Guaranty Trust (GT) Bank is known, on the international front, for staging some of the biggest fashion and entertainment events in Nigeria (GTBank Fashion Weekend included) and flying some of the most prominent talents globally to speak/perform in Lagos. On the continent, they are known as one of Africa’s leading banks offering “Online/Internet Banking, Retail Banking, Corporate Banking, Investment Banking and Asset Management services.” Three days ago, the bank’s reputation took a hard hit when the Economic and Financial Crimes Commission (EFCC) confirmed they had arrested Innocent Chukwuma, Africa’s first and leading automobile maker over his dispute with the bank and his company, INNOSON.
Briefly, for AML readers wondering, we are in the territory of secured transactions i.e. a borrower acquires a loan or credit from a lender. The lender in exchange acquires an interest (a security interest) in collateral (house, car, business assets such as property etc.) that the borrower has. The security interest also gives the lender the power, if the borrower defaults on payment, to foreclose or repossess the collateral.
In this case, Mr. Chukwuma who is also a borrower from GT Bank, alleges that GT Bank illegally charged him bank fees totally about 780 million Naira. Once he discovered this discrepancy and made contact with the bank, the bank acknowledged it but claimed they only owed him 560 Million Naira. Further, they wanted to pay him back at an interest rate of 7%. He informed the bank that when they loaned him money for his business, they charged him at a 22% interest rate. Therefore, he was only willing to accept a 22% interest rate, or in the alternative, equity shares in the bank, effectively making him a shareholder. The bank declined his counteroffer. So, he sued the bank at the Federal High Court Level (lower trial court) in Nigeria, and won. The bank appealed the trial court’s ruling but lost the appeal. The bank then decided to take the case to the Supreme Court and the case remains pending before that court.
He also says he had a separate case that he won against the bank where the bank was ordered to pay him about 2 billion naira. They did not. The bank appealed the second case and again lost, despite the bank filing a motion and petitioning the court that it would be bankrupt if it paid Chukwuma what is now a sum of 8 billion naira allegedly owed to him. The bank has also now taken the second case before the Supreme Court.
Chukwuma says the bank tried to defame him with unsubstantiated allegations of fraud, and now had him arrested through the EFCC.
The case has attracted attention across the continent and in the diaspora.
Here is all you need to know about the bitter dispute between the two from each side, and law enforcement, as the story continues to unfold.
INNOSON COMPANY BACKGROUND
EFCC’S STATEMENT ANNOUNCING THEY ARRESTED MR. CHUKWUMA | 12/19/2017
EFCC Arrests Innocent Chukwuma (Innoson)
A well known industrialist Chief Innocent Chukwuma popularly known by his company’s name, INNOSON, has been arrested by the Economic and Financial Crimes Commission, EFCC . He was picked up at about 11am at his Savage Crescent , GRA Enugu residence today Tuesday December 19, 2017.
His arrest followed his refusal to honour invitation by the Commission having earlier jumped an administrative bail granted him in a case being investigated by the Capital Market and Insurance Fraud Unit of the Commission’s Lagos office.
Chukwuma rather than honoring invitation by the EFCC, mobilized six truck loads of thugs pretending to be staff of his company to his residence, where they manhandled EFCC operatives. It took reinforcement from the Enugu office of the EFCC to effect the arrest of the industrialist who is currently being grilled by a team of investigators.
EFCC PARTIAL STATEMENT REGARDING THE RELEASE OF MR. CHUKWUMA | 12/20/2017
“…Unfortunately the industrialist resisted arrest and stirred controversy by bringing six truck-loads of thugs to block the entrance to his Plot W1, Industrial Layout, Abakaliki Road, Emeni, Enugu, home. This was after he initially misled the Police Command by informing them that his home had been invaded by armed robbers and kidnappers despite the fact that operatives of the Commission duly identified themselves to policemen guarding his home.
His unruly thugs encircled and manhandled operatives of the Commission who had gone to effect the arrest. Consequently, a distress call was sent to the Commission’s Enugu Office for reinforcement.
In all of this, the Commission’s operatives acted with decorum and civility. No one was manhandled or assaulted by the EFCC team, and not a single shot was fired, despite the provocation.
