A Business Transaction Gone Awry

0 0
Spread the love
Read Time:8 Minute, 3 Second
What ordinarily would have been a smooth business deal between two firms is now characterised by legal tussle, reports Kunle Aderinokun
 
When on March 1, 2007, Cross Country Limited, operator of City Bus owned by Mr. Bube Okorodudu, approached A.G. Moeller, which has Mr. Kemi Adeloye as its chairman/chief executive officer, for a finance lease facility of N140 million to acquire 40 Volkswagen Transporter buses, it never envisaged any problem.
 
Okorodudu has been in the business of selling cars and his car mart, Car Link Limited, is well known all over the country and doing creditably well. But the zeal to diversify his business, made him venture into commercial transportation and set up Cross Country. Vowed to be dominant in this endeavour, Cross Country sought the assistance of A.G. Moeller, a finance house based in Lagos to finance the procurement of its 40 VW Transporter buses. Knowing full well that commercial transportation business is lucrative and would pay back the loan facility according to schedule, Cross Country signed the agreement for the facility. Shortly after, he was made an offer of the N140 million lease facility.
 
According to the terms of the lease facility as stated in the offer letter dated March 29, 2007, obtained by THISDAY, the N140 million Cross Country secured from A.G.Moeller to purchase the 40 units of Volkswagen Transporter buses at the rate of N3.5 million each, when fully repaid would total N228 million after factoring interest and other charges. The company was expected to repay the loan over 24 months “from operational cash flow, which include but not limited to daily cash takings from commuters.”
 
However, due to unforeseen challenges, Cross Country could not meet the 24-month deadline for the full repayment of the loan with interest and other charges. But it paid N222.916 million out of the N228 million by the 30th month.
That was where the trouble started.
 
Following this payment default, A.G. Moeller, asked Cross Country to pay additional N213.142 million, which it claimed, represented default interest charges. This implies that the company would be paying a total of N436 million for the N140 million loan facility.
 
The letter conveying this development to Cross Country was addressed to Okorodudu and signed by Adeloye. It was titled: ‘Final Demand Notice for the Payment of Your Indebtedness against the Leased 40 units of Volkswagen  Transporter Bus to Your Company’
The letter, dated January 25, 2011, reads in part: “We hereby make a final demand for the payment of the sum of N213,142,447.88 (Two hundred and thirteen million, one hundred and forty two thousand, four hundred and forty seven naira, eighty eight kobo) outstanding against you as at this letter. This amount represents the arrears of unpaid rentals and other charges now due for payment.
“We therefore expect your payment instrument in satisfaction of your liability as above relevant charges will continue to apply until liquidation.”
Cross Country was shocked to read this from A.G. Moeller because having paid N222.916 million out of N228 million, it would have only N19.836 million for it to settle with interest and other charges.
 
It had before then received a letter written by Cross Country (as a response to an earlier letter the former wrote on September 16, 2010) clarifying that N19.836 million was the outstanding to be settled by the company and was committed to liquidating it.
 
“We would like to restate and acknowledge before responding to other pertinent issues raised in the said letter that the sum of N19,836,246.25 (Nineteen million, eight hundred and thirty six thousand, two hundred and forty six naira, twenty five kobo only) is the outstanding on the above lease and we are committed to liquidating it as soon as our requests to you are made available to us. It is noteworthy to state that so far, we have paid a total sum of N222,916,416.66 on this transaction as at 31st August, 2010 for transaction , whose total outlay was N140,000,000 and total repayment of N228,000,000 as agreed at the time of going into the loan/purchase agreement,” it had stated in the letter.
 
However, a petition by Cross Country had alleged that A.G. Moeller, had already, through “text messages from a purported bank manager” to the company’s chairman, threatened legal action and repossession of the 40 VW Transporter buses if Cross Country failed to pay N213.142 million as the outstanding of the loan facility. But Cross Country insisted that “technically, we are the beneficial owners of the vehicles having paid the total sum of N222,916,416.66 and are ready to pay off the balance N19,836,246.25, thus bringing the total payment on this transaction to N242,752,662.91 (Two hundred and forty two million, seven hundred and fifty two thousand, six hundred and sixty two naira, ninety one kobo).”
 
Determined to make Cross Country accede to its demands, Adeloye wrote a petition to the Nigeria Police Zone 2 Command, Onikan, Lagos, alleging that the former had stolen 40 VW Transporter buses belonging to him.
 
