Court Awards #2.6bn Against A New Generation Bank

An Osun State High Court sitting in Osogbo yesterday awarded N2.6 billion against a new generation bank as damage for breach of contract it reached with Tuns Farms Agricultural Limited, a subsidiary of Tuns Holdings.

In his judgment which lasted over two hours, Justice Oyejide Falola averred that the management of the bank erred in the fulfillment of contractual agreement entered into on a loan facility of N2 billion with the firm.

Justice Falola also ruled that the bank exhibits poor corporate governance and poor diligence in handling the Central Bank of Nigeria (CBN) loan which was paid into its account for disbursement to the firm.

The plaintiff (Tuns Farm) had dragged an Osogbo branch of the bank before the court for disbursing N300million out of the N2 billion loan it secured from CBN under a special loan facility called Commercial Agric Credit Scheme.

According to the plaintiff, efforts made for the release of the balance of N1.7 billion did not yield any positive result as the bank held that it has used the balance to offset a loan previously obtained by the firm.

But the plaintiff disagreed with the arrangement, saying that the previous loan had been taken over by the Asset Management Company of Nigeria (AMCON).

The court also blamed the management of the bank for pocketing the money meant to be disbursed as loan to its customer.

Counsel to the plaintiff, Chief Duro Adeleye (SAN) who lauded the judgment, said the court has through the ruling upheld justice and fairness, adding that the judgment would restore the confidence of Nigerians in the judiciary.

But counsel to the defendant, Mr Oladipo Olasope said his client would appeal the judgment, describing the court ruling as a poor one which negates the principle of law.