Chief Chukwuma and his brother, Charles Chukwuma (who is still at large), are being investigated by the Insurance and Capital Market Fraud Section of the Commission’s office in Lagos over matters bordering on N1, 478, 366, 859.66 fraud and forgery. The industrialist, among other infractions, allegedly used forged documents to secure tax waivers…”
MR. CHUKWUMA REJECTS BAIL AND SPEAKS THROUGH HIS COMPANY REPRESENTATIVE | 12/21/2017
Dr Innocent Chukwuma (OFR) was this evening released by Economic and Financial Crimes Commission. He initially refused to leave their premises because the Commission did not officially communicate to him why he was arrested like a common criminal.
After carefully reading through the Commissions Press release on their Official Facebook page tonight, we deem it fit to tell Nigerians who has stood and supported Dr Innocent Chukwuma in no small measure during his unjust detention by the EFCC the truth and our own side of the story.
1. First and foremost, We reiterate that EFCC’s claim that they invited Dr Innocent Chukwuma (INNOSON) and he refused to honour same invite as false. We urge them to show Nigerians dated proof that he was duly invited by the Commission. Dr Chukwuma is a man of impeccable character and a law abiding citizen. He will never disrespect or disregard a constituted authority.
2. The Commissions claim that that Dr Chukwuma resisted arrest is laughable. His residence was raided at 5am. They don’t expect him to run out and hand himself to whoever it was that came for him. He waited to be sure about the identity of the people that invaded his premises before coming out. Dr Chukwuma has nothing to hide or be afraid of.
3. EFCC alleged that Dr Chukwuma hired Six truck-loads of thugs to manhandle operatives of the Commission. This is preposterous. The people that invaded Dr Chukwuma’s residence were armed to the teeth. How can people without arms attack fully armed operatives of the commission?
The supposedly thugs are well meaning Nigerians who are making an honest living from Innoson Group. They merely came to protest and show solidarity to their Chairman who was about being whisked away in a gestapo styled arrest.
The commission also claimed no single shot was fired despite the provocation. This is a figment of their imagination. This is a clear deviation from the truth. Innocent protesting workers were teargased. We have images to back up this claim.
4. The Commission said Dr Innocent Chukwuma and his Brother Mr Charles Chukwuma is being investigated for forgery. Can they show Nigerians a dated Petition to them and who the petition came from.
5. Finally, We would like Nigerians to know that we have a dispute with Guarantee Trust Bank which arose from a business deal that went wrong. This case is on final appeal at the Supreme Court. We won’t want to comment on this because it will be subjudice to do so.
We implore everyone to wait till The Judiciary which remains the final arbiter to adjudicate and give their judgement in this matter.
We have been harassed and extremely provoked as a company since this issue arose but we have kept faith in our Legal system.
For Innoson Group:
Head Corporate Communications
MR. CHUKWUMA’S STATEMENT UPON RELEASE | 12/22/2017
”May I use this opportunity to express my gratitude to fellow countrymen who stood by me in this period of my Illegal arrest by EFCC.
Firstly, I want to thank Mr President, His Excellency, President Muhammadu Buhari, GCFR for his believe in the rule of law. I thank also the various State Governors who condemned my illegal arrest and fought to see my release.
I also thank the distinguished members of the National Assembly for their support in voicing out my illegal arrest, the traditional rulers across the divide from the North to the South, your support and contribution to my release is well noted. Thank you.
To all the Media organizations, various human rights groups, the youths, the #FreeInnoson social media crusaders and everybody who gave a voice to condemn my illegal arrest, thank you all.
I still maintain that my arrest was illegal, as there was never a period that EFCC under the leadership of Ibrahim Magu invited me for any reason. In due time, I will tell Nigerians the whole truth about this matter. I intend to work faithfully with the EFCC on this alleged investigation so as to clear my name which has been badly damaged, and I will follow up this so called investigation to its logical conclusion.
Once again, thank you my fellow Nigerians, with this high level of support and love showered on me during this period of my travail, I reiterate my strong resolve on the robust industrialization project of our dear nation, which will make her truly great again. I thank you all once more for your support”
MR. CHUKWUMA GRANTS VIDEO INTERVIEW AND SHARES HIS VIEW</strong
THE NIGERIAN SENATE GETS INVOLVED AND DEMANDS AN INVESTIGATION
THE BANK’S ALLEGED 40 POINT STATEMENT SHARED WITH BLOGGERS AND THE PRESS || 12/21/2017
1. GTBank has stated they are not behind Innoson Motors CEO, Innocent Chukwuma’s arrest.
2. Rather, the EFCC has announced they arrested Innocent Chukwuma over a N1.4bn fraud and usage of forged documents to secure tax waivers.
