Stanbic IBTC Bank Plc, is once again swimming in troubled waters over an alleged breach of contract involving a limited liability company, Infinity Snacks and Beverages Limited.
In a statement of claim filed before a Lagos High Court by a lawyer, Barrister Olumide Sofowora (SAN), Infinity Snacks and Beverages Limited alleged that in July 2014, it applied for a loan for its factory expansion from Bank of Industry Limited and it received approval for the sum of N934, 029, 835 on 19thAugust, 2014. However one of the conditions for granting of the facility was the provision of a bank guarantee.
The statement claimed that the company then requested Stanbic IBTC Bank to start processing the bank guarantee. Apart from the unnecessary delay exhibited by the bank, the court statement reads, the bank requested that before the bank guarantee could be provided, the company should clear one of the existing loans to the tune of N50 million, all other outstanding loans and interest due to the bank should be noted on debenture. The company reportedly satisfied all these requirements yet the bank guarantee was not issued until 22nd December 2015, four months after the approval of the loan by Bank of Industry.
Thereafter, we heard, Bank of Industry disbursed the sum of N864, 420, 000 into the bank’s account in the company’s name on 9th May, 2016 but Stanbic Bank did not inform the company until 17th May 2016.
“The company, ensuring that the loan was utilized, then mandated the bank to bid for foreign exchange for the purchase of the needed machinery for its expansion. Initially, the bank continued to put stumbling blocks along the way by tying the Bank of Industry loan to its own loan portfolio granted to the company, later when the bank agreed to bid for the needed foreign exchange, it said that there was no foreign exchange supply in the market, only for the company to discover that the bank’s promises to secure foreign exchange for the company were all ploys to frustrate the company from benefiting from the Bank of Industry facility of N864.420 million because, apart from bidding for and obtaining foreign exchange for some of its customers who applied for foreign exchange during the same period as the company did, the bank was discovered to be supporting one of the company‘s competitors, Multipro Enterprises Limited which is the Franchisee of Kellogs Breakfast Cereals in Nigeria, and it turned out that the bank actually applied for the same Bank of Industry facility as the one granted to Infinity on behalf of Multipro,” the statement claims.
The company is thereby contending that the delay on the part of the bank to provide the bank guarantee, caused the company severe loss as the rate of foreign exchange to the Nigerian currency rose drastically during the period due to Federal Government deregulation of foreign exchange market. Aside that ,the bank unilaterally increase the bid rate from N280 to $1 to N288 to $1.
The company also alleged that StanbicIBTC bank breached its duty of care to it and committed several other breaches of contact due to negligence by its refusal to carry out the company‘s several instructions and by its decision to place a lien on the company‘s funds which amounts to an unauthorized freezing of the company’s account without lawful authorization and trading with N 864.420million meant for the expansion of the company’s business for several months without payment of any interest whatsoever.
The company said it held meeting with the bank with a view to placing the N864.420millon in an interest yielding account, the bank promise to revert to the company on the issue but it never did and kept silent on the matter permanently. The company also contended that, by promoting the business of the company’s competitor whilst frustrating the company business, the bank has breached its fiduciary duty to it since in a banker/customer relationship the banker is regarded as agent of the customer.
Consequently, in view of the alleged several breaches of the bank in its duty care to the company, the company is demanding for special damages in the sum of N2,076,801,430.42. Infinity Snacks and beverages Limited company is also urging the court to declare that by promoting the business of the company’s competitor whilst frustrating its own business which led the company to sustain losses in its business, the bank has breached its fiduciary duty to the company thereby entitling it to damages.
The defendant has yet to file any defense. Meanwhile the presiding judge, A. M. Lawal has adjourned the suit till 5th June, 2017, for mention.
-Arthur Richard
