Wednesday 19 July 2023

Court Awards Otudeko's Honeywell Flour Million N72 Billion Against Ecobank

Honeywell Flour Mills Plc has been awarded N72 billion in damages against Ecobank 

The Federal High Court in Lagos ruled that Ecobank denied Honeywell the use of its funds to run its business 

The dispute, which began in 2015, is regarding an N3.5 billion debt obligation owed Ecobank by the company 

The Federal High Court has delivered a judgment favoring Honeywell Flour Mills Plc in a lingering suit against Ecobank Nigeria, awarding it N72 billion. 

Per the details of the court proceedings, Justice Mohammed Liman of the Federal High Court in Lagos said in his ruling on Tuesday, July 18, 2023, that the plaintiff was denied the use of funds in his account based on an ex parte order given in favor of the defendant. 

In 2018, Honeywell filed a suit claiming N72 billion in damages from Ecobank for losses incurred due to an asset-freezing ex-parte order. 

The claims include foreign exchange devaluation loss, interest on utilized cash balance, loss of revenue, and aggravated and exemplary damages.

The legal struggle between the financial institution and Honeywell began in 2015 due to a dispute over terms of settlement of debt, which Honeywell owed Ecobank. 

According to Honeywell, it had settled its outstanding debt to Ecobank, having fulfilled its part of an agreement with the bank to pay N3.5 billion as a complete and final payment of the firm's obligations. 

Ecobank, on the other hand, claimed that the agreement was not binding on it as its Board of Directors was yet to ratify the deal, which was transmitted to Honeywell by its Managing Director. 


The bank also claimed that the payment was not made within the stipulated timeframe and sought a resolution of the issue. 

Honeywell, however, sought the intervention of the Chattered Institute of Bankers of Nigeria (CIBN) Sub-Committee on Ethics and Professionalism in resolving the matter. 

At the end of the review of the arguments presented by the parties, the court ruled in Honeywell's favor, resolving that the N3.5 billion payment was the full and final payment of its obligations to Ecobank and that the firm was not indebted to Ecobank. 

Ecobank, however, told the company through correspondence that it was still indebted to the bank and also stated that the company's name is in the credit risk list of the Central Bank of Nigeria for non-performing loan accounts. 

Honeywell, therefore, approached the courts to effect the decision reached by the Bankers' Committee. The company is now claiming damages based on the order of Justice Yunusa, asserting the move was created to injure Honeywell's business and embarrass principal officials of the firm. 

Ecobank said it would appeal the court's ruling. 

Honeywell Flour Mills is owned by billionaire investor, Oba Otudeko who emerged as the biggest shareholder in First Bank after acquiring 4.7 billion shares of the bank, accounting to13.3%. 

Otudeko's share acquisition reportedly set off a lingering feud between the three biggest shareholders in the bank, Femi Otedola, Tunde Hassan-Odukale and Otudeko. 

The shares of First Bank has taken a hit as investors avoid them allegedly due to current fiasco. 

Ecobank Nigeria Limited has issued a written communication to FBN Holdings Plc, the parent company of First Bank of Nigeria Limited, requesting a temporary suspension of proceedings concerning the acquisition of 4.77 billion shares by Dr Oba Otudeko, Chairman of Honeywell Group. It is worth noting that last Thursday, Honeywell Group, led by Oba Otudeko, made a substantial purchase of 4,770,269,843 company shares through a cross-deal, amounting to N87.8 billion. This transaction stands out as the largest volume of First Bank shares traded in a single day since 2012 when the stock exchange began publishing data. 

No comments:

Post a Comment