3. True story how Innoson vs GTBank war started: In 2009, GTBank granted Innoson several credit facilities (i.e loans) totalling N2,400,000,000,00 (two billion, four hundred million Naira only), to part finance working capital requirements, import new motorcycles and motorcycle spare parts, agricultural spare parts and plastic manufacturing equipment (“Imported Goods”).
4. Under the loan terms agreed by Chief Innocent Chukwuma on behalf of Innoson, proprietary interest in the Imported Goods was consigned exclusively in favour of the Bank. This means that the Bank was the exclusive owner of the Imported Goods. Accordingly, the original shipping documents (i.e. the Bills of Lading) were in the custody of the Bank, and have remained in the custody of the Bank at all times.
5. Because GTBank was the exclusive owner of the imported goods, ownership of the goods could only be transferred to Innoson (or any other third party) by the Bank. The condition in the agreement between the Bank and Innoson, for the release of the Imported Goods by the Bank to Innoson, was the payment of 25% of the value of each Letter of Credit transaction by Innoson.
6. Innocent Chukwuma approached the Bank, on behalf of Innoson, requesting the release of the shipping documents without payment of the agreed+ 25% equity. The Bank declined his request as a result of Innoson’s failure to meet the agreed conditions.
7. It came to the Bank’s knowledge sometime in June, 2011 that the Imported Goods for which the Bank declined to release shipping documents to Innoson in view of its failure to meet the agreed conditions, had been fraudulently procured by Innoson.
8. The Bank discovered that Innoson, under the control of Dr. Innocent Chukwuma had forged the Bank’s endorsement on the bills of lading to the Shipping Line and fraudulently cleared the Imported Goods which were in the name of the Bank.
9. The Imported Goods, being property of the Bank should not have been cleared from the Port without the original shipping documents being endorsed by the Bank in favour of Innoson, or any third party.
10. The signatures of 4 (four) staff of the Bank, to wit, Taofeek Olalere, Dan Attah, Bunmi Adeyemi and Amazu Amalachukwu, as well as the Bank’s stamp were forged on all the shipping documents used by Innoson to fraudulently clear goods at the port.
11. The Bank did not at any time endorse or transfer the shipping documents to Innoson, as the originals of each of the relevant Bill of Lading remain in the Bank’s custody to this very day.
12. When the Bank reported the matter to the Nigeria Police, Dr. Innocent Chukwuma claimed the Bank released the shipping documents to him.
13. Consequently, the Police commenced investigation into the Bank’s complaint, including a forensic examination of the disputed signatures, and established that the signatures of the Bank’s staff were forged, and the Imported Goods were fraudulently cleared from the Nigerian Ports Authority by Dr. Innocent Chukwuma and his accomplices.
14. Police investigations confirmed that Innoson and Dr. Innocent Chukwuma deliberately set out to defraud, steal from the Bank and convert the Imported Goods belonging to the Bank by deceptive means and through forgery and misrepresentation.
15. The unlawful takeover of the Imported Goods, which served as the Bank’s collateral, left an indebtedness in excess of the sum of N1,654,481,895.04 (one billion, six hundred and fifty four million, four hundred and eighty one thousand, eight hundred and ninety five Naira, four Kobo) as at September 26, 2012.
16. Chief Innocent Chukwuma was arrested and interrogated by operatives of the EFCC, following which he agreed to make monthly payments into Innoson’s account until the full liquidation of Innoson’s indebtedness to the Bank.
17. However, Innoson defaulted in making the agreed payments.
18. Investigations by the Nigeria Police following a petition by the Bank in September 2013 also found Innoson and Chief Innocent Chukwuma culpable of the criminal allegations levied against them by the Bank, and Chief Innocent Chukwuma was accordingly charged to court by the Police.
19. The Police filed Charge No. FHC/L/565C/2015-Inspector General Of Police And Innoson Nigeria Limited; Innocent Chukwuma; Charles Chukwuma; Maximian Chukwura; Mitsui Osk Lines; Annajekwu Sunny for fraudulent clearance of goods, forgery, conversion, stealing and conspiracy presently pending before Faji J, at the Federal High Court, Ikoyi and adjourned to November 21, 2017 for arraignment/or hearing of motion for issuance of Bench Warrant.
20. What Innoson did next – Innoson approached the Bank for a reconciliation of his account and pleaded for a debt forgiveness.
21. A reconciliation was carried out on the account – which had a debit balance of N1,654,481,895.04 as at December 31, 2011. In the spirit of amicable resolution and EFCC intervention, the Bank said it agreed to forego the sum of N559,374,072.09 which represented default charges that has accrued on the account and debited in line with the loan agreement between the customer and the Bank.
