Keystone Bank has officially taken over Bacita Sugar Company, previously known as Josepdam Sugar Company, due to the company’s failure to repay a debt of ₦25,358,203,258.09. The bank has appointed Mr. Yunus Abdulsalam (SAN) as the Receiver/Manager of the firm with immediate effect.

Legal Basis for the Takeover

This development follows an order from the Federal High Court in Ilorin, which authorized Keystone Bank to recover its outstanding debt from KIA Africa Group—the company that had acquired Josepdam Sugar Company.

The court also issued an order freezing 21 bank accounts belonging to KIA Africa Group to prevent further financial transactions.

In his ruling, Justice A. O. Awogboro declared:

  1. Recognition of Receiver/Manager Appointment: The court confirmed that, based on the Notice and Deed of Appointment dated December 30, 2024, Mr. Yunus Abdulsalam (SAN) is the legally appointed Receiver/Manager over the assets of KIA Africa Group. These assets were pledged as collateral for the loan facility obtained from Keystone Bank.

  2. Authority to Take Control: The Receiver/Manager is authorized to take possession, control, and management of all secured assets of the company, including those held under fixed and floating charges as collateral for the loan.

  3. Restraint Order: The court restrained KIA Africa Group, its officers, agents, representatives, and any associated parties from interfering with or obstructing the Receiver/Manager in the discharge of his duties. This order applies to all assets of the company, including the Josepdam Sugar Factory in Bacita, Kwara State.

  4. Law Enforcement Assistance: The Inspector-General of Police (IGP), Assistant Inspectors-General (AIGs), Commissioners of Police (CPs), and all relevant law enforcement officers were directed to support the Receiver/Manager in executing the court's orders.

  5. Bank Accounts Freeze Order: The court directed 21 Nigerian banks, including First Bank, Access Bank, Citibank, Zenith Bank, GTBank, UBA, Fidelity Bank, and others, to immediately freeze all accounts belonging to KIA Africa Group and its Managing Director, Kenneth Irihiogbe. These banks must confirm their compliance with this order through a sworn affidavit.

Keystone Bank’s Position on the Takeover

Speaking at the enforcement scene, a Keystone Bank representative confirmed:

“Keystone Bank has now taken full control of Josepdam Sugar Company in Bacita, Kwara State, following the failure of KIA Africa Group to settle its massive ₦25.3 billion debt owed to the bank.”

The representative further stated that the takeover was necessary to either manage or sell the company in order to recover the outstanding debt. The Nigeria Police Force has been directed by the court to enforce the bank’s takeover in all legal aspects.

Background: KIA Africa Group’s Failed Financial Commitments

KIA Africa Group had acquired Josepdam Sugar Company from the Assets Management Corporation of Nigeria (AMCON) and secured loan facilities from Keystone Bank to finance the acquisition.

  • Loan Agreement: The loan was structured with a 24-month repayment plan.
  • Bank Guarantee: KIA Africa also secured a ₦8,323,649,250.00 bank guarantee from Keystone Bank—equivalent to 75% of the outstanding balance payable to AMCON.
  • Collateral Terms: Keystone Bank approved the guarantee on the condition that KIA Africa would deposit the company’s title documents with the bank upon receiving them from AMCON. Additionally, the Managing Director, Kenneth Irihiogbe, provided a personal guarantee for the loan.

However, KIA Africa failed to meet its repayment obligations and did not deposit the required title documents, further worsening its financial liabilities.

Keystone Bank’s Debt Recovery Strategy

After multiple failed attempts to recover the debt, and with the total outstanding amount escalating to ₦25.3 billion, Keystone Bank exercised its legal right under the Debenture Deed to take control of all assets belonging to KIA Africa Group, including Josepdam Sugar Company.

Under the leadership of CEO Mr. Hassan Imam, Keystone Bank has intensified efforts to recover debts from defaulting borrowers, demonstrating an aggressive stance on financial accountability.

KIA Africa Group’s Initial Plans for the Sugar Company

In 2021, KIA Africa Group had announced its acquisition of Josepdam Sugar Company, outlining ambitious plans to revamp the factory. The company stated:

“With 30,000 hectares of land, including 5,600 hectares of developed farmland for sugarcane production, an installed milling capacity of 40,000 tons for refined sugar, an ethanol production plant, and new mill and power equipment ready for installation, Bacita Sugar Company was poised to become a major player in Nigeria’s sugar industry. Our commitment aligns with the government’s sugar sufficiency and backward integration policies. The KIA Africa Group was ready to make this happen.”

However, these plans failed to materialize as the company defaulted on its financial obligations, leading to the court-ordered takeover by Keystone Bank.