The Nation Newspaper

Tag: DEBT

  • Bi-Courtney: Debt dispute may shift to Supreme Court

    The Asset Management Corporation of Nigeria (AMCON) may head for the Supreme Court in a bid to recover its alleged N50billion debt from Bi-Courtney Limited, the concessionaire of the Murtala Muhammad Airport, Terminal 2 Lagos.

    The Court of Appeal, Lagos Division, last Wednesday dismissed AMCON’s appeal against a ruling by Justice Ibrahim Buba of the Federal High Court in Lagos over an alleged N50 billion debt owed by Bi-Courtney Group.

    The ruling nullified an order appointing a former Nigerian Bar Association (NBA) president, Mr Olisa Agbakoba (SAN) as the receiver/Manager over the assets of Bi-Courtney, its Chairman, Dr Wale Babalakin (SAN), Chartered Investment Limited, Resort International Limited and Roygate Properties Limited.

    Justice Buba had held that the order by his colleague, Justice Okon Abang, was made in error and should not have been given when there were pending cases and subsisting orders on the same case.

    According to him, the true facts were not disclosed to Justice Abang. “This court, no doubt, has been misled,” the judge said.

    The appellate court presided over by Justice Sidi Bage upheld Justice Buba’s ruling. It added that the circumstances under which AMCON obtained the ex- parte order against Bi-Courtney Group amounted to an abuse of court process.

    The court resolved all the issues formulated by the parties against AMCON and dismissed the appeal in its entirety.

    The court held that the orders obtained by AMCON were in direct conflict with the subsisting orders of court and AMCON having failed to notify the court of the subsisting orders, and the fact that settlement had broken down, the orders granted by Justice Abang were a nullity.

    The Court of Appeal disagreed with AMCON’s contention that the previous suits pending between the parties, in which certain orders were made against AMCON and which orders were still extant, had been compromised and discontinued.

    According to Justice Bage, there was nothing in the record to show that the suits had been compromised and to that end, the actions of AMCON in commencing a new action and obtaining ex parte orders that were in direct conflict with subsisting orders of court, amounted to an abuse of the process of court.

    The court deprecated AMCON’s conduct and held that a party, who had submitted an issue for the determination of a court in a pending suit, should not take steps to undermine the integrity of the court and the judicial process by filing another action seeking the same reliefs.

    The appellate court considered the provisions of Section 49 and 50 of AMCON Act which entitles the corporation to file recovery actions and held that such powers must be properly exercised within the bounds of the law and in accordance with the rule of law.

    Babalakin said the Federal Government owes Bi-Courtney N132billion. According to him, the company is not indebted to AMCON.

    The senior advocate said the Federal High Court sitting Abuja ordered the Federal Government, represented by the Attorney-General of the Federation, Mohammed Bello Adoke (SAN), to pay Bi-Courtney the sum.

    In the order made by Justice G. Olotu on April 5, 2012 in a suit numbered FHC/ABJ/CS/50/09, the judge had directed the AGF to pay N132, 540,580,304.00 to Bi-Courtney “being the sum due to be rendered and remitted to the applicant (Bi-Courtney).”

    The judge also directed Adoke “to mandatorily compel” the affected government institutions and bodies to make the payment “without any further delay” to Bi-Courtney.

    “Justice Olotu also made “an order directing the defendant/respondent, being the Chief Law Officer and legal representative of the government, to set off from the above mentioned sum of N132, 540,580,304.00 on any claims agreed with the plaintiff/applicant to be due from the plaintiff/applicant to any agency of the Federal Government of Nigeria, including but not limited to the Asset Management Corporation of Nigeria (AMCON),” the court order stated.

    Babalakin said AMCON’s assertion that Bi-Courtney is indebted to it is yet to be confirmed by any court.

     

     

     

  • Creditors sue ministry over N3b debt

    A group, JTF House Boat Owners Coalition,  has sued the Ministry of Defence at the Federal High Court 1 sitting in Port Harcourt, Rivers State, over an alleged N3billion debt.

