Breaking entry, Seplat debt debacle


Oluchi Chibuzor tries to unravel the raging debtor / creditor case between Seplat Petroleum Growth Firm, an indigenous oil firm, and Entry Financial institution, explaining {that a} seemingly easy situation is compounded by one of many events

It has usually been argued that it isn’t a criminal offense to borrow cash from banks to develop companies, however the issue is refusing to repay the mortgage. That is the guts of the dispute between Seplat Petroleum Growth Firm and Entry Financial institution. Certainly, the sums distributed within the type of loans are funds / investments of depositors which shouldn’t be allowed to drip.

To sum up, the substance of the present case is that Seplat owes Entry Financial institution Plc over $ 85.8 million and that it’s unwilling to pay or erect roadblocks in any solution to prolong or stop the financial institution to get well its funds.

Actually, the mortgage to the oil firm, a transaction that was carried out below the chairmanship of Dr Ambrose Orjiako, was carried out by the defunct Diamond Financial institution whose belongings and liabilities Entry Financial institution inherited in 2019 after its acquisition of the financial institution. .
Earlier than the bubble burst, Diamond Financial institution was one of the crucial talked about success tales in banking, however unhealthy money owed, just like the one presently in dispute, noticed it run out of steam till Entry Financial institution involves the rescue by buying it.

Nonetheless, whereas Orjiako doesn’t dispute that his firm owed Diamond Financial institution and by extension Entry Financial institution after the acquisition, his argument is that it was not Seplat that took the mortgage immediately, although, because the paperwork present. , the cash was used for the good thing about Seplat.

Rising info

Whereas it’s now clear that Cardinal Drilling Providers Ltd took the mortgage and used it to amass 4 rigs for the good thing about Seplat, the oil firm and its homeowners have criticized the debt assortment procedures as company harassment, a place that has been described as an try to fire up undeserved public sentiment.

Particularly, the financial institution obtained the power from the defunct financial institution to buy CDS Rigs 101, 201, 202 and 203 and was secured by a set and floating debenture on the belongings of Cardinal which was used to offer drilling providers to Seplat.
For years, in spite of everything efforts to get well the estimated $ 86 million mortgage have been aborted, Entry Financial institution lastly approached the court docket, claiming that there was a business-to-business relationship between Seplat and Cardinal Drilling and that they have been collectively promoted by Orjiako.

Kalu Nwosu, who reportedly issued a private assure and a private fairness assertion as collateral for the services made out there to Seplat, additionally joined the criticism filed by Entry Financial institution.
Entry Financial institution’s argument is that Seplat has solely benefited from all the advantages of the services granted to Cardinal Drilling for the promotion and development of its actions, claiming that the oil firm is the actual debtor whereas Cardinal is simply ‘a smokescreen for acquiring the credit score facility.

On December of final 12 months, exactly on the twentieth, a Federal Excessive Court docket approved a receiver / supervisor, Messrs. Kunle Ogunba & Co, to implement an ex parte request asking Entry Financial institution Plc to take over Seplat’s head workplace at 16A Temple Highway, Ikoyi, Lagos.

The financial institution additional requested the court docket to validate the appointment of Kunle Ogunba & Associates as receiver / supervisor; validate the ability of the receiver / supervisor to take possession of the 4 Cardinal platforms and different belongings of individuals and corporations seemingly associated to the Cardinal drilling; stop all defendants from disposing or managing the belongings; and declare that the defendants don’t have any proper to amass or take care of any of the belongings.

Seplat subsequently utilized to the Court docket of Enchantment which dominated in his favor by ordering the fast suspension of the injunction and the interlocutory injunction which allowed Entry Financial institution to seal the property of Seplat and management its accounts.
The court docket additionally ordered Seplat to execute a financial institution assure with a good financial institution within the nation for $ 20 million.
However what can’t be disputed, in accordance with these within the know, is that Orjiako, together with its worldwide companions, collectively owns round $ 45 million of fairness in Cardinal Drilling Providers.

Other than that, Entry Financial institution insisted that Seplat has at all times disclosed in its interim and annual studies that Cardinal Drilling is a associated social gathering, which significantly contradicts the substance of its refusal.

Seplat’s assault on Entry Financial institution’s lawyer

In the meantime, the efforts of Entry Financial institution Plc’s legal professional, Mr. Adekunle Ogunba (SAN), to meet his skilled obligations with the financial institution aggravated the defaulting oil firm, which led to to a petition from Seplat.
The lead lawyer denounced Seplat’s resolution to take him to the Authorized Practitioners Privileges Committee (LPPC) and the Authorized Practitioners Disciplinary Committee (LPDC) of the Nigerian Bar Affiliation (NBA) for alleged critical misconduct and practices opposite to the legislation. ‘ethics.

Ogunba argued that the alleged petition in opposition to him was geared toward creating all types of roadblocks that will delay fee of the oil firm’s debt to Entry Financial institution Plc.
Ogunba knowledgeable the oil firm that quite than embarking on a wild goose hunt, it ought to certainly start the method of liquidating its monumental monetary obligation to the financial institution.

Insisting that the tried blackmail and intimidation won’t work, the senior lawyer famous that he was merely fulfilling his duties to his shopper within the lawsuit between the 2 firms.
“Clearly the petition (if any) is an try to blackmail me and keep away from Seplat’s big debt fee to Entry Financial institution Plc and nothing extra.

