Customer Seeks N4.1b from Union Bank Over ‘Illegal Charges’

By Dipo Olowookere

A real estate development company known as Coronation Real Estate Development Limited has renewed its battle with Union Bank over excess bank charges.

According to the Lagos Times, the firm is asking for a whooping sum of N4.1 billion as compensation from the lender.

The aggrieved company has filed a second amended statement of claim before a federal high court in Lagos alleging that Union Bank’s arbitrary interest, excessive charges, penal charges and illegal fees have resulted in the company suffering economic losses running into billions of Naira.

Court papers obtained by Lagos Times showed that the company had in April 2008 secured a N1.315 billion loan from the bank out of which only N1.217 billion was disbursed by the bank in 11 instalments. The loan facility was granted to finance the construction of a shopping/office complex at Asokoro, Abuja.

The company alleged that the bank not only neglected to release the full loan amount but also delayed the release of the instalment disbursements, thereby leading to delays in construction and skyrocketing costs.

However, in October 2012 the company secured a restructured loan of N1.277 billion to enable it complete the construction of the shopping and office complex which is located at Plot 3774 Cadastral zone, off Jimmy Carter road, Asokoro, Abuja.

Both the initial loan and the restructured loan were to be repaid through the sale of forms and deposits for rentals/leases of the shops/offices which are being maintained in a dedicated account with Union Bank. Coronation Real Estate Development Limited maintains that it has fully repaid the loan and is no longer indebted to the bank.

It alleges that in spite of this Union Bank has continued to impose arbitrary charges, excessive charges, penal charges and fees on the company’s facility account.

The company claims that investigations on its account and expert assessment and valuation of the property in Asokoro showed that the total loss incurred by the company due to incomplete disbursement, delays in disbursement and excess loan charges by Union Bank stands at N4.1 billion.

It is therefore seeking a judgement of the court declaring that the application by the defendant of arbitrary interests, excessive charges, penal charges and fees on the company’s facilities account with the bank is illegal, unlawful null and void, and an order of court compelling the bank to compensate it to the tune of N4.1 billion.

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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