    The businessmen said the debt was owed in respect of 13 house boats rented for use by the personnel of Military Joint Task Force (Operation Pulio Shield) in the Niger Delta region.

    The matter, which came up for hearing on Monday, was adjourned to April 23.

    The presiding judge, Justice Lambo Akanbi, said the adjournment was to enable the defendant have enough time to respond to the statement of claim presented by the plaintiffs.

    Counsel to the plaintiffs, Mr. A.O Yusuf, said: “We just filed and we expect them to pay the money or call us for settlement out of court because the Defence Ministry is a Federal Government parastatal and I know they won’t like to be disgraced before the court.”

    Dr. Etiese Etuk, who spoke for the firms faulted the “forceful seizesure” of the “equipment for over 36 months for security surveillance.

    “Having not paid us and having done all manners of consultations and appeals we decided to use the last resort which is the common man strategy to come to court to ask for redress and for the payment of our money”

    Similarly, another rep, Mr. Oloriegbe Majeed said, “the matter was filed to enforce our rights against the federal government. We are Niger Delta people who have house boats and gave them to the federal government for surveillance and protection of pipelines in Nigeria. To our utmost surprise and indignation, we have not been paid for 36 months.

    “We have pleaded, we have written, we have done publications, we have done everything that is necessary to be done, but yet the government paid a deaf ear to our complains and that is why we have filed this suit and pleading with the court to give us accelerated hearing so that we can remain in business.”

    “We are very surprised that the government is not paying serious attention to the issue of pipeline vandalism, because we are the ones providing the boats for the protection of the pipelines and we are astonished that we have not been paid for 36 months. If the government is serious about the security of pipelines, they will pay the people who provide services for the protection of those pipelines.”

     

     

     

     

     

     

  • Greece debt talks are too slow, says EC chief

    Greece debt talks are too slow, says EC chief

    European Commission (EC) President Jean-Claude Juncker has criticised the slow pace of progress in talks over Greece’s debt, since last month’s interim deal.

    Before meeting Greek Prime Minister Alexis Tsipras in Brussels, Mr Juncker said he was “not satisfied”.

    Mr Tsipras needs EU support for reforms to unlock vital funds, avoid possible bankruptcy and a eurozone exit.

    The leftist leader has pledged to end austerity – but his plans have met resistance from Greece’s EU creditors.

    Greece negotiated a four-month extension to its bailout last month after tense talks with creditors.

    Eurozone leaders are ready to extend help on Greece’s €240billion (£176billion; $272bilion) bailout until the end of June.

    To persuade the EU of its credit-worthiness, Greece has announced a series of reforms. But it also wants the EU to agree new terms for the long-term repayment of its debts.

    If no agreement is reached, Greece risks being unable to meet its obligations. Within the next two weeks alone, it needs €6illion (£4.3billion; $6.4billion) to pay its creditors.

  • Kwara sues Fed Govt for $58.4m debt

    Kwara State Government has sued the Federal Government before the Supreme Court, seeking to among others, compel it to pay it about $58,505,759 allegedly collected on its behalf from a foreign company about 21 years ago.

    The state accused the Federal Government of refusing to release the money, which formed an overpayment of a foreign loan obtained by Kwara and guaranteed by the Federal Government.

  • External debt hits $9.71b

    External debt at the end of last year stood at $9.71 billion, equivalent of 1.7 per cent of estimated 2014 Gross Domestic Product (GDP), the Debt Management Office (DMO), has said.

    A report by FBN Capital, said the increase of $190 million over the quarter is accounted for by bilateral creditors, but the data are not data to associate with a government in heightened borrowing mode.

    It said the DMO’s medium term strategy of May 2013 set a target of 60/40 for the optimum mix of the Federal Government domestic and external debt obligations.

    “Our estimates suggest that the blend was 83/17 in December. The target may well be revised in the context of the slide in the oil price and resulting pressure on the naira exchange rate,” it said.

    The strategy, it said, was driven by relative servicing costs, which the DMO estimated at the time as favouring external debt obligations by about 800 basis points. The differential is little changed currently in the middle of the curve.

