Food Concepts Nigeria Plc Drags UBA Bank To Court Over N1.6 Billion Debt

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Sept 9, 2015 –Food Concepts Nigeria Plc Drags UBA Bank To Court Over N1.6 Billion Debt

A confectionery company has gone to court to challenge the claim that it is owing United Bank of Africa (UBA) N1.6 billion.

In a suit filed at the Lagos High Court, Food Concepts Plc faulted the bank’s claim, accusing it of breaching the terms of a N1.6 billion loan under the Commercial Agricultural Credit Scheme (CACS).

It said it was shocked by the bank’s publication of its name as “a chronic debtor” in three newspapers when the facility would not expire until next year.

In the suit filed by Mrs. Omohafe Opara of Rickey Tarfa and Co, Food Concepts is asking the court for a perpetual injunction restraining the bank or the firm’s agents from attaching any of the firm’s assets; restraining the bank from making further malicious publication against it; preventing the bank or its agents from any form of liquidation or receivership and directing the bank to render account of the N1.6billion loan.

The firm also sought an order compelling UBA to reconcile its accounts in line with the CACS.

Food Concepts sought the N1.6 billion loan under the CACS provided by the Central Bank of Nigeria (CBN) to develop a Greenfield Poultry Farm in Abeokuta, the Ogun State capital, as a backward integration initiative under the name of Free Range Farms Limited.

It said it pledged specific assets as security for the loan (including but not limited to the farm’s assets), adding that as such, its exposure is limited to those specified assets.

The claimant said it generally complained about delays in the disbursement of the loan, alleging that it discovered irregularities in its accounts with UBA which necessitated a reconciliation.

It accused the bank of poor handling of the disbursement of the loan, adding that this affected the project’s outcome.

The claimant said it secured the First City Monument Bank’s commitment to refinance the loan with CBN’s knowledge, claiming that this did not stop UBA from filing a winding up petition.

“Despite the winding up petition, the bank still went ahead to enter into a Memorandum of Understanding (MoU) with the claimant and FCMB in full liquidation of the outstanding reconciled debt”, Food Concepts alleged.

It accused the bank of damaging its “credibility and reputation” by publishing its name as a “chronic debtor”, praying the court for N1 billion as general damages and N10 million as costs.