Debt: Ecobank seeks to take over Zamfara’s fund in bank

By Abimbola Fashakin, Lagos

The management of Ecobank Nigeria Plc, has prayed a Federal High Court sitting in Lagos for an order allowing it to take over funds belonging to Zamfara State Government in United Bank for Africa (UBA) Plc.

The bank had recently initiated garnishee proceedings against UBA over an alleged N3.1 billion debt owed it by the state.

But, UBA, through its lawyer Alfred Uwaka filed a preliminary objection seeking to strike out an order nisi made by Justice Babs Kuewumi.

A order nisi is a court order that does not have any force, meaning Ecobank cannot access the funds unless a particular condition is met and the ruling becomes an order absolute (binding).

Uwaka contended that Ecobank failed to obtain the consent of Zamfara’s Attorney-General before initiating the garnishee proceedings.

“Failure to comply with the application for consent makes the order null and void,” he said.

Ecobank’s lawyer Mr Kunle Ogunba (SAN), however, urged the court to make the order absolute so that it can take over Zamfara’s funds in UBA.

He said the onus was on UBA was to show how much of Zamfara’s funds it had or not, adding that filing a preliminary objection was an admission that the bank indeed has Zamfara’s money.

“I submit that a garnishee who files a notice of preliminary objection contending that no consent of the attorney-general was sought has unwittingly admitted that it has the judgment-debtor’s funds.”

The senior advocate recalled that in a previous garnishee proceeding, UBA wasted no time in telling the court that Zamfara had no money in its account with the bank.

“If they (UBA) have no money belonging to Zamfara, why file a preliminary objection? The approach they have taken shows that the court was right to have granted an order nisi.

“Based on the procedure adopted by the garnishee, it has shown clearly that it has the funds. The money is there. We’re sure of our facts.

“We urge the court to make the order absolute against UBA,” Ogunba said.
Ecobank said the Zamfara’s Executive Council passed a resolution authorising its Finance Ministry to accept a loan, which was not repaid. In a bid to recover the loan, Ecobank sued the state.

The court, in a judgment, directed the Central Bank of Nigeria (CBN), the Ministry of Finance and Accountant-General of the Federation to deduct the amount from the money accruable to Zamfara from the Federation Account and remit it to Ecobank.

The state was also ordered to pay interest on the amount at 30 per cent per annum from March 1, 2013 when the suit was filed, until when judgment was delivered.

The court held that N3,159,017,740.71 was the outstanding indebtedness on a facility of N1.5billion extended to Zamfara State by Oceanic Bank Plc, which was consolidated with Ecobank.

Joined as defendants in the suit are: Zamfara Attorney-General, its Ministry of Finance, Federal Ministry of Finance and Accountant-General of the Federation.

Ecobank, last December 8, filed an application for an order nisi against UBA, compelling it to disclose fresh sums of money with the bank, which was granted.

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