Home > News > Tribunal orders FCMB to pay N2.5bn decade old debt

Tribunal orders FCMB to pay N2.5bn decade old debt

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The Investments and Securities Tribunal, Abuja, on Wednesday, ordered First City Monument Bank Plc (FCMB) to pay the sum of N2.5 billion to a stock broking firm after a decade long dispute.

Judicial symbol for justice

Valueline Securities and Investments Ltd, who brought the bank before the tribunal, said the debt was from shares purchase fund allegedly misappropriated in 2008 by the defunct FinBank Plc with which FCMB merged in 2012.

The claimant joined SEC and CBN as respondents in the suit.

The matter had been handled by the Securities and Exchange Commission (SEC), Central Bank of Nigeria (CBN) and the Federal High Court over ten years without success.

The Chairman of the Tribunal, Hon. Siaka Idoko-Akoh, while delivering the judgment, said the Tribunal found FCMB liable and ordered the bank to pay the claimant an outstanding debt of N988.5million.

Other members of the Tribunal that heard the case were: Jude Udunni, Mamman Zargana, Edward Ajayi, Emeka Madubuike and Albert Otesile.

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Idoko-Akoh also ordered the bank to pay accrued interest calculated at 18 per cent as earlier directed by SEC.

He also ordered the bank to pay a penalty of N500, 000 to the claimant as cost of the legal action and a further 10 per cent interest as judgment debt.

The Tribunal said the mandate for FCMB to liquidate the debt was subsisting and also nullified the decision of SEC and CBN to vary the payment computation formula.

It clarified that the payment of 18 per cent interest was from August 22, 2013 until the date of judgment, and thereafter at 10 per cent post judgment until the final liquidation of the debt.

Maureen Onyuike, the claimant’s counsel, said her client, in 2008, applied for and deposited N2.5 billion to buy shares in the FINBank Public Offer.

However, she said at the end, her client was neither allotted the shares nor given back the money as expected.

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Onyuike said the claimant petitioned SEC after failing to get a refund.

She added that SEC investigated the complaint, found FINBANK culpable and ordered it to return the N2.5billion with 18 per cent interest per annum from September 23, 2008 until full liquidation.

She said when the bank failed to pay; SEC sought the intervention of the CBN at the time when FCMB and FINBank were planning a merger.

According to her, FCMB undertook to repay the indebtedness of FINBank and for its account with the CBN to be debited at source by CBN once the merger was approved.

FCMB’s counsel, Ogunmuyiwa Balogun, said his client paid the sum of N4.6 billion made up of the N2.5billion principal sum and N2.1billion accrued interest and believed the debt had been fully liquidated at that point.

The Tribunal, however, said based on evidence from veritable figures, FCMB still owed the claimant an outstanding unpaid balance of the sum of N988.5million and that interest would continue on the sum until fully paid.

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Source:: Vanguard