On the heels its failure for seven years to recover its whooping bad debts of over ₦700 billion, Nigeria’s major financial institution, First Bank of Nigeria, seems to have woken from its slumbers as it just renewed legal hostilities with one of its debtors, Lister Flour Mills Nigeria Limited owned by the late Ibadan socialite and business mogul, Alhaji Alao Arisekola, in a bid to recover an alleged debt of ₦8.86 billion, owed the bank .
Following an order of a Federal High court in Lagos, the bank has refilled a suit against two directors of the company Mrs Khadijah Alao-Straub, Mr Ismail Alao and a sister company, Lister Oil limited.
Lister Flour Mills is among companies formerly owned and promoted by the late Ibadan socialite, business mogul, religious promoter, philanthropist and traditional chieftain, Alhaji Abdulazeez Arisekola Alao.
The banking giant, had had lately been locked in a battle with its stakeholders, on the issue bothering on lack of trust of its particularly with shareholders, on why it has failed to disclose how it has been handling the issue of bad debts in its books.
The banking institution, was particularly berated on why it had failed to disclose how much it had recovered from its whooping bad debts otherwise known as non-performing loans since 2011, seven years after it made an estimated ₦700 billion provisioning for the debts in its books.
The development had led to an ugly scenerio at the company’s annual general meeting (AGM), earlier this year at the prestigeous Eko Hotel, as shareholders held up the meeting for almost one hour.
In the suit against the late Arisekola family First Bank, is claiming that between 24th of January 2011 and November, 2013 Mrs Khadijah Alao-Straub, then acting in her capacity as director of Lister Flour Mills, requested and secured various loans from the bank amounting to over ₦6 billion.
The loans were secured by a perfect deed of mortgage debenture dated 23rd of October, 2002 over the company’s assets which include the entire parcel of land lying at Idiroko Olomoyoyo, Ibadan-Ijebu-Ode Road, Ibadan, Oyo State containing area of approximately 31 acres. This was complemented by deeds of guarantee from a sister company Lister Oil Limited and a director Mr Ismail Alao.
The bank averred that Lister Flour Mills failed to settle their outstanding obligations as at when due, despite numerous letters and reminders. This led the bank to call in the facilities and serve demand letters for immediate payment of the outstanding debt. Further non-cooperation by the defendants finally led the bank to appoint a receiver manager to liquidate the company’s assets.
The bank is therefore seeking judgements against the defendants to the tune of ₦8.86 billion, being the cumulative total of the loans and interests accrued up to 5th September 2015. It is also seeking an order of injunction barring the defendants and their agents from interfering with the work of the receiver/manager in charge of liquidating the company’s assets.
Surprisingly, the expected legal challenge from the defendants has yet to materialize as they have mounted no defence as yet. The case has however been adjourned to give both parties more time to prepare.