    “These were estimates for market borrowing, whereas loans on concessional terms from multilateral agencies accounted for 70 per cent of external debt in December. The differential in favour of external borrowings should therefore be adjusted upwards. The debt stock/GDP ratio is popular with the ratings agencies, and therefore widely cited in the financial media,” it said.

  • Fashola to Agbaje: pay your debt

    Fashola to Agbaje: pay your debt

    Lagos State Governor Babatunde Fashola (SAN) has urged the Peoples Democratic Party (PDP) governorship candidate, Mr. Jimi Agbaje, to pay his outstanding debt to the state.

    The governor, in a statement by his Special Adviser on Media, Hakeem Bello, said Agbaje owed N1,629,064.62 of Land Use charge.

    The debt, the governor said, is on JayKay Pharmacy on 9, Randle Close, Apapa owned by the candidate.

    Fashola said Agbaje owes the state from 2009 to 2012, even though he had paid for 2013 and 2014.

    The governor said the property is distinct from 1, Bombay Crescent, Apapa GRA over which Agbaje does not owe the state.

    The statement reads: “We consider it necessary to make a response to the rebuttal of Mr. Jimi Agbaje in some newspapers to the assertion by His Excellency, Mr. Babatunde Raji Fashola (SAN) on the subsisting default in Land Use Charge payment of N1,629,064.62 by JayKay Pharmacy Limited on the above mentioned property.

    “For clarity, the issue at hand has to do with Mr. Agbaje’s business premises at 9, Randle Close, Apapa and not 1, Bombay Crescent, Apapa GRA, for which he was commended.

    “The letter issued by the Commissioner for Finance is in respect of 1, Bombay Crescent, Apapa GRA, which was published in Mr. Agbaje’s response and is proof of government’s acknowledgement of payments made on that property at 1, Bombay Crescent, Apapa GRA which presumably is his residence.

    “The Land Use Charge on the business premises of JK Pharmacy at 9, Randle Close, Apapa, was not paid for 2009, 2010, 2011 and 2012.

    “As Governor Fashola acknowledged, payment was made for 2013 and 2014 on 9, Randle Close, Apapa, perhaps in preparation for the election.

    “The payments for 2009 to 2012 remain outstanding and unpaid and those monies go to the Local Governments to fund primary education and primary Healthcare.

    “The amount due and unpaid is N1,629,064.62. The only way this debt owed to the people of Lagos will go away is if it is paid.”

  • Policemen invade church over ‘debt’

    A pentecostal church, People of Peculiar Ministry International, Araromi in Igando, a Lagos suburb, was thrown into disarray on January 15 following invasion by 10 armed policemen.

    They dispersed the worshippers, assaulted and whisked away the pastor and some members over an alleged N300,000 debt.

    The policemen who came in mufti, were said to have been sent by the Divisional Police Officer, Amukoko Division, Mr. Abayomi Agbana, a Chief Superintendent  (CSP), although they initially claimed to have come from the General Investigations Division (GID), Ikeja, to execute a court order.

    When the church’s protocol officer, Mr. Samuel Ajakaiye, demanded to see the court order, the officers were said to have descended on him, before, forcing their way into the church to ransack offices, the kitchen and the pastor’s rest room.

    Ajakaiye, with a swollen eye-ball, told reporters: “We had a morning prayer session on Thursday, January 15, 2015 and the pastor, James Kunle Hephzibah, had two radio programmes at Bond Fm and Radio Lagos. At about 6.30am, an old danfo commercial bus stopped in front of the church. In fact, the way its occupants jumped out, I thought they were armed robbers. They said they were from GID, Ikeja with a court order.

    “When I demanded to see the court order, immediately they descended on me, tore my clothes and hit me with their handcuffs and gun butts. Just look at my swollen eyes. In fact, they scattered the office, kitchen, rest rooms, broke the door and the worst part, they humiliated the pastor. They dragged and forced him into the bus. They also arrested four members that questioned their conduct. But instead of the GID, Ikeja, they took us to Amukoko police division, where they subjected us to more ridicule and trauma until 7pm when people intervened from higher police formations.”

