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%AM, %05 %340 %2014 %07:%Sep

Court Freezes Dangote's Accounts In Over 20 Banks

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A Federal High Court in Lagos has ordered about 20 commercial banks in Nigeria to dishonor all withdrawal cheques from Mr. Sanni Dangote, younger brother to Alhaji Aliko Dangote, and his companies, Dansa Foods Limited and Bulk Pack Services Limited.

The Federal High Court has frozen at least 20 bank accounts due to his inability to pay a N5.2bn loan he obtained from Union Bank. The order affects payment instruments issued by Sanni Dangote and his companies.

The affected banks include First Bank of Nigeria (FBN), First City Monument Bank (FCMB), Guaranty Trust Bank (GTB), United Bank for Africa (UBA), Zenith Bank, Standard Chartered Bank, Stanbic-IBTC, Access, CITI Bank, Diamond Bank, Ecobank International, Enterprise Bank, Fidelity Bank, Keystone Bank, Mainstreet Bank, Skye Bank, Wema Bank, Heritage Bank, Sterling Bank and Unity Bank.

Union Bank had launched a legal action against Sanni Dangote and his companies over the refusal to pay the N5.2bn loan granted them since 2008.

Justice Okon Abang who, on Thursday in a bench ruling, made the order for Sanni Dangote's accounts to be frozen, said the order would subsist till September 11, 2014, when the court would entertain all applications in a suit brought by Union Bank Plc against Dangote and his companies, Dansa Foods Limited and Bulk Pack Services Limited. He also ordered all the affected banks to make sure that they file affidavits declaring Mr. Dangote's statement of accounts with them within five days of the interim order.

Union Bank, through its lawyer, Chukwudi Enebeli, from the chambers of Kemi Pinheiro, Senior Advocate of Nigeria, SAN, had instituted suits seeking an order of mareva injunction to restrain all the defendant's bankers in Nigeria from allowing them withdraw funds from their accounts pending the determination of the suits. According to the bank, Mr. Sanni Dangote, in the bid to evade payment of the loan, had begun pressurizing the affected banks to honor cheques on the affected accounts in a desperate attempt to deplete the funds in the companies' accounts and divert them to other accounts outside the country. Investigations carried out by the bank showed that the defendant had already started diverting his funds to various foreign accounts including Dubai in the United Arab Emirates (UAE), Canada and Switzerland.

When the case came up for hearing on Thursday, the motion could not be heard as counsel for the defendants informed the court about an application already filed challenging the jurisdiction of the court to entertain the suits. 

An official of Union Bank, Olufunmilola Ayoola in a deposition to the bank's affidavit, alleged that Union Bank Plc has been having difficulty in extending credit facilities to small scale businesses, which in turn would have helped boost the economy of the country, and that the loans which Dangote and his companies refuse to pay would go a long way in changing that. The failure of Dangote and his companies to liquidate the loan is reportedly seen to be impacting negatively on Nigeria's economy, a development which the bank claimed necessitated the suit.

Zenith Bank and Diamond Bank, who were the only banks who had representatives in the court, said that Mr. Sanni Dangote and the affected companies were also indebted to them. Zenith Bank specifically mentioned that Dangote owes them to the tune of 7million Euros.

In view of the defendants' objections contesting jurisdiction of the court to hear the suits, the judge adjourned the case till September 11, 2014, to enable all applications to be taken from all parties.

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