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FirstBank Nigeria battles Arisekola Alao’s company over N8.5 billion debt.
FirstBank Nigeria battles Arisekola Alao’s company over N8.5 billion debt – As reported by financialwatchngr, In bid to recover a debt of N8,856,570,029.81 from Lister Flour Mills Nigeria limited a company promoted and predominantly owned by Ibadan-based businessman, Alhaji Arisekola Alao, who died on 18 June 2014, First Bank of Nigeria Limited has refiled a suit against two directors of the company, Mrs Khadijah Alao -Straub, Mr Ismail Alao and a sister company, Lister Oil limited.
The suit which was filed pursuant to order of a Federal High Court in Lagos, south west Nigeria, was filed before the court by a Lagos lawyer, Barrister Olamide Balogun on 10 October.
In a statement of claim accompanied with statement of witness on oath of account officer in classified Asset Management Department of First Bank, Mr Ololade lawrence, it was alleged that Mrs Kahadijah Alao-Straub acting as director alongside the other erstwhile directors of Lister Flour Mills of Nigeria, obtained various credit facilities which she personally guaranteed from First Bank Nigeria Limited, while Lister Oil Limited guaranteed the repayment of the loan.
Between 24 January 2011 and November 2013, First Bank granted the following credit facilities to Lister Flour Mills Nigeria Limited with its operating office at 21 Creek Road, Apapa Lagos as a customer.
The sum of N2.5 billion for the purpose of supporting the civil construction of proposed biscuit manufacturing factory belonging to Lister Confectionery Nigeria limited at Ibadan, the importation and installation of 600MT production plant for Lister Flour Mills Limited and the interest capitalization of the loan.
The sum of N3.5 billion for the purpose of supporting the importation and installation of five biscuit production lines in respect of the proposed biscuit manufacturing factory belonging to Lister Confectionery Nigeria Limited.
A term loan in the sum of N80 million for the restructuring of the expired temporary overdraft facility in the sum of N80 million as part of existing facilities at an interest rate of 18 percent per annum and a restructured term loan in the sum of N150 million.
First Bank Nigeria Limited aver that the facilities granted Lister Flour Mills now in receivership were duly accepted and fully utilized as Mrs Khadijah Alao-Straub and other erstwhile directors then acting on behalf of the company made a full draw down on all the facilities.
The loans were secured by a pefect deed of Mortgage debenture dated 23rd of October, 2002 over the company’s undertaking,goodwill and assets which include the entire parcel of land lying at Idiroko Olomoyoyo, Ibadan -Ijebu-Ode Road, Ibadan, Oyo stste containing area of approximately 31 acres.
Various deed of guarantee dated 22nd of May, 2013, the Lister Oil Mill Limited and Mr Ismail Alao guaranteed the repayment of the loan facilities.
When the loan became due and owing to the persistent failure of Lister Flour Mills to liquidate its indebtedness to the bank, the bank called in the facilities and serve demand letters for immediate payment of the outstanding debt.
However, the company acting through the defendants demonstrated nonchalant attitude towards liquidating the company’s indebtedness.
Upon continual refusal of the company and the defendants to liquidate the company’s indebtedness to the bank, and in accordance with the provision of the deed of debenture the bank on the 29th of September, 2015 appointed Receiver/Manager over the assets of the company.
The bank avers that the Lister Flour Mills indebtedness to the bank is a colossal sum of which stands in the sum of N8,856,570,029.81.
The bank contended that the company’s failure to liquidate its indebtedness to the bank adversely affecting the Bank’s business operation as the funds packaged as facilities to Lister Flour Mills Company are third party depositors/stakeholders funds, and if the funds packaged as facilities for the company being third party depositors/stakeholders funds remain unpaid, it will have more devastating effects on the business of the bank and the resultant effect will be multiple on the economy of the country.
The bank stated further that its books are always examined by the regulatory authority and the bank has always been queried severally by the regulatory authority on the account of Lister Flour Mills company which are always colossal debt and also the bank has been given final notice by the regulatory authority of impending grave sanction if the accounts of the Lister Flour Mills continued to be in debt.
Consequently, the bank’s claim against the defendants are as follows:
Judgement against the defendants jointly and severally in the sum of N8,856,570,029.81as at 8th September, 2015 and interest to accrue.
Order of injunction restraining the defendants and their agents from frustrating or disturbing the Receiver/Manager in performance of its duty.
Cost of this suit assessed at N5 million.
The defendants have not filed any defense.
The case has been adjourned for mention.