A Federal High Court sitting in Lagos has ordered Guaranty Trust Bank(GTB) to temporarily seize the assets of Afex Commodities Exchange over a N17.808 billion outstanding debt associated with the much-talked-about Anchor Borrowers Programme of the Central Bank of Nigeria(CBN).
Justice Chukwujekwu Aneke gave the ruling on Wednesday in an application instituted by GTBank dated May 27, 2024.
The Anchor Borrowers Program (ABP) of the CBN was established in November 2015 to create economic linkages between Small Holder Farmers (SHF) and Anchors.
GTB’s case
GTBank’s lead counsel, Chief Anthony Aribisala (SAN), sued Afex in a suit marked FHC/L/CS/911/2024 while joining 27 banks as nominal respondents.
Aribisala contended that the defendant refused to pay back the multi-billion naira loan approved by GTB for it in contravention of relevant laws enshrined in CBN guidelines and regulations.
He stated in his processes that the N17.808 billion comprises N15.766 billion being the outstanding and unpaid amount owed as of April 17, 2024, on the loan facilities (with the accrued interest) granted by the GTB to the defendant.
“Pre-judgement interest on the N15.766billion at the prevailing rediscount rate of 28% per annum approved by the CBN from April 18, 2024, when the plaintiff’s letter of demand dated April 17, 2024, was delivered to the defendant until judgment is delivered in this suit.
“Post-judgement interest on the said sum of N15.766billion and “Cost of recovery and incidental expenses in the sum of N2.041billion,” the senior lawyer argued as reported by Vanguard Newspaper.
In the plaintiff’s affidavit deposed by the bank’s staff, Ifeoma Esemudje, the tenor of the facility between GTB and Afex was stated as nine months.
The deponent added that the maturity date for the loan was April 22, 2021, but the defendant allegedly failed to fulfil its part of the loan arrangement.
The plaintiff urged the court to grant an interim Global Standing Instruction(GSI) against Afex’s funds and assets pending the final determination of the dispute.
The GSI is a financial regulation between CBN and Nigerian banks aimed at facilitating improved credit repayment culture and reducing Non-Performing Loans in the banking industry.
What the judge Ruled
Ruling on the application on Wednesday, the judge agreed with GTB’s request to impose a restriction on Afex’s financial transactions and assets in the interim.
Justice Aneke ordered a “Place a No Debit” on all monies domiciled in Afex Commodities Exchange accounts with Nigerian banks as well as any financial inflow to such accounts.
The judge held that the ruling will subsist until Afex’s “entire indebtedness to the plaintiff/applicant in the sum of N17.808billion is fully liquidated, pending the hearing and determination of the motion on notice filed by the plaintiff/applicant in this suit.”
The judge also directed all banks in Nigeria to transfer all the defendant’s monies in their account into the debtor’s account domiciled with GTBank with Account Number 0425755319.
Furthermore, the court directed the police and Civil Defence Corp to help GTBank in securing the commodities warehoused by the defendant in seven states.
The matter was subsequently adjourned to June 10, 2024, for a hearing of the substantive suit.
What you should know
Afex Commodities, as one of the anchors, received N169.27 billion from the CBN which it disbursed to 483,476 farmers cultivating 865,258 hectares of land.
The GTB is relying on litigations to reclaim its funds allegedly owed by the defendant.
Afex’s legal team will have the right to reply in the instant case before the judge can make a final pronouncement on the dispute.
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