Japaul Operations Under Serious Threat
**As Access Bank Gets Court Order to Seize Properties
By Dipo Olowookere
If urgent steps are not taken, Japaul Oil & Maritime Services Plc, one of the companies listed on the Nigerian Stock Exchange (NSE), may not be able to conduct its normal business interests.
This is because Access Bank Plc, another publicly quoted firm, has obtained a Mareva judgment to virtually take control of the company.
In suit No: FHC/L/CS/29/19, Justice C. J. Aneke of the Federal High Court sitting in the Lagos granted the lender “An Order for the immediate Arrest and detention of the Vessels MV JAPAUL A TUGBOAT AND MV DOMINON (MV PINA) TUGBOAT, THE VESSELS JD-1 DREDGER and JD 11 DREDGER the 1st, 2nd, 3rd and 4th Defendants (the mortgaged properties) anywhere they may be found within the Nigerian territorial waters within the jurisdiction of this Honourable Court pending the hearing and determination of the substantive suit.
The judge also granted the bank, “An ORDER OF MANDATORY PRESERVATIVE INJUNCTION is made restraining the 3rd Defendant, JAPAUL MINES & PRODUCTS LIMITED, JAPAUL OIL & MARITIME SERVICES PLC AND PAUL ABIODUN JEGEDE, OWNERS OF JAPAUL A TUGBOAT AND MV DOMINION (MV PINA) TUGBOAT, THE VESSELS JD-1 DREDGER AND JD-11 DREDGER the 1st,2nd, 3rd, and 4th Defendants (the mortgaged properties) from registering any change or charges or mortgages to the ownership of the 1st and 2nd Defendants pending the hearing and determination of the substantive suit.”
In addition, the financial institution got, “An ORDER OF MAREVA INJUNCTION restraining the 3rd Defendant; JAPAUL MINES & PRODUCTS LIMITED, JAPAUL OIL & SERVICES PLC and PAUL ABIODUN JEGEDE, OWNERS OF JAPAUL A TUGBOAT AND MV DOMINION (MV PINA) TUGBOAT, THE VESSELS JD-1 DREDGER AND JD-11 DREDGER the 1st, 2nd 3rd and 4the Defendants herein, their agents, officers, assigns from operating the account maintained with the banks listed in schedule hereto including issuance of cheques, bank drafts, cash withdrawals or anything howsoever that would cause any sum of money to be removed from the said account pending the hearing and determination of the substantive suit.”
In a report, Proshare said, “The Mareva order made it impossible for the company to operate its accounts and sustain its activities as a going concern; the consequence of which threatened the jobs of hundreds of workers employed by the company.
“While this was at play, the listed company represented that it met its minimal requirements as a listed entity; yet the market was not availed of this information; especially as it relates to market being properly apprised of the situation and the potential contingent liabilities appropriately priced into market valuations. This is a matter we intend to interrogate in subsequent reviews on the development as it relates to the issue of market disclosure and corporate transparency.
“Far more pertinent must be the discovery that the company followed through on the complaint procedure put in place by financial regulators on matters of this type, as a means of market friendly resolution of banking excess charges with material consequence on profitability (including shareholder value). The firm represents that when such a formal complaint was made; the regulators advised them to “stay on the queue” as several cases of this nature was pending.
“This alleged response from a market regulator requires some deep reflections as it undermines the integrity of timely problem resolution mechanisms put in place to build confidence in the market and promote a veritable ‘ease of doing business’ climate.”
Japaul claimed in the court papers that it had approached Access Bank to complain about the exorbitant charges it noticed in its corporate account with the bank after an internal financial audit. The company requested that the excess charges be reversed and duly credited back into its account.
The bank declined and insisted that Japaul was in debt to the bank, and therefore, should pay up on its debt first.
While Japaul accepted indebtedness, it, however insisted that to keep the books clean and its records with the bank tidy; Access Bank should show good faith by conducting a reconciliation of the forensic report dated July 23, 2018 and reverse undisputed excess bank charges thereon; and use the amount credited to its account to (partly) offset amounts outstanding in respective of its loan.
The court papers showed no indication of this being done and indeed infers that Access Bank refused to oblige Japual’s request and went ahead to freeze the company’s account in December 2018.
This was further exacerbated when the bank, in response to the suit instituted by Japaul, approached another court in the same judicial division to seek for, and obtain an order to seize (arrest and detain) the assets (equipments) of the firm, freeze the account of the company and that of its Chairman and founder, Mr. Paul Abiodun Jegede on January 15, 2019.
The company subsequently sought redress in the same courts over what it saw as a breach of good faith between itself and its banker.
As a result of the legal confrontation, for four months (approx.) in 2019, Japaul and its Chairman were denied access to either the corporate account of the listed entity or/and that of the Chairman personally (having been a guarantor of the loan); thereby placing the company in dire operating conditions even while the substantive suit was yet undetermined.