FACT CHECK: Does Otudeko owe Ecobank N13.5bn as claimed?

Recently, Babrican Capital Limited, an affiliate of Honeywell Group Limited (HGL), acquired 4.7 billion shares of FBN Holdings Plc (FBNH), the parent company of First Bank of Nigeria.

Oba Otudeko is the chairman of Honeywell Group and former chairman of FBN Holdings.

According to a notice filed on the Nigerian Exchange Limited, Honeywell Group and its affiliates acquired an aggregate of 4,770,269,843 units of FBN Holdings’ shares.

The shares represent over 13 percent of the stakes in FBN.

THE CLAIM

However, a few days later, Ecobank accused Otudeko’s companies of a N13.5 billion debt.

According to a letter dated July 7, 2023, Kunle Ogunba, lawyer of Ecobank, claimed Otudeko was “diverting his assets and that of the Honeywell Group of companies through the said Barbican Capital Limited”.

The bank added that this move is “in order to frustrate the enforcement of the judgment of the Supreme Court against him and the Honeywell companies towards recovering his/their undisputed indebtedness to our client”.

Ecobank also claimed that “the Supreme Court on January 27, 2023, in appeal No. SC/CV/210/2021 delivered judgment affirming the indebtedness of the above persons to our client”.

“It further commanded that they must pay all outstanding debts that have accrued under the loan contract between the parties; being the same debt personally guaranteed by Otudeko, which said indebtedness stood in the sum of N13,507,052,417.99  as at January 31, 2023, whilst interest continues to accrue on the due debts as legally sanctioned by the supreme court of Nigeria, the highest court in the land, aforesaid,” the letter reads.

Does Otudeko truly owe Ecobank and is there a supreme court verdict as claimed?

CHAIN OF EVENTS

In 2012, Anchorage Leisures Limited, Honeywell Flour Mills Plc and Siloam Global Services Limited borrowed from Oceanic Bank, which was subsequently acquired by Ecobank.

These loans were all performing in accordance with agreed terms.

In May 2012, subsequent to the acquisition by Ecobank, Honeywell on behalf of the companies commenced discussions to reach an agreement for full and final settlement of the indebtedness.

However, in July 22, 2013, an agreement was reached that the companies would jointly pay the sum of N3.5 billion in full and final settlement of their indebtedness to Ecobank. The sum of N3.5 billion was paid and a letter written to the bank confirming the terms of the agreement.

The bank was said to have responded the same day, confirming the payment.

However, on January 13, 2014, the companies had completed the payment of the agreed N3.5 billion.

Honeywell, thereafter,  wrote to Ecobank confirming that the payments had been completed, and requested for a letter of discharge, release of the securities held against the facilities and an update of the Group’s accounts on the CBN CRMS portal.

But on October 2014, Ecobank wrote to Honeywell stating that since the payment had not yet been reflected as at January 17, 2014. The bank also added that the board of directors had rejected Honeywell’s N3.5 billion payment.

The bank said during the  CBN/Nigeria Deposit Insurance Corporation (NDIC) review, the accounts were flagged as related party loans on the basis that “your chairman, Dr. Oba Otudeko, CFRP was a former director of Ecobank Transnational Incorporated, our parent company”.

Based on the foregoing, the bank demanded for the payment of the N3,557,431.04 being the outstanding aggregate balance on the three accounts, adding that interests would continue to accrue until full repayment.

ECOBANK’S NEW CONDITIONS

After a long period of silence, Ecobank finally wrote to the Honeywell Group, seeking to introduce new conditions.

This, unfortunately, did not sit well for Honeywell Group and related firms.

Considering the prolongation of the agreement,  Honeywell petitioned the bankers’ committee sub-committee on ethics and professionalism for its intervention and a speedy resolution of the matter.

The committee ruled that the agreement initially made was Honeywell’s final settlement.

Ecobank filed a suit at the federal high court, which went in favour of Otudeko’s companies on May 31, 2019.

Subsequently, Ecobank filed an appeal. On December 14, 2020, the court of appeal overturned the earlier decision of the federal high court.

The companies then appealed to the supreme court.

SUPREME COURT JUDGMENT

In a certified true copy (CTC) seen by TheCable,  the supreme court in January 2023 ruled that the respondent (Ecobank) and the appellants (Anchorage Leisures Limited, Honeywell Flour Mills Plc and Siloam Global Services Limited) do not have a “contractual foundation”.

The apex court added that negotiations cannot be established outside agreement or contract, thereby the request by the appellants to seek a waiver or the demand by the bank to insist on an unagreed payment was never put into a written contract.

The court held, among other things, that the negotiations between the companies and Ecobank were inconclusive and there was not final agreement for a payment plan therefore, the companies remain indebted to Ecobank.

There was no determination as to the amount outstanding, but the court dismissed Honeywell’s appeal and ordered that the sum of N3 million be paid to the bank.

VERDICT

Although the Supreme Court determined that Otudeko’s companies owe Ecobank, it did not state any amount. Ecobank’s claim that the apex court ruled that there is a N13.5 billion debt is incorrect.