    The popular televangelist, Pastor Hephzibah, also known as ‘Baba Peculiar’ queried the legality of the action.

    “How can they invade a church without a legal authority? They came all the way from Apapa and did not register their presence at the nearest police station. When has the police turned to a debt collector? These men invaded our church, brutalised members and made away with three of my handsets and over half a million naira,” he said.

    The pastor added: “I have never seen or received this kind of embarrassment in my life. It was too much in our church yesterday. I am not a robber or fraudster and these people came all the way from Apapa to humiliate me and my members. They wounded our Protocol Officer Samuel. I lost three of my handsets – Samsung X2, X3, X4 – and we cannot find N560,000 meant for the radio programmes after their invasion. I just don’t know what to say but those policemen who came and disgraced me on the street and in the neighbourhood for a mere false allegation must receive their due punishment from the law and God. I had to calm down when their DPO apologised because I am a servant of God.”

    It was gathered that the policemen did not “book” their arrival at the Area ‘M’ until a crowd compelled them to take the pastor and his people to Igando Police Division to prove that they were from Area ‘B’ Command.

    When contacted, Agbana said he was not in his office, promising to be there before 2pm. But, he could not be reached later on his phone.

    Police spokesman Deputy Superintendent (DSP) Kenneth Nwosu said he was not aware of the incident.

    It was gathered that the church bought a Nissan bus from one Mr. Alabi Haruna for N1.2 million for which itpaid N900,000. The c hurch promised to pay the N300,000 balance after the bus was test-run.

    In a petition to the Commissioner of Police, the church said: “When we test-ran the bus, it was in bad condition, hence we asked Haruna to either effect the repairs as we agreed or balance us our money and take his bus away. For one year and two months, he disappeared and never showed up. We did everything to contact him but he ran away. The case was initially at Igando Police Station, where he was asked him to comply, but after one year and two months, he connived with those policemen that his bus was missing.”

     

  • Dubai World gets majority creditor backing for $15b debt deal

    Dubai World gets majority creditor backing for $15b debt deal

    State-owned conglomerate Dubai World edged closer to a second major restructuring in four years on Monday after announcing it had reached agreement with a “substantial majority” of creditors to back its $14.6 billion debt deal.

    However, despite having enough backing to effectively prevent challenges to its new deal, a relatively untested court process to impose it will mean formal completion is still months away.

    Dubai’s economy has rebounded strongly from a local property crash which triggered a wave of debt restructurings at state-owned entities at the turn of the decade — most notably Dubai World’s request for a debt standstill on $25 billion of obligations in 2009 that resulted in a global markets sell-off.

    It has been in talks with lenders for months to secure a renegotiation of terms of the debt deal it signed in 2011 which followed the 2009 standstill request, given the size of the $10.3 billion 2018 repayment and the slow pace of asset sales.

    An agreement would alleviate worries over Dubai’s largest debt hangover and may also lift the upcoming results of local banks. A number, including Emirates NBD ENBD.DU, have said they are studying whether to reverse provisions held against their share of the debt.

    On Monday, Dubai World said it had made a “voluntary arrangement notification” under Decree 57 legislation to amend its existing debt deal, the first formal notification from the conglomerate that support from creditors for a new deal had passed the 67 percent mark — the level needed to authorize a change of restructuring terms.

    Decree 57 was brought in by the Dubai government to administer the conglomerate’s previous restructuring in the absence of effective insolvency law in the United Arab Emirates.

    The process will begin with a procedural court hearing on Tuesday, which may set a date for a directional hearing at which Dubai World and its creditors will put their cases before a three-member judicial panel at the court in Dubai’s financial free zone.It will be the biggest test of the legislation. While the tribunal played only a supporting role in the 2011 debt deal, it handled the $2.2 billion restructuring of one of Dubai World’s subsidiaries, Drydocks World, a year later.

    That restructuring process took five months from first court date to final agreement, and a legal source estimated Dubai World’s process would take around six months, depending on the progress of talks with creditors.

    “The renegotiation of an already rescheduled facility is a clear reminder to all of the scale of the challenge facing Dubai World,” said Doug Bitcon, head of fixed income funds at Rasmala Investment Bank.

