Bank Renews Legal Battle Against Businessman, Otunba Abioye Over N346 Million Debt

A debt recovery suit N346, 798,405.96 instituted against a Lagos business man Otunba Ayoola Abioye and his company BSS Steel Rolling Mills limited (pictured) by Guaranty Trust Bank Plc has taken a new twist as the bank has filed an appeal against the ruling of a Federal High court vacating the order made by the court to preserve the assets of the company by the Receiver manager pending the final determination of the suit.
In addition, the bank has equally filed an application before the court, urging it to restrain Otunba Ayoola Abioye or his privies from executing or taking advantage of the ruling of the court in taking steps that will prejudice the constitutional right of the bank to approach the court of appeal to hear and determine the appeal already lodged at the court for adjudication.

According to an affidavit sworn to by an officer of Guaranty Trust Bank, Mr. Soga Adewale and filed before the court by a Lagos Lawyer, Mr. Morrison Quakers (SAN), the deponent averred that by offer letters dated 11th of May, 2009, 30th June  2009 and 2nd March 2010, Guaranty Trust Bank Plc at the request of Otunba Ayoola Abioye granted various loan facility totaling N400 Million for the importation of iron rods into the country. The tenor for the repayment of all the facilities was two years inclusive three months’ moratorium.

The loan facilities were secured by an all assets Deed of Debenture over all the fixed and floating assets of BSS steel rolling mills limited, Tripartite legal mortgage on Property located at 25 Sehinde crescent, Oshodi Lagos state owned by Ayoola Abioye who is the Vice chairman of the BSS company, Tripartite legal mortgage over a five bedroom duplex located at 24C Victoria Garden city Victoria Island, Lagos state, Tripartite legal mortgage over a property owned by one Samuel Ariyo situated at 191 Igbosere road Lagos, and personal Guaranty of Otunba Ayoola Abioye for the full facilities and accrued interest thereof.

However, Mr. Adewale averred further that upon drawn down of the loan facilities, the company started defaulting in its repayment obligation to the bank and could not meet up with its obligations therefore having an indebtedness of N346,798,405.96 as at January 2012 while interest continues to accrue on the principal and interest.

In view of the defendant’s failure to pay its debts, the bank appointed Mr. Morrison Quakers (SAN) as a receiver Manager to take over and preserve the assets of BSS steel rolling mills covered by the Deed of Debenture to enable the bank realized the debt owed by the company as the bank believed that the company is insolvent, unprofitable and cannot repay its debts, and unless the charged asset of the company is realized the debt may not be paid as the second defendant being the alter ago of the company has also failed in his responsibility in liquidating the debt of the company.

However, in a counter affidavit sworn to by Otunba Ayoola Abioye, he denied almost all the allegations of Mr. Soga Adewale and stated that the N400million loan granted by the bank were for different purposes and at different times and that it is not true that as at January 2012 the company had defaulted so much that it had an indebtedness of N346, 798,405.96.

Otunba Abioye averred further that forensic analysis of all the payments made by the company were examined and it was shown that the bank overcharged the company to the tune of N248, 779, 903.99, therefore he is not personally indebted to the company and he is ready to contend at the hearing of this suit.

Meanwhile the presiding judge Justice Muhammed Idris has adjourned till 6th of June 2014 when hearing of the suit will commence.

After the ruling of the court it was alleged that Otunba Abioye’s property, which  was under lock and key had been forced open by the defendants without recourse to the court to do so.

May 22, 2014