Cocoa processing company rendered idle over loan conflict

Cocoa processing company rendered idle over loan conflict

Sunday, June 5, 2016 4:49 pm


Multi –Trex Integrated Foods Plc

Multi –Trex Integrated Foods Plc

A Federal High Court in Abeokuta, Ogun State, to be presided over by Justice Muhammed Adamu, will, on Monday 6 June, 2016, continue hearing in the controversial receivership suit between Asset Management Corporation of Nigeria (AMCON) and Multi –Trex Integrated Foods Plc, arguably the largest cocoa processing company in Nigeria.

The factory has remained closed since Friday June 26, 2015, on the basis of an Interim Order of the Federal High Court, granted by Justice F. O. G. Ogunbanjo on Friday June 12, 2015 and subsisting till date, for possession of the manufacturing factory of the company.

AMCON is laying claims to a debt of N13.3 billion being the contested sum of N8.5 billion Eligible Bank Asset (EBA), bought from Skye Bank plus AMCON’s own interest calculated for the period that the company has been prohibited by Central Bank (CBN) from accessing Working Capital for its operations. Multi-Trex faults the procedure. It claimed its acquisition by AMCON is not only unlawful as it was performing and meeting all its financial obligations with Skye Bank before theN8.5 EBA was acquired. Multi-Trex is insisting on the sum of N6 billion agreed with AMCON as full and final settlement.

The CBN ban was by its Guideline of September 17, 2012 prohibiting all Nierian Deposit Money Banks from lending to individuals and corporate bodies whose loans of up to N5billion has been taken over by AMCON.

The cocoa company is also questioning the way the receiver/manager, Mr. Tosin Shaba, appointed by AMCON, took over its factory as not only unprofessional and against the ethics of the legal profession, but that it is also against the AMCON Act.

Cocoa plantation

Cocoa plantation

On January 30, 2015, AMCON through its lawyer, Mr Shaba approached Federal High Court, Lagos where it filed a general claim against the defendant for the repayment of N13.3 billion being amount due and outstanding debt due to it as at December 31, 2014. It also asked for a post judgment interest rate of 19 per cent per annum from the date of judgment until the final liquidation of the debt;

On the same date, Justice Mohammed Yunusa of the same court granted a motion ex parte in favour of AMCON to take possession of properties belonging to the company, including its factory at Warewa , Ogun State. In its affidavit before the court, AMCON described the factory as a “parcels of land lying and situated at Lagos- Ibadan Expessway, Warewa, Ifo Local Government Area of Ogun State”. The court also froze all the bank accounts of the company in all Nigerian Banks.

Cocoa

Cocoa

Amongst others, the court also granted “An interim order directing the above named first and second defendants bankers to file and serve on the claimant counsel within seven days of service of this order on it an affidavit disclosing the balance on each of the defendants accounts held with the bank as at the date of the order pending the determination of the Motion on Notice field in this regard.”

Justice Yunusa thereafter adjourned the suit to March 10, 2015 for report of compliance. With this orders, AMCON took possession of the factory and chased all the 500 staff away. On March 31, 2015, AMCON appointed Mr. Shaba, the same lawyer that it engaged to take possession of the Defendant company, as the Receiver/Manager of the company. The suit suffered series of adjournment and before the defendants could present their case, AMCON again filed a notice of discontinuance of the suit on before the court on June 1, 2015.

On the same date, Shaba now as Receiver/Manager surfaced before the Federal High Court, Abeokuta, Ogun State, where he filed a motion ex-parte and an Originating Summons, seeking the court to determine, suspend and extinguish the powers of the defendants from the company. Joined in the suit as defendants are the Executive Vice Chairman of the company, Mr Dimeji Owofemi, Mrs.Folasade Bafunso, and Mr Yusuf Isiaka. The Plaintiffs are Multi Trex Integrated foods, MrTosin Shaba, and AMCON.

Audu Ogbeh: Minister of agriculture

Audu Ogbeh: Minister of agriculture

On June 12, 2015, Justice FOG Ogunbanjo of Federal High Court, Abeokuta issued another ex parte order for the plaintiffs to take possession of the defendants company and another property at Oregun Industrial Estate, Ikeja, Lagos pending the determination of the suit. This was despite the fact that the order of Justice Yunnusa of the Federal High Court, Lagos is still subsisting.

Since this date, the matter had been before the court while the factory has remained shut and unproductive. Every effort by the defendants’ lawyer, Dele Adesina SAN proved abortive.

On August 17, 2015, the defendants filed an application seeking an order of court to vacate and set aside the ex parte order granted to the plaintiffs. The matter is yet to see the light of day;

On the same date, the defendants also filed another application seeking to set aside the appointment of Mr Shaba as the Receiver for the company. The defendants contented that Shaba’s appointment was “wrongful in that AMCON, having submitted recovery to a court of competent jurisdiction, pursuant to sections 49 and 50 of the AMCON Act 2010 and section 209 (2) of the Companies and Allied Matters Act, cannot turn around simultaneously to pursue appointment of a receiver under the same Acts.”

They also contended that as lawyers to the plaintiffs, who are privy to facts deposed to in the matter before the Lagos Court wherein the defendants contested the alleged debt, Mr Shaba is not appointable as the receiver of the defendant’s company. “The appointment of the receiver, the institution of this suit during the pendency of a similar action before the Lagos Division of the court, as well as surreptitious application for ex parte orders by AMCON, and the alleged receiver is in bad faith, and calculated to intimidate the defendants”, Adesina argued.

The defendants further contested the appearance of Mr Shaba as lawyer in the suit. “Under the provisions of the Section 17(5) of the rules of professional conduct for legal practitioners, Mr Shaba cannot appear as counsel for a client in a proceeding in which he is a party.”

Three weeks ago, the Chief Judge of the Federal High Court, Justice Ibrahim Auta transferred the case file from Justice F.O.G Ogunbanjo to Justice Mohammed Adamuof the same division. The matter continues today before the new judge.

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