    He added the restructuring reflected improved fiscal planning from Dubai World, which would hopefully benefit all parties as assets were sold.

    For creditors not yet signed up to the restructuring deal, Decree 57 prevents them from launching court action against Dubai World.

    Decree 57 also allows for Dubai World to impose the new deal on creditors even if they are against it — a technical process known as a cramdown. A clause requiring any ruling to be “fair” and “unprejudicial” to creditors in the eyes of the judges would be the likely basis of any challenge brought by dissenters, the legal source added.

    The new plan involves repaying early an existing $2.92 billion maturity due in September 2015, Dubai World said.

    The company will also extend a 2018 repayment to 2022, with higher pricing, an amortizing structure and more collateral backing the loan, confirming a September Reuters story.

  • Fayemi clears air on Ekiti’s debt

    Fayemi clears air on Ekiti’s debt

    Former Ekiti State Governor Kayode Fayemi has debunked the allegation by Governor Ayodele Fayose that the state owes N87billion.

    In a statement yesterday by his Chief Press Secretary, Olayinka Oyebode, Fayemi said the state owed N36billion and not N87billion as claimed.

    It said: “The media was awash last Friday with allegations of financial recklessness and huge indebtedness by the administration of Dr Kayode Fayemi.

    “Fayose had, in his inaugural speech, put the state’s debt profile at N57 billion. A day earlier, he had put the figure at N89billion during a televised interview.

    “This is in addition to the various unprintable words he used to describe the Fayemi administration.

    “Although former Commissioner for Information Tayo Ekundayo has responded to the allegations, it has become necessary to provide additional details to that earlier reaction.

    “The concern here is that the public could be misled by the fraudulent claims and deliberate distortions of facts and figures.

    “For the avoidance of doubt, the state’s debt as at October 15 is N36,316,017,758.93.

    “Of this amount, N7,830,636,440.62 represents foreign loans incurred by previous administrations since the days of the old Ondo State.

    “The difference of N28, 485,381,316.31 represents internal loan. This includes inherited loans from previous administrations and outstanding balance (debt) of the bond taken at the Capital Market.

    “Despite this, the Federal Government owes the state N17,710,728,299.06. This include N10,839,493,135.63 (amount due from construction of federal roads); N4,012,384,082.60 (refund on Paris Club) and N2,858,851,080.83 (amount due on ecological projects).

    “If the Federal Government had graciously paid part of this, the state’s debt profile would have been greatly reduced.

    “It is our belief that Fayose was hasty in making a pronouncement on the state’s finances and other matters without first going through the handover note, which contains details of government transactions and financial situation. Nothing can be more mischievous and irresponsible.

    “The governor alleged that the state account was in red but the state bank balances as at October 15 stood at N1,930,739,725.84.  This comprised N1,463,805,908.56 (state account) and N466,933,817.28 (local government account).

    “Also, the Bond Sinking Fund Account balance as at September stood at N3,019,987,424.03.

    “Nothing could be farther from the truth than Fayose’s allegation that none of the MDAs account had up to N1million. For instance, the Ministry of Agriculture’s account is in the excess of N90million, while the MDG account has close to N1 billion.

    “There is no responsible leader in Nigeria today that will not acknowledge the poor state of the economy, a development that has made it difficult for the Federal Government to meet its obligations to states.

    “In the last two years, states have had to leave the monthly FAAC meetings empty handed, as they did last week.  This is in addition to a huge reduction in the amount given to the states.

    “In Ekiti State, for instance, the federal allocation has dropped by about N480million monthly since the beginning of the year and this has placed a huge strain on government finances.

    “The government has had to resort to bank facilities in order to augment the now insufficient allocation and pay salaries.

    “As a government that is committed to its citizens’ welfare, the Fayemi –led administration had in 2011 approached the Capital Market where it raised a N25billion bond which it spent on infrastructure and projects which are regenerative in nature.

    “Of the amount, about N14 billion has been repaid through the laid down repayment regime. The outstanding balance of the bond money forms part of the N28billion debt profile according to the state’s audited accounts, which were published in some newspapers last week.

