A Federal High Court in Lagos has restrained 20 commercial banks from allowing Dansa Foods and Bulk Pack Services Limited, the tow companies owned by Sani Dangote, the younger brother of business mogul, Alhaji Aliko Dangote, from withdrawing money from their accounts with them.
It also ordered the banks not to honour cheques drawn on such accounts.
The restraining order, according to the court, headed by Justice Okon Abang, will be in force till September 11, 2014 when all applications filed in a suit by Union Bank Plc against the two companies would be heard.
The banks are Access Bank, CITI, Diamond Bank, Eco Bank, Enterprise Bank, Fidelity Bank, First Bank, First City Monument Bank (FCMB), Guaranty Trust Bank (GTB), Heritage Bank, Keystone Bank, Mainstreet Bank, Skye Bank, Stanbic IBTC, Standard Chartered Bank, Sterling Bank, United Bank for Africa, UBA, Unity Bank, Wema Bank and Zenith Bank.
The judge also ordered the banks to file affidavits to show cause on the details of companies’ accounts with them within five days.
Justice Abang, however, ordered Union Bank to file an undertaking to indemnify the defendants in the event that the freezing order ought not to have been made.
“In line with Order 28 Rule 2 of the rules of this court, an interim order is hereby made, restraining the banks from allowing the defendants to operate their accounts with them, especially honouring withdrawal of funds.
“I think the dictate of justice demands that a preserving order should be made to preserve the res (subject matter) of this suit,” Justice Abang held.
Union Bank had sued the companies over alleged failure to liquidate about N5 billion debt despite repeated demands.
The bank in two separate suits against Dangote and his companies, sought for an injunction restraining the banks from allowing withdrawal of funds from their accounts pending the determination of the suit.
When the matter came up for hearing yesterday, the motion could not be heard as the defendants had filed an objection challenging the jurisdiction of the court to entertain the matter.
Diamond and Zenith appeared before the court and explained that Dangote was also indebted to them.
Zenith Bank specifically said Dangote was indebted to the bank to the tune of €7 million.
But while stating that he would entertain all the applications filed in the matter on September 11, Justice Abang said there was an urgent need to preserve the res in view of the allegation that the defendants were about to move the funds abroad.
Union Bank, in the suit, alleged that in a bid to evade payment of the loan, Dangote had been making frantic efforts to deplete the funds in the accounts of his companies, and that investigation had revealed that the defendants had started diverting the funds to Dubai in United Arab Emirate, UAE, Canada and Switzerland.
According to two separate affidavits in support of the suit deposed to by one Olufunmilola Ayoola, an official of the bank, it was alleged that the failure of the defendants to liquidate the debt had negatively affected the Nigerian economy, a development which the bank claimed necessitated the legal action.
According to Ayoola, Union Bank was having difficulty in extending credit facilities to small-scale businesses which in turn would have helped in boosting the economy and salvage the country from its present malaise of corruption and under development crisis.
The bank stated that the funds which Sani and his companies failed to pay were capable of going a long way in impacting positively on the nation’s economy.
According to the processes, the bank in September 2008, granted the defendants N5.2 billion.
The breakdown of the loan was given as follows; N500 million overdraft, N500 million advert loan, $2.5 million equipment lease, $2.5 million sales and lease back and $30 million import finance.
Ayoola recalled that when the defendants could not fulfill the promise of paying back the credit facilities from time to time, the bank approved the restructuring of the loan, but that despite that development, Dansa Foods was indebted to the bank to the tune of N4.003 billion as at November 29, 2012.
The loan was later reduced to N3.477 billion, but that despite repeated demands, the defendants failed to liquidate the debt.
Bulk Pack, on the other hand, as at date, is indebted to the bank to the tune of N745.145 million.