Payment of N2.5bn Judgment Debt Won’t Affect Profitability—Stanbic IBTC

By Dipo Olowookere

Recently, a supreme court in Nigeria struck out the suit filed by Stanbic IBTC Bank Plc, a subsidiary of Stanbic IBTC Holdings Plc, challenging an appeal court ruling, which directed the lender to pay a certain sum to a company known as Longterm Global Capital Limited.

In 2010, a Federal High Court sitting in Lagos, had in a suit no FHC L/CS/1491/2009: Longterm Global Capital Limited & Mr Patrick Akinkuotu vs Stanbic IBTC Bank Plc, granted the prayers of the company against the bank, which Stanbic IBTC Bank appealed at the appellate court.

Business Post gathered that on April 11, 2007, the appellant granted an overdraft facility of N600 million to Longterm Global Capital for a tenor of 365 days and an option to roll over amongst other terms.

Subsequently, on May 11, 2007 and July 17, 2007, the appellant granted two additional overdraft facilities CEO of Longterm Global Capital, Mr Patrick Akinkuotu in the sum of N400 million and N250 million respectively for tenors of 365 days and with options to roll over amongst other terms.

At the expiration of the overdraft facilities granted to the respondents, the appellant granted an extension to them to liquidate the facilities, with Mr Akinkuotu applying that the facility granted to him be merged with that of his firm.

The respondents alleged that they had liquidated the overdraft facilities granted them by the appellant and in consequence of the appellants’ refusal to release the respondent’s shares pledged for the overdraft facilities granted, the respondents instituted a suit at the Federal High Court, Lagos Division and won.

When the matter got to the Court of Appeal, Stanbic IBTC Bank lost again and then headed to the Supreme Court, where it was directed to pay the sum of N2.5 billion to the respondents.

In a statement on Friday, the parent company of the bank said the respondents have been paid the judgment debt, but this will no way affect its liquidity and profitability.

“Stanbic IBTC Bank has discharged its liability under the judgment by paying the judgment sum of N2.5 billion to the judgment creditors.

“We would like to assure all our esteemed stakeholders that, as required by IFRS, our banking subsidiary had made a full provision for this judgment since 2013.

“Accordingly, the payment of the judgment sum has no impact on our banking subsidiary’s current liquidity position and profitability,” Stanbic IBTC Holdings said in the statement.

Dipo Olowookere is a journalist based in Nigeria that has passion for reporting business news stories. At his leisure time, he watches football and supports 3SC of Ibadan. Mr Olowookere can be reached via dipo.olowookere@businesspost.ng

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