will not associate itself with.
(Source: Daily Independent)
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