GTBANK & INNOSON VEHICLES LEGAL BATTLE IN RETROSPECT: Analyzing The Possibility Of A Complete Take-Over Of GTBank By Innocent Chukwuma

Whoever issued this Press statement on behalf of GTB either doesn’t understand the meaning of Garnishee proceeding or he thinks Nigerians don’t. Either way, this is a very weak attempt at obfuscation. I’m referring to the 3rd paragraph where GTB claimed the Nigerian Custom Service is the entity against whom the execution of the garnishee order is directed.

That is not exactly correct.

To be clear, I have little interest in the legal gymnastics involved in this case since I am not a lawyer. I believe the court is already doing justice to that. I am only interested in the academic part of this case in order to ensure that no matter which camp you belong to, if you are ‘chuucking’ your mouth, you will be doing it from the position of understanding.

Innoson has two court cases with the GTB, one is about the criminal deduction from the account he has with the Bank and the second one is a Garnishee proceeding instituted by Innoson as the judgment creditor and the GTB as the third party in whose custody funds belonging to the judgment debtor (Customs) is domiciled.

First, let us understand what Garnishee proceeding is.

In a simple layman English, Garnishee Proceedings is a Legal Action in which a court directs a Third Party (known as the Garnishee) that has in its possession monies or other money instrument belonging to or accruable to one who is owing another (judgment debtor) to pay that money to the person being owed known as the judgment creditor. The 3rd party here could be an Employer who has in his/her possession salaries accruable to the judgment debtor.

For example, if Charles Ogbu owes a woman who sells achicha close to his office and refuses to pay, she may decide to institute a garnishee proceeding where the court will force Charles Ogbu’s Employer to channel Charles’ salaries to her until the judgment debt owed by Charles is liquidated in full. If my Employer fails to abide by the garnishee order and the woman goes back to court to get a Writ of Execution, it will be fully enforced, NOT AGAINST ME (Charles) who is owing but against my employer (the Garnishee) who will now be treated by the court as the debtor.

But in most cases, the Third Party is usually the Banks where people keep money as is the case here.

In 2004, during the government of Chief Olusegun Obasanjo, the Nigerian Custom Service seized goods legally imported by Innocent Chukwuma, the chairman of Innoson and went further to auction off the goods. Innoson took Customs to court claiming damages and won but the Custom Service refused to pay him the money as ordered by the court. He (Innoson) then located Customs account with the GTB which has enough funds to settle the judgment debt and instituted a Garnishee proceeding with GTB as the third party known as the Garnishee but the Bank REPORTEDLY connived with the Nigerian Custom service and released the fund already covered in the garnishee proceeding to the Custom.

By allegedly conniving with the judgment debtor (the Customs), GTB, in the eye of the law, has ceased being a Third Party but has automatically become the judgment debtor against whom the Writ of Execution must be implemented in full.

Now, there is a little confusion here: In its Press statement released then, Innoson Vehicles claimed its Writ of Fi Fa (a legal document by which assets belonging to a judgment debtor may be seized) with which it sealed off some GTB branches in Anambra state then, is in connection with the illegal deduction case while the GTB in its own statement then claimed that the action of Innoson is in respect of a Garnishee proceeding against the account of the Nigerian Customs domiciled with the Bank and not against the Bank as an entity.

If Innoson is sealing off GTB branches with a Writ of Fi Fa, it is illogical to claim it is in respect of a Garnishee proceeding against the account the Nigerian Customs Service has with the Bank because Garnishee proceeding is mostly targeted at the third party holding money belonging to the judgment debtor in its possession. It must either be in respect of the illegal deduction case as claimed by Innoson or it must be in respect of the Garnishee proceeding in which GTB is the erring Garnishee who connived with the judgment debtor and is now being treated as the debtor. Either way, GTB is clearly being economical with the truth here.

I am deeply concerned about the rift between Innoson and GTB especially if Supreme Court has finally ruled out. That’s the highest court in Nigeria. The window is closed for any room for appeal or out of court settlement. Take it from me, No Bank in Nigeria will cough out 8 billion naira and not shake.

The former Governor of the Central Band of Nigeria, CBN, Professor Charles Soludo had placed consolidation at 25 billion naira for all banks, that is what is kept by CBN and its not meant for court cases but to secure shareholders in event of total collapse.

MTN for instance being an afro- Asian brand far bigger than GTB was slammed by FG to pay a tax fee of 2.1billion dollars 3 years ago. Till today, MTN is still pleading to the government to pay 800 million dollars and spread it in 3 years. GTB may have 8 billion to pay spread in 10 years but they don’t have it now. It doesn’t always look as it’s posted at every financial year by commercial banks in Nigeria. Apart from buildings and cars, GTB largely have their money in other assets, Stocks, Bond, Money Market and Treasury Bills. These monies are not easily accessible by banks as a lay man outside the industry would think.

It has become a media war now and the biggest loser her is GTB. The more GTBank delays in finding a solution, the more the interest increases, GTB is not losing money only but customers, the reputational damage is inexplicable.

And I wonder why the legal team did not settle out of court after appeal court ruling. I remember appeal court asking GTBank to produce the log book which they alleged that Innoson did not sign, they said it was burnt in their archive. They also said Innoson forged Bills of laden. In all this, GTB should have known that if anything goes wrong, they have a lot to loose. GTB is a PLC with share holders money. Where will they get 8 billion to pay for a court ruling. Where will the bank tell share holders they got the money to pay Innoson from? You see, it’s not a chicken change for GTB as many lay men will make you believe. Every kobo GTB will spend this year has been budgeted for and approved by the banks board. They couldn’t have approved over 200 million for legal issues in 2019. Not possible. Most banks weigh their chances and settle out of court.

The owner of GTB is not Agbaje, he only has the largest share. GTB being a public limited liability company is owned by every Nigeria or foreigner who has a single share in that bank. If you are a share holder, will you allow your money to be given to another company?

I just listened to a video now where Innoson has given them an olive branch. He said, GTBank told appeal court in an affidavit that if they pay him 8billion they will close shop. Innoson is saying, I don’t want you to close shop, convert what you owe me to shares.

The question is who has the largest share in GTBank? Is the share up to 8billion? If the current highest share holder is less than 8 billion in cash value, that makes Innoson the highest share holder in the bank. If GTBank practice preference of highest share in their governance book, Innoson automatically has an overwhelming influence in whatever happens in that bank going forward.

His legal team may have studied all these to have issued a statement that they are taking over GTB except they pay him but I know they don’t have that money to pay and the more they delay, the more interest is accrued. It’s a delicate situation that defies logic. 

Culled from Naira-Land

About the author

Leave a Reply

Your email address will not be published. Required fields are marked *