    “It is also pertinent to state that the governor’s claims that the former administration owed two months salaries are dubious. The only salary being owed is that of September and the development was sequel to the reluctance of banks to give the state facilities, following sundry allegations of collaboration levelled against the banks by Fayose.

    “In all this, the Debt Management Office (DMO), a Federal Government agency, still rates Ekiti State as one of the least indebted states in the country.”

     

     Facts and  figures

    •Ekiti State has a debt of N36,316,017,758.93.
    •Foreign Loans N7,830,636,440.62
    •Internal Loans N28, 485,381,316.31
    •Fed Govt owes Ekiti N17,710,728,299.06
    •State’s balance N1,930,739,725.84
    •Bond Sinking Fund balance N3,019,987,424.03

     

  • APC hails Fashola on Lagos debt profile

    APC hails Fashola on Lagos debt profile

    •Party urges Fed Govt to explain N8.8tr liability

    Lagos State All Progressives Congress (APC) has hailed Governor Babatunde Raji Fashola (SAN) on his explanations about the status of the state’s debt profile.

    The party also urged the Peoples Democratic Party (PDP)-led Federal Government to furnish Nigerians with an account of the status and performance of the financial liabilities it has piled up.

    Its Publicity Secretary, Joe Igbokwe, in a statement yesterday, said every Nigerian should be grateful to Fashola and the APC government in Lagos for utilising the state’s resources to better the lives of Nigerians.

    The APC noted that while the state was alive to its responsibilities, the Federal Government has abandoned its.

    The party stressed that Nigerians should demand from their leaders at the federal level what it did with the hefty debt it has accumulated in recent times.

    The statement reads: “We salute Governor Fashola for this brilliant answer to what was obviously a blackmail from the PDP-led Federal Government that has been pilling debts for Nigerians at an alarming rate.

    “Even with the huge accruals the Federal Government is harnessing, it has once again, ran Nigeria into a tricky debt trap after the controversial exit from the debt trap during the Obasanjo regime.

    “It must interest Nigerians while the publication was making an issue that a viable state like Lagos is owing N160 billion, it wanted to play down the fact that the Federal Government it works for has piled up Nigeria’s debt to N8.8 trillion!

    “Lagos has the fifth largest economy in Africa, catering for over 21 million people with such gigantic projects like the famous light rail project, the several independent power projects, the Eko Atlantic City, ambitious city roads, gigantic municipal water works, etc.

    “Lagos has a reputation as a solid state that has met all its previous debt obligations. Lagos invests in regenerative projects that have contributed to not only make Lagos productive and viable to all Nigerians, but the mainstay of the Nigerian economy.”

    The party wondered how an agency of the Federal Government that has nothing to show for the huge tranche of resources it sits on wants to play politics with the debt profile of Lagos State, “if not for the same arcane politics that the same government has used to wreck the country.”

    “It may interest Nigerians to know that the Federal Government, which collects 52 per cent of monthly allocations while all the 36 states, including Lagos share 26 per cent, has a debt portfolio that far exceeds the debts owed by all the states in Nigeria.

    “We want to also let Nigerians know that the same Federal Government is supervising the ruination of the infrastructural base of the nation, pushing Nigerians to flock to Lagos for survival and succour.

    “We want to challenge the Federal Government to do a detailed explanation of what it does with the huge debt it had piled up for Nigerians, we want them to let Nigerians know what it does with the hefty 52 per cent it collects from the Federation Account each month while poverty, unemployment, infrastructural decay, insecurity, etc have all taken over the country.

    “What is the Federal Government doing with the debt it continues pilling each day? Lagos is doing fantastic developmental and regenerative works with the mere N160 billion debt it had accumulated. It is up to date in its debt settlement profile as the projects it had invested in are high yielding projects that drive not only the economy of Lagos but that of Nigeria.

    “So, we challenge the Federal Government to come out in equal clarity, as deployed by Governor Fashola to tell Nigerians what they are doing with the huge N8.8 trillion debt it has piled up for Nigeria.”