Commercial Law

UBN, FCMB,Union Homes, Aso Savings battle over N1.650bn deposit

By Michael Ojo

Union Bank Plc on Tuesday asked the Court of Appeal in Lagos to restrain two firms – Union Homes Savings and Loans, and Aso Savings and Loans – from tampering with its N1,647,506,807 deposit in the custody of First City Monument Bank Ltd.

It said the money belonged to its depositors, but the Economic and Financial Crimes Commission (EFCC), despite a judgment in Union Bank’s favour and pending appeal compelled it to issue bank drafts/managers cheques in the sum of N1,647,506,807, now deposited with FCMB.

Union Bank told the court, it issued the drafts and handed them to the Commission on the basis that the latter would hold on to same, pending resolution of an appeal by both firms challenging the lower court’s judgment, but that the EFCC, in breach of the agreement, released the bank drafts/managers cheques to both firms (Union Homes and Aso Savijgs), who are now planning to dissipate the funds through FCMB.

It averred that there was a need to prevent the firms and FCMB from tampering with the money until the determination of the Appeal in order to preserve the res.

Union Bank is the Respondent/Applicant/Judgment Creditor in the suit with Appeal No: CA/LAGICV354/2020, while Union Homes Savings and Loans and Aso Savings and Loans are the Appellants/Respondents/Judgment Debtors.

FCMB Ltd is the Part Interested/Cited in the suit. Union Bank, in its motion on notice filed yesterday, sought four reliefs. They are:

  • An injunction restraining Union Homes Savings and Loans and Aso Savings and Loans from demanding/collecting N1,647,506,807 from FCMB or spending, utilizing and/or transferring it, pending hearing and determination of the firms’ substantive appeal against the judgment of the Federal High Court in Suit No: FHC/L/CS/1818/2019 – Union Bank of Nigeria Plc Union Homes Saving And Loans Ple & Anor.
  • An injunction restraining FCMB from paying to/allowing the withdrawal of the sum pending determination of the Appeal.
  • An order directing FCMB to invest N1,347,506,807 in an interest yielding account maintained with it pending the determination of the Appeal.
  • An order directing FCMB to pay N1.647,508,807 with accrued interest thereon to the successful party in the Appeal.

It listed the grounds for the application in an affidavit of the motion sworn to by Union Bank’s legal officer, Mr Jeremiah Zephaniah.

He said the firms were indebted to Union Bank in the sum of N2,150,481,401.27 and failed to pay back, following which the bank sued them to recover the sum at the Federal High Court, and won.

The Appellants/Respondents/Judgment Debtors appealed the judgment at the appellate court and the appeal is pending.

“There is no order of this honourable court staying execution of the judgment of the court below,” Zephaniah averred.
He said the firms then petitioned the EFCC alleging that Union Bank owes them N1.647.508,807 on share related transactions, following which the agency compelled it to issue the Bank Drafts/Managers Cheque, “on the understanding that the Bank Drafts will not be released to the Appellants/Respondents/Judgment Debtors until the issue of the Appellants’ indebtedness to the Respondent/Applicant is satisfactorily resolved.”

“Officers of EFCC acted contrary to the above understanding when without a satisfactory resolution of the Appellants/Respondent Judgment Debtors’ indebtedness to Respondent Applicant, released the Bank Drafts/Managers Cheques to the Appellants.

“The 1st Appellant has now presented the various Bank Draft for payment through the Party Interested/cited, First City Monument Bank Limited, who acts as its collecting bank.”

He averred that if once the bank drafts are cleared on their behalf by FCMB and their account credited, the firms will withdraw/dissipate the whole sum of N1,647 506,807 such that if the appeal is dismissed the Respondent Applicant will be unable to recover the judgment.

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