After nearly ten whole years of protracted litigation, the Supreme Court recently upheld a ruling requiring Stanbic IBTC Holdings Plc to pay the sum of N2.5 billion to Mr Patrick Akinkuotu and Longterm Global Capital Limited. In response to the ruling, the company informed the Nigerian Stock Exchange and the public that the full payment has been made.
In a statement signed by the Company Secretary, Chidi Okezie, Stanbic IBTC also assured its stakeholders that the outcome of the litigation will neither affect the company’s liquidity nor its profitability in the long run.
The Case: In 2010, The Federal High Court was the first to rule in favour of Longterm Global Capital and Patrick Akinkuotu back in 2010. Following the ruling, Stanbic IBTC Bank immediately appealed before Court of Appeals but was unsuccessful. The case was then taken to the Supreme Court but was dismissed.
This, therefore, shows that Stanbic IBTC Holdings Plc exhausted all available legal means prior to completely losing the case.
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The Backstory: The court case stemmed from a business transaction gone awry. Apparently, Mr Patrick Akinkuotu and his company (i.e., Longterm Global Capital Limited) did obtain overdraft facilities worth N600 million and N650 million from the bank between April and July 2007. The facilities were for a term of 365 days with an option of rollover among other terms.
Later on, Akinkuotu requested that the facilities granted to himself and his company be merged. The request was then obliged by the bank, even as the facilities were secured with the equity stakes both Akinkuoto and Longterm Global Capital Limited held in some companies.
Meanwhile, Stanbic IBTC later sold some 28, 745,400 units of GTBank Plc’s shares, which is part of the customers’ shareholdings that were used as collateral. But the bank reportedly sold the shares for N267,775,799.21, a development that upset the Akinkuoto and his company who protested that the shares were worth more than they were sold.
The two entities, therefore, dragged Stanbic IBTC to court and even claimed that the overdraft facilities were already liquidated even as the company failed to reflect the repayments. They also sought to be compensated for damages and lost opportunities.