An aggrieved customer of Diamond Bank Plc, News Engineering Nigeria Limited, has dragged the bank before a Federal high court in Lagos South West Nigeria over an alleged imposition of illegal charges and arbitrary penalty on its account with the bank, contrary to Central Bank of Nigeria Monetary, Credit, Foreign Trade and Exchange Policy and regulations
The company is also alleging that being a company involved in the construction of sub-stations and transmission lines for electricity generation in Nigeria, therefore the effort of the Federal Government of Nigeria towards ensuring steady power supply of electricity to Nigeriasn may be further jeopardized if the bank is allowed to go ahead and frustrate the company from completing its on going power projects.
In a statement of claim filed before the court by Barrister Sylva Ogwemoh (SAN), the company alleged that being an electrical engineering construction company, it won the National Integrated Power Project, (NIPP)132/contract for the construction of sub-stations and Transmission lines in Awka, Anambra State; Alausa in Lagos and Oke-Aro in Ogun State
Because of the huge amount of money required to execute the projects and in view of the cordial relationship existing between the company that spans over seventeen years, the company transferred the project financial transactions to the bank when the company was required to establish a standby Dollar facility to finance back- to-back letters of credit for foreign suppliers of off-shore equipment for National Integrated Power Project (NIPP) lot 7 project. The said standby letters of credit were initially established for 6.5 million Dollars and later upgraded to 9 million dollars.
The company and the bank also entered into other facilities denominated in Nigerian Naira for the execution of rural electrification projects awarded to the company in Ebonyi and Sokoto States.
By the letter of credit facilities executed by the company and Diamond bank, repayment of the facility under the letters of credit transaction was to be derived from the proceeds of contracts and documentary letter of credit from the Niger Delta Power Holding Co. Project
The company avers that upon executing the letters of Offer of credit Facilities, the bank deliberately delayed the disbursement of release of funds for the execution of the projects for which the facilities were sought and thereby caused the company to incur additional costs and looses. Despite deliberate failure of the bank in promptly releasing funds after fulfillment of condition precedent to disbursement, the company still fulfilled its obligation to repay the facilities until such a time the bank manipulated and frustrated the process with excess and illegal charges computed and debited to its account.
The company avers that it became convinced of the manipulations of the bank despite consistently repaying the loan to the point when the wrongful and illegal charges and repayment eroded its working capital, the outstanding payment on the account as alleged by the bank never got reduced but instead kept rising astronomically.
The bank was then accused of operating the company’s account in violation of the extant laws and CBN policies, directives and guideline regulating credit facilities transaction, while the bank deliberately failed to provide the company with periodic statement of account in order to ensure that the company did not immediately become aware of the illegal charges and interests debited into its account. The bank was alleged to have taken advantage of the fact that the company was in dire need of fund to execute its capital Intensive projects and therefore incorporated non-existent and illegal fees into the transaction in bad faith.
The company had meetings with the officials of the bank in which request was made for the reversal of the spurious debt after a reconciliation of the account by team of Auditors of both parties, but this request was rebuffed by the bank, rather the bank has been putting serious pressure on the company compelling it to pay the disputed spurious and illegal charges in the sum of N1,876,810393.75 computed indiscriminately into its accounts.
The company also alleged that, in an effort to free itself from the bank’s frustrating and illegal acts, it appointed a company, Panafrican Capital Plc, as its financial consultant to advise and mediate between it and the bank, but all effort made by the said Panafrican Capital Plc to get the bank to reverse the interests wrongfully debited by the bank was frustrated by the bank.
Rather than the bank performing its fiduciary duty to the company, the bank is making plans to hurriedly appoint receiver/manager who will take over all assets of the company and ground the company by selling off all its assets to recover non-existent debt which the bank has refused to submit for reconciliation.
The company reiterates that it has paid a total sum of N2.3 billion in repayment of the credit facilities it obtained from the bank therefore is not in any way indebted to the bank. Consequently, the company averred that being one of the companies in Nigeria involved in the construction of sub-stations and transmission lines for electricity generation and distribution in Nigeria, the effort of the Federal Government of Nigeria will be further jeopardize if the bank is allowed to go ahead and frustrate the plaintiff from completing its project over unfounded and disputed claim.
The company while claiming the sum of N50million as general damages, is also urging the court to declare that all interest, charges, fees, costs and penalty arbitrarily computed into its accounts by the bank contravene CBN regulations therefore null and void. The company is also seeking an order of the court declaring that the bank is in breach of its obligation and fiduciary duty to the company.
Diamond bank has not filed any defence in this case.