Naval Top Brass, Osunmakinde, in Trouble over Debt

What could have led Nigerian Navy top brass, Rear-Adm. Osunmakinde, into a debt of over N1 billion that has now resulted in his account being garnished?

This is the question on the lips of many, as a Federal High Court in Ikoyi, Lagos, on July 1, 2022, ordered the attachment of the sum of  N1,087,222,282.38, belonging to the former Nigerian Navy Hydrographer, his wife, Janet, and their company, Golden Giant Industries Limited, as judgment debt.

The court, in acceding to the request of the judgment creditor, also made the following orders: An order that the 25 garnishee banks joined in the suit disclose forthwith the sum outstanding belonging to the judgment debtors with the garnishee banks and that such disclosure should be made on oath and verified by an affidavit and filed before the court within 14 days from the date of service of the order; an order that the 25 garnishee banks shall appear before the court, on the next adjourned date or as may be directed by the court, to show cause (if any) why an order should not be made upon them for the amount of money due and owing or accruing from the 25 garnishee banks to the said judgment debtors or so much thereof as will satisfy the sum of N1,087,222,282.38 being the outstanding judgment debt pursuant to the judgement of this court.

Upon reading the affidavit in support of the application filed before the court, and after hearing the counsel for the judgment creditor, Opeyemi Adekoya’s move in terms of the application, the presiding judge, Justice Yellin Bogoro, granted the orders as prayed.

Ecobank Nigeria Limited alongside its two debt recovery agents, Eti Specialized Finance Company Plc, and Eti Specialised Resolution Company had dragged Osunmakinde, his wife, Janet, and their company, Golden Giant Industries Limited, before the court to recover the debt.

The plaintiffs are also demanding interest on the said sum at the rate of six per cent from September 30, 2021, until judgment is delivered and, thereafter, at the rate of 10 per cent till the liquidation of the judgment debt.

 However, the defendants, in a motion on notice dated January 20, 2022, filed before the court, accused Ecobank of deliberately master-minding the manipulations of the company’s account to throw him into toxic debt and create an advantage for its debt recovery agents to take over his account.

The defendants stated further that contrary to the refinancing plan and the intervention purpose of the Federal Republic of Nigeria to revive ailing industries in Nigeria through the Central Bank of Nigeria/Bank of Industry Intervention Fund, Ecobank took the bulk of the fund released through them, deducted and held onto the sum of N292 million out of the N450 million which was released by the Bank of Industry.

The plaintiffs, in a suit filed before the court, through their counsel, Adekoya, alleged that sometime in 1997, Golden Giant Industries Limited applied for foreign input facility (FIF), a Nexim facility of N50 million through the defunct Hallmark Bank Limited, which was granted via its offer letter dated January 1997.

The bank stated that securities for the said facility of N50 million include Chattel Mortgage, over equipment and machinery of the company at EPZ Calabar, joint and personal guarantee of principal promoter/director for N50 million supported by the notarized statement of personal worth and the Deed of Chattel Mortgage dated August 26, 1998.

In an affidavit deposed to by Banke Ibitoye, a recovery manager in the service of the Eti specialised finance company, Ecobank stated that, in 2003, the company applied to Hallmark Bank Plc for an increase in overdraft and finance facilities, which Hallmark Bank Limited granted via its letter of offer and acceptance dated October 14, 2003, leaving a total balance of N212,931,020.03.

It stated further that the Golden Giant Industries company again in 2004, applied to Hallmark Bank for an overdraft facility of N270 million, which Hallmark granted via its letter of offer and acceptance dated September 17, 2004.

In 2005, the company applied to Hallmark Bank Plc for N389,900,688.93 credit facility which Hallmark Bank Limited granted via its letter of offer and acceptance dated April 29, 2005, which was duly accepted and utilised.

The bank added that the dynamics of the credit facilities granted to the company require that the company ensured that cash flow from the company business operations is domiciled in the company’s account in Ecobank to make repayment of outstanding obligations on the facilities.

Ecobank stated that contrary to the dynamics of the transaction, the cash flow from the company’s business operations was not domiciled in the company’s account in Ecobank, as a result of which the company is now heavily indebted to the plaintiffs.

The plaintiffs stated that in a demand letter dated November 18, 2016, it requested the company to pay the concession amount as a full and final settlement of his outstanding indebtedness within six months from the date of the said letter, but the company refused to pay the said concession sum.

However, in their response, the defendants stated that contrary to the disposition made by Banke Ibitoye, the company has started paying and is still paying directly to Nexim Bank to date.

The company stated that the only letter of offer and acceptance it acknowledged was the one dated January 30, 1997, and that it made various payments to Nexim Bank and Hallmark Bank, which records and statements were not part of the processes filed before the court by the plaintiffs.

The defendants added that prior to the time their properties were sold and payment made to Ecobank, they did not hear from Hallmark Bank for more than a period of two years until Ecobank contacted them that they had bought over its account from Hallmark Bank.

They stated that they were not part of the processes that led to the said take-over nor were they contacted for reconciliation or to ascertain the amount they are owing Hallmark Bank.

Since Hallmark Bank has not been functioning, they started looking for other opportunities to finance their business through other avenues, including the Federal Government Textile intervention fund through the Central Bank.

The company stated that in May 2010, it initiated a discussion with Ecobank, but instead of applying on behalf of the company for the Textile Intervention Fund through the CBN/BOI, Ecobank offered to refinance the alleged debt it owed through the Central Bank of Nigeria/Bank of Industry Intervention Fund for the manufacturing sector.

The company collected only a meagre sum of N22 million out of the said N450 million grant by the CBN to run the business, which was released in trickles after several applications and pleadings.

Consequently, the purpose of the said Central Bank of Nigeria/Bank of Industry Intervention Fund for the manufacturing sector to enable him to revive his business was completely scuttled and defeated by Ecobank and its debt recovery agent.

After the submission and adoption of written addresses of the two parties, Bogoro, in his judgment held that “In all, I find that the affidavit filed by the defendants does not disclose any defect on the merit and from the facts deposed thereto. I have not seen any conflict or serious triable issues to warrant this matter being transferred to the general cause list. For this reason, I enter judgment for the plaintiffs against the defendants.

“Judgment is hereby entered for the plaintiffs against the defendants jointly. The defendants shall jointly and severally pay the sum of N1,087,272,282.38 as of September 30, 2021, being the outstanding balance of the indebtedness of the Golden Giant Industries Limited to the plaintiff arising from the credit facility granted to the company and guaranteed by a retired naval officer and his wife. And the interest on the said sum as at the rate of 6% per annum from September 30, 2021, until judgment is given and; thereafter, at the rate of 10% till the liquidation of the judgment debt.”