Innoson tells GTB to Convert N8.7bn judgement debt to shares

Owing to the inability of Guaranty Trust Bank (GTB) to comply with the Supreme Court’s judgement ordering it to pay N8.7 billion to Innoson Nigeria Ltd., the company has asked the bank to convert the said sum or part of it to shares for its benefit.

This was contained in a statement issued yesterday by Innoson Group’s Head of Corporate Communications, Cornel Osigwe. The company had earlier written the bank through its lawyer, Mc- Carthy Mbadugha, demanding the payment of the judgment sum and accrued interest.

In the letter dated 25th March, 2019, addressed to Managing Director of GTB, the lawyer recalled that, “On 20th December, 2010, the Federal High Court, Ibadan Division, delivered judgement in suit No. FHC/L/ CS/603/2006 between Innoson Nigeria Ltd. and Nigeria Customs Service in favour of Innoson Nigeria Ltd. in the following terms: (I) N700,200,000; (II) 22 per cent interest per annum on the said sum from commencement of action; and (III) 22 per cent interest per annum on the said sum from the date of judgement till final liquidation of judgement sum.”

It was further added that the same court, on 29th July, 2011, in a garnishee order, directed the bank to pay N2,048,737,443.67, being the principal judgement and accrued interest.

Innoson’s lawyer further noted that dissatisfied with the orders, the bank lodged several appeals up till the Supreme Court where a final decision was reached on 27th February, 2019 affirming the lower court’s judgement. Consequently, the lawyer is demanding the payment of N8.7 billion, representing judgement sum and accrued interest from GTB, to his client. However, in the statement issued by Osigwe as a follow-up to the letter, Innoson further demanded the immediate payment of the money from the bank or that in the alternative, the money should be converted to shares for its benefit.

According to Osigwe, the request was sequel to claims by the bank that paying the debt will not only affect its operations negatively, but will also erode its capital base. “Innoson Nigeria Ltd. is aware that GTB had earlier deposed to an affidavit in the court that its banking operation will be seriously and adversely affected, and also its capital base eroded if it complies with the order of the court.

“Based on the foregoing and in furtherance of the letter to GTB by counsel to Innoson Nigeria Ltd., McCarthy Mbadugha, on 25th March, 2019, that it pays the N2.4 billion judgement debt to Innoson Nigeria Ltd.

with the accrued interest of N6,717,909,849.96, Innoson Nigeria Ltd., therefore, demands from GTB that if its banking operation will be seriously and adversely affected,and its capital base eroded as a result of the N8.7 billion judgement debt, that it should, as a matter of utmost urgency, convert the said sum or part of it into shares and allot same to Innoson Nigeria Ltd,” the statement partly reads.

Osigwe further noted that in order to stop Innoson from continuing with taking over its assets in execution of the judgement, GTB approached the Federal High Court, Ibadan on Friday, 5th April 2019 and requested the court, through a motion for a stay of execution and or for an injunction restraining Innoson from continuing with executing the judgement.

According to him, the Federal High Court sitting in Ibadan refused to grant the bank an injunction to restrain Innoson from continuing to execute the judgement.