Commercial Law

N38.5bn: How Seplat got loan from Access Bank

A new twist was at the weekend added to the loan controversy between Access Bank and Seplat Petroleum Development Company Plc as processes filed in court by Access bank insist that the oil company and Cardinal Drilling Ltd, the company that actually took the loan are one and the same.

The documents filed in court by the bank through its lawyer Kunle Ogunba (SAN), stated that Cardinal Drilling is a subsidiary of Seplat, and it may have actually utilized the loan.

Seplat purportedly wrote a petition against Ogunba to the Legal Practitioners Privileges Committee (LPPC) and the Legal Practitioners Disciplinary Committee of the Nigerian Bar Association (NBA).

It alleged that Ogunba misled the court in obtaining an order for Access Bank to take over Seplat’s offices at 16A Temple Road, Ikoyi as receiver/manager over a multimillion naira debt.

Seplat, in the petition, claimed that Access Bank could not hold it liable for a loan obtained by a third party (Cardinal Drilling).

The oil firm faulted Ogunba’s claim that Seplat employed Cardinal Drilling “as a veritable ‘vehicle’, ‘smoke screen’, and/or ‘shell company’ for the obtainment of the facilities from the plaintiff (Access Bank)”.

But contrary to Seplat’s claim that there was no documentary information exhibited to buttress the claim, findings from the processes filed by Access Bank showed that the plaintiff provided proof of Seplat benefiting from the loan.

After Cardinal Drilling obtained the loan and disbursed it, the company passed the obligation onto Seplat. This is as shown in company’s statement of account, which Access Bank exhibited in court.

The bank has details of Seplat transferring funds into Cardinal Drilling’s account, which in turn would transfer it to Diamond Bank (which was later acquired by Access Bank), as loan repayment, suggesting that Seplat is actually paying back the loan by proxy.

To the bank, Seplat is the real debtor, which was why the bank and its lawyers joined Seplat in the debt recovery suit and obtained and executed the order against it, which is now a subject of appeal.

A source within the bank revealed that instead of  Seplat to focus on repayment of the loan, it is focusing on the bank’s lawyer in a bid to tarnish the image. The source stated that the trial judge,  Justice Rilwan Aikawa must have seen the merit of the bank’s  argument before granting Ogunba’s application despite the objection raised by Seplat’s lawyers.

The judge, among others, held: “In my view, all these issues touch the substance of the case and should therefore be reserved for substantive trial…;

“An attempt to delve into any of them at this stage has the potential and danger of determining substantive issues at this interlocutory stage, a tendency which has been frowned upon by the appellate courts;

“There is no evidence of suppression of any material facts by the plaintiff in this application.”

The source accused Seplat of pre-empting the decision of the trial court as the petition it wrote against Ogunba was written even before the court. “Seplat’s petition was submitted on December 18, 2020 while Justice Aikawa delivered his ruling on December 24, 2020”.

On the reference to matter of the Honeywell Group and Ogunba, the stated that it only an attempt to blackmail Ogunba. “Not only was Ogunba cleared of any wrongdoing, Honeywell also lost to Ogunba at the Appeal Court in the cases that formed the basis of the petition;

Besides, even before the LPPC restored Ogunba’s rank, the NBA had cleared him of any wrongdoing, dismissing Honeywell’s petition for not disclosing any prima facie case of professional misconduct against Ogunba”.

In his own reaction, Ogunba said that “It is obvious that the petition (if any) is an attempt to blackmail me and avoid the payment of huge indebtedness of Seplat to Access Bank Plc and nothing more.

“Seplat is better advised to take steps to liquidate its debt rather than attempt to intimidate me, a lawyer merely doing my duties as such. Once again, I reiterate the fact that the petition has not been formally brought to my attention for a formal reaction.

“It is stock in trade of these huge debtors to peddle petitions all around in a bid to avoid the payment of their debts. I was not there when they borrowed the funds and they have obviously targeted my person for the nuisance value rather (than) take steps to liquidate the debt.

“This particular debt was part of the huge debt overhang that sunk the defunct Diamond Bank and they don’t mind if Access Bank goes under for their sake too”.

Loan agreement and repayment issues have always raised tension within the Nigeria economy, particularly between banks and big industries. In recent past, the issue between Innoson Motors and. Guarantee Trust bank readily comes to mind. Observers are worried that lawyers may become objects of blackmail in the course of pursuing repayment of loans.

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