“Seplat is best off taking steps to liquidate its debt quite than making an attempt to intimidate me, a lawyer who is simply doing my homework as such. As soon as once more, I reiterate the truth that the petition has not been formally dropped at my consideration for a proper response, ”he stated.
He expressed shock at being focused by the oil firm quite than coping with the problems at stake, asking Seplat to deal with the deserves of the matter, quite than making an attempt to hunt him down.

“It is the enterprise of those big debtors to hawk petitions in every single place in an effort to keep away from paying their money owed. I used to be not there after they borrowed the funds they usually clearly focused me for dangerous worth quite than taking motion to liquidate the debt.
“This specific debt was a part of the large debt overhang that sank the now defunct Diamond Financial institution they usually do not thoughts if Entry Financial institution goes bankrupt for them too,” he famous.

Paperwork present Seplat used Cardinal to safe a mortgage

In line with paperwork filed in court docket by the financial institution by means of its legal professional, Ogunba, it’s evident that Cardinal Drilling is a subsidiary of Seplat.
Nonetheless, Seplat argued that Entry Financial institution couldn’t maintain it chargeable for a mortgage obtained by a 3rd social gathering (Cardinal Drilling) and criticized Ogunba’s declare that Seplat had employed Cardinal Drilling as a “ firm display screen ” to acquire the set up.

However opposite to Seplat’s assertion that no documentary data was offered to help the declare, the findings of court docket proceedings filed by Entry Financial institution confirmed that the plaintiff had offered proof that Seplat benefited from the mortgage.
After Cardinal Drilling obtained the mortgage and disbursed it, the corporate transferred the duty to Seplat, as proven within the firm’s account assertion, which Entry Financial institution offered to the court docket.
The financial institution has contact particulars for Seplat transferring funds to Cardinal Drilling’s account, which in flip would switch them to Diamond Financial institution (which was later acquired by Entry Financial institution), as a mortgage compensation.

For the financial institution, Seplat is the actual debtor, which is why the financial institution and its attorneys joined Seplat within the debt assortment process, obtained and executed the order in opposition to it, which is now the topic of ‘attraction.
Sources near the financial institution say that as a substitute of repaying the mortgage by Seplat, there may be an try to tarnish Ogunba’s picture by writing a petition in opposition to him, insisting it’s based mostly on a choice. Decide Aikawa, who, regardless of the objections of Seplat’s attorneys, granted Ogunba’s request.
The petition in opposition to Ogunba was drafted even earlier than the ruling on Seplat’s request to revoke Decide Aikawa’s order was made.

Seplat’s petition was filed on December 18, 2020 whereas Decide Aikawa rendered his ruling on December 24, 2020.
Regardless of the indigenous oil firm’s insistence that it was not an confederate, the findings of court docket proceedings filed by Entry Financial institution confirmed that the plaintiff had offered proof that Seplat benefited from the mortgage, with Cardinal Drilling passing by. the duty to Seplat after having obtained the mortgage and having disbursed it. .

The corporate’s account assertion, which Entry Financial institution offered to the court docket, comprises particulars of the switch of funds by Seplat to the Cardinal Drilling account, which in flip would switch them to Diamond Financial institution (which was later acquired by Entry Financial institution), as a mortgage compensation.
Entry insists that Seplat is the actual debtor, which is why the financial institution and its attorneys joined Seplat within the debt assortment lawsuit, obtained and executed the order in opposition to it.

Entry Financial institution desires Seplat’s attorneys punished

As a part of its efforts, Entry Financial institution Plc additionally wrote the Regulation Practitioner Privileges Committee (LPPC) and Regulation Practitioner Self-discipline Committee (LPDC), demanding the sanction of Mr. Babajide Koku (SAN) in addition to by Etigwe Uwa (SAN). , each attorneys of Seplat, for alleged skilled misconduct in dealing with the dispute between the 2 firms.

Within the petition in opposition to Koku and Uwa, the financial institution stated the 2 senior attorneys engaged in acts unbecoming of authorized practitioners and violated well-established authorized rules in unhealthy religion.
In letters to the 2 our bodies, Entry financial institution accused Koku “of getting aided and inspired the engagement of his shopper in acts opposite to well-established authorized rules and illegalities, all in unhealthy religion to forestall his purchasers to meet their company tasks ”.

The financial institution additional argued that the lead counsel “engaged in acts which have been intentionally to impede, delay and finally have an effect on the administration of justice.”
He stated the written e mail conveying the execution of the Court docket of Enchantment’s order to the financial institution was crammed with errors, insisting that regardless of the errors contained, Koku didn’t instantly notify his shopper, Orjiako, to chorus from asking his firm Seplat to make these deceptive statements.

“It’s related to state that the keep of the interlocutory injunction must be secured by a financial institution assure issued in favor of the deputy chief clerk of the Court docket of Enchantment in accordance with the court docket ruling,” the financial institution stated.

Because of this many observers take into account the dispute between Seplat and Entry Financial institution to be completely pointless. They really feel that the large quantity spent on litigation and unwarranted media ought to have been used to barter the mortgage.

“As a substitute of going forwards and backwards, Seplat ought to provide a compensation plan for its obligations. You may’t borrow cash from depositors after which go to court docket for cover after you fail to repay. The 20 million {dollars} deposited with the Chief Registrar of the Court docket to ensure the discharge of their belongings ought to have been quite a place to begin to repay this debt, ”stated a public affairs analyst.

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