With the turn of event and faced with police intervention in the issue, Cross Country also decided to run a background check on A.G. Moeller to ascertain its status. The background check revealed that the company was not licensed by the Central Bank of Nigeria (CBN) to operate as a finance company.
 
A letter from the Other Financial Institutions Supervision Department of CBN dated May 23, 2011, to the Assistant Commissioner of Police, IGP Monitoring Unit, on the status of A.G Moeller stated: “we here state that A.G.Moeller Limited was not licensed by the Central Bank of Nigeria to operate as a financial institution in Nigeria.”
 
Armed with this finding, Cross Country had to cross-petition the Inspector General of Police, who ordered his Special Monitoring Team to take over the case from Zone 2 and investigate the two petitions.
 
Following its investigation of the two petitions, the Special Monitoring Team submitted its report. Part of the report reads: “That investigations revealed that, by the nature of the subject transaction between A.G. Moeller Ltd and Cross Country Ltd, the 40 units of Volkswagen buses in the question were owned by Cross Country and not by A.G. Moeller Ltd, that Cross Country cannot be held to have stolen its own buses.
 
“That investigation also revealed that A.G. Moeller was operating an illegal finance house i.e. it was neither licensed nor registered or accredited to run a finance house, which is an offence under the BOFIA Act.”
 
Based on this report, the Police brought up a criminal charge against A.G. Moeller Ltd and Kemi Adeloye, its chairman/CEO at the Federal High Court, Lagos Division on October 25, 2011 with the charge number FHC/398c/2011.
 
A.G. Moeller and its chairman/CEO were handed to the IGP Special Monitoring Team by the Economic and Financial Crimes Commission(EFCC), who had earlier arrested the AG Moeller boss upon the complaints by CBN based on their findings that the company and its chairman/CEO were illegally operating a finance house.
 
Convinced that it was innocent, A.G. Moeller and its chief executive vehemently contested the charge.
In pursuing this, A.G. Moeller and Kemi Adeloye filed a Fundamental Rights Enforcement Proceedings against the Nigeria Police, EFCC, Cross Country, Car Link and Bube Okorodudu at the Lagos High Court in Suit No. M/1175/2011, claiming N1 billion as damages. They also filed a motion to quash the case pending at the Federal High Court. Interestingly, however, EFCC was dropped from this suit by AG Moeller.
 
But on May 3, 2013, the Federal High Court dismissed the motion to quash the criminal charge against them. And on June 6, 2013, the Lagos High Court ruled that the fundamental human rights of A.G. Moeller and Kemi Adeloye were not infringed upon.
 
While the police had earlier filed criminal charges against Adeloye, EFCC also two years later dragged Okorodudu and his company to court for theft of N82.9million which, it said was the sales proceeds from 17 units of Volkswagen Transporter buses belonging to AG Moeller Ltd.
Chief Ladi Rotimi-Williams’ Chambers, the lawyers to Cross Country, Car Links and Bube Okorodudu, had earlier petitioned the EFCC Chairman, Mr. Ibrahim Lamorde, and copied the Minister of Justice and Attorney-General of the Federation, Mohammed Adoke, SAN on the whole matter. The letter was dated November 28, 2013.
 
Weeks ago, shortly after testifying in the criminal matter against Adeloye at the Federal High Court in Lagos in the suit filed against Adeloye by Police for operating illegal finance house, EFCC operatives accosted Okorodudu in the court premises and attempted to arrest him.
At a court session two months ago, EFCC requested for a bench warrant against Okorodudu, but Okorodudu’s lawyer, Chief Robert Clarke (SAN), objected to the application, insisting that there is a subsisting application by his client challenging the jurisdiction of the court.
 
At a resumed hearing late last month, the Lagos High Court sitting in Ikeja, turned down the request for the warrant of arrest, maintaining that the presence of an accused at the hearing of a preliminary objection is not compulsory.
Happy
Happy
0 %
Sad
Sad
0 %
Excited
Excited
0 %
Sleepy
Sleepy
0 %
Angry
Angry
0 %
Surprise
Surprise
0 %

Facebook Comments

Previous post The New Opportunity for Indigenous Ship-owners to Lift Crude Oil
Next post NIGERIA: Stock Market Option as Tool for Resolving Income Inequality

Average Rating

5 Star
0%
4 Star
0%
3 Star
0%
2 Star
0%
1 Star
0%

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.