AMCON Loses Bid to Take over Old Federal Secretariat

• Court awards N3bn damages against FG

Davidson Iriekpen

The Asset Management Corporation of Nigeria (AMCON) wednesday lost its bid to takeover the land known as the Federal Secretariat Complex, Ikoyi, Lagos, as a Federal High Court in Lagos dismissed its debt recovery suit it filed against businessman, Dr Wale Babalakin (SAN).

Justice Ibrahim Buba, in his judgment, also awarded the sum of N3 billion damages against the federal government and AMCON in favour of Babalakin for publishing his name in THISDAY Newspaper of February 5, 2016, as a First Bank’s debtor.

AMCON had dragged Babalakin and one of his companies, Resort International Limited to court in November 2012, seeking an order for the repayment of the sum of N20.5 billion comprising principal sum and accrued interest as at October 2011 on various loan facilities allegedly granted to the businessman and personally guaranteed by his company.

It is also sought an order granting it the power of sale or disposal of a parcel of land known as Alma Beach property, and the parcel of land known as the Federal Secretariat Complex, Phase 1 & 2, Ikoyi in partial or final liquidation of the debt.

AMCON also wanted the court to grant it the power of sale or disposal of all the fuel hydrant tanks situated at the Domestic Wing of the Murtala Muhammed International Airport, owned by the Ist defendant and given as security for the debt, or in the alternative, an order of the court appointing AMCON as receivers over the business and assets of Resort International Limited and Wale Babalakin for the purpose of managing same to fully realise the alleged judgment debt.

But in a counter-claim, Babalakin and his company contended that they are not indebted to AMCON but that a N4 billion facility offer to the company is an equity contribution which was wrongly classified as a loan from First Bank Plc.

They also claimed that it was not a loan that they are obligated to repay with interest and same cannot be acquired by AMCON.

They therefore asked the court to set aside the purported loan for being inconsistent with the provisions of the AMCON Act (2010) as amended and the CBN guideline for the operations of AMCON and to declare same as illegal, null and void and of no effect whatsoever.

The counter-claimants further contended that the publication of their names and that of their directors by the AMCON in the list of delinquent debtors in relation to loan facilities purportedly acquired by the 1st Defendant which are the subjects of pending suits between the counter-claimants and the defendants is unconstitutional, illegal, an infringement of the rights of the counter-claimants and an affront to the judicial powers of the court and the administration of justice system.

In his judgment, Justice Buba agreed with the arguments of the counter-claimants and dismissed the claims of the federal government and AMCON.

The court ordered the claimants (FG and AMCON) to published a full and complete retraction and apology to the counter-claimants (Babalakin and his company) in three national dailies and to forward to them a written undertaking that it will cease from publishing similar allegations

Justice Buba also ordered the federal government to comply with the terms of the arbitral award rendered on December 3, 2015 which awarded N55 billion to the counter-claimants.

The judge also held that the counter-claimants is not indebted to AMCON in the sum of N21 billion or any sum whatsoever arising from the facility purportedly acquired from Zenith Bank Plc, and First Bank of Nigeria Plc.

The court further declared that the Loan Purchase and Limited Servicing Agreement entered into between Babalakin and First Bank of Nigeria Plc on April 6, 2011, for the purported acquisition of the Loan Rights of First Bank of Nigeria Plc in the sum of N18,843,081,673. is inconsistent with the provisions of the AMCON Act 2010 (as amended) and the CBN Guidelines for the Operations of the Asset Management Corporation of Nigeria issued on November 15, 2010, and therefore illegal, null and void and of no effect whatsoever.

The court therefore set aside the Loan Purchase and Limited Servicing Agreement for being illegal, null and void and of no effect whatsoever.

Justice Buba also ordered AMCON to immediately discharge and release to Babalakin all collaterals, guarantees and assets held by it and / or any of the banks in connection with the facility and ensure the return of the original title documents in respect of such collaterals to the counter-claimant.

The collaterals ordered to be returned by the court included: leasehold interest in the Federal Secretariat Complex Phase I and II Ikoyi, Lagos, for a term of 99 years, domiciliation of proceeds from the sale of luxury apartments from the Federal Secretariat Complex Phase I and II Ikoyi, Lagos and fixed charge over Fuel Hydrant Tanks situate at the domestic wing of the Murtala Muhammed Airport, Ikeja, Lagos.