Access Bank vs Seplat: A Tale of Banking Hostilities
Undung Pam
Strange things happen every day. Even the world of business is no stranger to unusual events. Deals fall through, companies sometimes fail to fulfil their side of agreements, which usually leads to disputes, and corporations get sued. None of this is new to the world of business.
Nonetheless, one may still be at a loss when trying to understand the recent scuffle between multinational banking giant, Access Bank, and indigenous oil and gas company, Seplat Petroleum Development Company Plc (Seplat). The two parties have been in court since November 2020, after Access Bank listed Seplat and Dr Ambrose Orjiako, Seplat’s Chairman, as defendants in its suit against Cardinal Drilling Services Limited in a debt recovery campaign for the sum of $85,800,000.00 (Eighty-Five Million, Eight Hundred Thousand Dollars). Following this suit, Access Bank has since obtained an interim Court Order dated 23rd November 2020, by which it sealed Seplat’s Corporate Head Office located at 16A, Temple Road Ikoyi, Lagos and took actions to freeze their banking activities.
On the 24th of December 2020, the Federal High Court granted Access Bank’s application for an Interlocutory Injunction against all Defendants pending the determination of the case. On December 31, 2020, Seplat filed an appeal seeking a setting aside of this Interlocutory injunction, or a suspension of the injunction on the condition of Seplat providing a bank guarantee for $20,000,000.00 as security for the suspension of the injunction pending the hearing and determination of the appeal.
What is so unusual about all this? You may ask.
The answer is that Seplat, whose premises have been sealed by court order and has had its bank accounts frozen on account of Access Bank’s suit, was never a party to any agreement between Cardinal Drilling Services and Access Bank. Additionally, it never took any credit facility, nor did it guarantee the credit facilities taken by Cardinal Drilling Services from Access Bank. Sealing up of its business premises under the ex-parte court order is based on a fundamentally faulty case built against it by Access bank.
To further understand what led to this, let us backtrack a few years. In 2012 and 2014, Access Bank granted credit facilities to Cardinal Drilling Services Limited, upon which Deeds of Debenture were issued, and funds were availed to the latter. Even though no evidence has been shown to suggest that Seplat ever had any direct dealing with Access Bank, in its originating summons, Access Bank claims that the funds made available to Cardinal Drilling Services were immediately transferred to Seplat who used the money for the enhancement of its business. Without backing up its assertions with evidence, Access bank went ahead to claim that Seplat is, in fact, the real debtor while Cardinal Drilling Services is merely a “vehicle,” “smokescreen”, “decoy” and/or “shell company” for the subtle obtainment of the credit facilities by the 1st Defendant, Seplat.
It is trite law that he who asserts must prove. However, since making these unfounded claims, not only has Access bank failed to prove its assertions, but it has also, most unreasonably, proceeded to pile a litany of woes on Seplat and other innocent parties. The ex-parte order which it obtained from the court to have one of the business premises, specifically No. 16A, Holloway street, Ikoyi, sealed up has not only stalled business activities but has caused great loss of revenue, not just for Seplat but for other tenants in the premises namely, Samsung Heavy Industries Nigeria Limited, African Finance Corporation, and Arise Television. Also, as a result of the enforcement of the court order against Seplat which is a public limited liability company, its shares which are listed on the Nigerian and the London Stock Exchange are now in a dangerous position.
That a court of law could grant an order sought for, on such shaky foundation and with the obvious aim of causing great injustice is mind-boggling, and even more so because the counsel to Access Bank, Kunle Ogunba Esq. SAN, in his haste to malign Seplat, could not even be bothered to get its name right. In the originating summons, he refers to the 1st defendant as Seplat Petroleum Development Company Limited. There is no such company. The company against which Access Bank has directed its unfounded aggression is Seplat Petroleum Development Company Plc, even though this is not the company for which it obtained the court order. It is embarrassing that despite this glaring error, counsel to Access Bank was granted the order anyway, which it has now oppressively enforced against the wrong legal entity.
Additionally, the legal significance of suing a limited liability company is that, since the company is recognized in law as a separate legal entity, the board of directors, or in this case, chairman of the company is not personally liable for any of the debts of the company. Again, it must be stated that Access Bank has not proven that any debts are owed to it by Seplat. Thus far, it has only made unsubstantiated claims and has indeed gone ahead to sue Dr Orjiakor, the chairman of Seplat, regardless of legal principles restricting this. It claims through its originating summons that Seplat is a sister company to Cardinal Drilling Services and that Dr Orjiakor is the “alter ego” of the two companies. It did not, however, provide any explanation as to the exact meaning of such an expression.
The corporate world has been described by many as one big shark tank and rightly so, yet one cannot help but wonder at the manifest display of rabid doggedness with which Access bank has chosen to pursue Seplat. What is the real motive behind this corporate hostility? Could this be its response to possible financial troubles? In 2020, the Managing Director of the bank, Herbert Wigwe, to the surprise of many, revealed that the bank was seriously going through a difficult time and that as a result, 75% of the staff would be sacked. He went on to reveal that the bank was in a serious financial problem and could no longer accommodate its bogus wage bill. He warned his staff to brace up for the months ahead. In addition to this, in recent years, Access Bank has been in the news for all the wrong reasons; being the subjects of damning accusations and lawsuits. Is it possible that they are not yet out of the woods and this recent legal stunt of theirs against Seplat is their attempt at clutching at straws for survival? This remains to be seen.
To add to its woes, it is no secret that Access bank does not have the best reputation right now, not even amongst its customers. The reasons for this are not far-fetched. In the heat of the #EndSARS protests, it was one of the first banks to freeze the accounts of protest promoters. It subsequently apologized for doing so, putting up the defence that its action was necessitated by the Central Bank of Nigeria (CBN).
This, however, did not assuage its customers, as the hashtag #BoycottAccessBank was trending on Twitter in no time, with some calling for customers to close their accounts with the bank for “colluding with the government” to oppress #EndSARS protesters. Some even went ahead to sue the bank for illegally blocking their account. With the recent directive of CBN that commercial banks stop facilitating cryptocurrency, Access Bank has again come under serious backlash from its customers for its apparent haste to comply with the unfavourable directive, by closing down the accounts of its customers who have traded in cryptocurrency. From its actions, many have concluded that the bank has a disturbing penchant for assisting the government in disrupting the lives of Nigerian citizens. This background of hostilities carried out by the bank was perhaps a foreshadowing of what it is capable of doing on a much larger scale, against a larger target.
While it is understandable that the bank wants to recover the debt owed it, would it be stating the obvious to say, that perhaps it is barking up the wrong tree? How can you presume to get from Peter what is owed to you by Paul? Not only does this go against the law of common sense and the basic laws regulating human interaction, but it is also contrary to the law. This is ensured by the doctrine of privity of contracts. Going forward, one can hope that the bench will put an end to this charade and desist from being used as an instrument to perpetuate injustice against innocent parties.
Undung Pam is a social commentator contributing from Jos, Plateau State.