22. Based on this, the Bank decided to accept from the customer, the sum of N1,095,107,822.95 as full and final payment of the customer’s indebtedness to the Bank, provided that same shall be fully paid not later than (30) days from the date of the letter written to him.
23. Surprisingly, Innoson commenced suit no:FHC/AWK/CS/2012 against the Bank at the Federal High Court, Awka stating the bank had debited its account with excess charges totalling N559,374,072.09 and obtained judgement in excess of N4.7Billion against the Bank.
24. Again choosing to dishonour an agreement that was amicably reached between him and the Bank for a full and final settlement of N1,095,107,822.95 wherein the Bank graciously forgave him the sum of N559,374,072.09 which accrued on his account during the period which he abandoned his account.
25. To further stall the criminal proceedings against him, Chief Innocent Chukwuma and his company instituted suits at the Federal High Court, Abuja, as well as the Federal High Court, Awka in January 2014 against The Inspector General of Police, The Nigeria Police Force and Investigating Officer(s), seeking declaratory and injunctive reliefs, including orders restraining the Police from commencing criminal proceedings against Innoson and Chief Innocent Chukwuma.
26. Furthermore, in a bid to stall the Bank’s recovery steps, and distract the Bank from focusing on the criminal action, as well as civil actions filed for recovery of the debt, Chief Innocent Chukwuma and his company Innoson, have continued to institute various spurious suits before various courts, claiming frivolous and outrageous sums against the Bank.
27. What EFCC is Saying – they have released Nnewi, Anambra-State born Industrialist, Chief Innocent Chukwuma on bail.
28. ”The business man who runs a local auto assembly plant was arrested on Tuesday December 19, 2017 at his Enugu residence, following his refusal to respond to invitations by the Commission, after initially being granted administrative bail by the Commission, while his surety could also not be found.
29. “Unfortunately the industrialist resisted arrest and stirred controversy by bringing six truck-loads of thugs to block the entrance to his Plot W1, Industrial Layout, Abakaliki Road, Emeni, Enugu, home.
30. “This was after he initially misled the Police Command by informing them that his home had been invaded by armed robbers and kidnappers despite the fact that operatives of the Commission duly identified themselves to policemen guarding his home.
31. “His unruly thugs encircled and manhandled operatives of the Commission who had gone to effect the arrest. Consequently, a distress call was sent to the Commission’s Enugu Office for reinforcement.
32. “In all of this, the Commission’s operatives acted with decorum and civility. No one was manhandled or assaulted by the EFCC team, and not a single shot was fired, despite the provocation.
33. “Chief Chukwuma and his brother, Charles Chukwuma (who is still at large), are being investigated by the Insurance and Capital Market Fraud Section of the Commission’s office in Lagos over matters bordering on N1, 478, 366, 859.66 fraud and forgery.
34. ‘The industrialist, among other infractions, allegedly used forged documents to secure tax waivers.”
35. After Innoson Motors’s CEO, Innocent Chukwuma was arrested, his company took the battle to social media. Immediately, numerous sponsored social media campaigns against the Bank such as #BewareOfGTBank and #WhatIsWrongWithGTBank sprang up.
36. The company Innoson also went on Television, with its owner, Dr Innocent Chukwuma granting an interview to TVC, where he claimed he had obtained a judgement of N8bn against the bank. He added that the bank pleaded with him over their inability to pay, and that he graciously offered to accept shares of the bank as payment.
37. GTBank on their part has chosen to remain silent on the matter, perhaps trusting in the integrity of the legal system.
38. A staff of the bank who spoke under anonymity, stated: “Irrespective of the issues we are facing with the company, Innoson remains a customer of the bank and we owe him a duty of confidentiality and to conduct ourselves in a responsible manner towards him”.
39. In responding to Innoson’s motion for a stay of criminal proceedings at the Court of Appeal, the Honourable Justice J.S Ikyegh on September 17, 2017 dismissed the motion for being unmeritorious and ordered that proceeding in the criminal case against Innoson should proceed.
40. On October 12, 2017, the Police through its Charge No. FHC/L/565C/2015- filed an application for the issuance of bench warrant against Innocent Chukwuma; Charles Chukwuma and Annajekwu Sunny for fraudulent clearance of goods, forgery, conversion, stealing and conspiracy presently pending before Faji J, at the Federal High Court, Ikoyi and adjourned to Decemeber 8, 2017 for arraignment/or hearing of motion.
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