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The founder and Chairman of the Innoson Vehicle Manufacturing Limited (IVM), Mr. Innocent Chukwuma, has said he will takeover GT Bank. He made this remark in a chat with a selection of media and financial reporters at his home in Nnewi during the week.
Nairametrics attended the interview where the charismatic vehicle manufacturer responded to a cross-section of questions. However, one of the most remarkable statements made by Mr. Chukwuma was his envisaged (from his point of view) takeover of one of Nigeria’s largest banks, GT Bank.
According to him, he will fund the takeover of the bank from the money owed to him by GTB (which is now GT HoldCo) inclusive of accrued interest. Recall, Innoson has been in a legal battle with GTB in recent years over claims and counterclaims of loans between his company and the bank.
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The statement, while off the cuff in response to the question he was asked, made a splash in the media and has also sparked concerns for shareholders of the bank. While we do not wish to prejudice the outcome of the court or assuage his claims (of which Mr Innocent has a right to make), it is important that we also address it from our perspective and also as part of our investor advocacy objective.
We will attempt to explain why is implausible to take over the bank on the basis of a judgement debt. But first, what he said.
Reporters: “For some years now, you have been having a running issue with Guaranty Trust Bank. What is the current situation right now?”
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“You know I’m one of their best customers in the entire Southeast, especially when the former MD, Olutayo Aderinokun was alive. Because of me, they opened a branch in Nnewi. But after the demise of Aderinokun, the new MD took over. I do not know him but only met him for the first time last year. I’m not sure exactly why he is fighting me but I think it has to do with tribe.
But finally, I have proved him wrong in everything he is doing. I have defeated him in all the courts he went to. It remains for him to pay me what he owes me because he can’t just go to my account and take money anyhow, which I discovered, took him to court over and won. Up till this moment, he has not paid and we had gone up to the Supreme Court. Maybe he wants Nigeria to change its law because of him.
But the beauty of it all is that the money has been attracting the interest of 22% for 11 years now. I’m waiting for the interest to grow beyond their capacity, and then I would takeover the bank. I’m not disturbing them anymore, but I’m assuring all the customers of the bank that if I take over, I will still run it well. Let them not have any fear. I haven’t done any business that has failed. I will run it better than them. If the interest on my money is above the capacity of the bank, I’d have no choice but to take over the management,” – Innocent Chukuwma
Read: We will produce electric cars when Nigeria is ready – Innocent Chukwuma, Chairman, Innoson Vehicles
Is this even possible?
Assuming Mr. Chukwuma’s claims that GTB does owe him money (that is if he does win at the Supreme court) and that the interest of 22% per annum does accumulate to such an astronomical proportion that it is more than the market capitalization or the net assets of GTB, it will still not mean that he takes over the bank that easily, if at all he could.
Here is why;
GTB factor
- Also to add that GTB (as with other public companies) does disclose the cases they have in court and the financial implications. As part of its disclosure, they also make provisions in their books for these cases in the event that they lose. Here is how GTB reported it in its 2020 audited report under “Claims and litigation”.
- “The Bank, in its ordinary course of business, is presently involved in 507 cases as a defendant (31 December 2019: 512) and 415 cases as a plaintiff (31 December 2019: 436). The total amount claimed in the 507 cases against the Bank is estimated at N440.83 Billion and $32.60 Million (31 December 2019: N462.09 Billion and $39.03 Million) while the total amount claimed in the 415 cases instituted by the Bank is N180.48 Billion (31 December 2019: N109.30 Billion). However, the solicitors of the Bank are of the view that the probable
liability which may arise from the cases pending against the Bank is not likely to exceed N190.20 Million (31 December 2019: N189.87 Million). This probable liability has been fully provided for by the Bank (please refer to Note 38)” - This means GTB has court cases amounting to N440 billion against it but does not expect to incur more than N190 million liability assuming they lose the case.
- Assuming the claims as depicted by Innocent Chukwuma does crystallize, all GTB will need to do is enter a payment plan for the loan which will allow it to repay its profits over a protracted period.
- It could also call on its existing shareholders to embark on a rights issue or public offer or even seek external funding to raise money to repay the loan.
Other factors
- Judgment debts are also carried out with the interest of the public at the center of decision-making. GTB is a quoted company with over 327k shareholders of the bank. We don’t see how investments of thousands of people will be eroded on the back of a judgment debt.
- The Central Bank will as expected have the ultimate say who owns the bank. CBN approves ownership of banks especially for takeovers and it is unlikely that the apex bank will allow judgment debts to determine who owns a bank or not. Worst case, the CBN will bail out the bank and retain shareholdings rather than hand it over to Mr. Innoson if it doesn’t want to.
- There are also political connotations that can also affect how the judgment will be interpreted and treated assuming it goes in the favour of Innoson.
- Thus, we do not see how this is possible.
Finally, the claims by Mr. Innoson at least keeps him on the headlines and piles pressure on GT Holdco to put out a response in this ongoing court and media battle over a banking giant and vehicle manufacturing giant. It appears Mr. Chukwuma has the media vibes at the moment.
Read the full interview with Innocent Chukwuma here
I am dumbfounded by this publication by nairametrics. You didnt question the moral conduct of GTB’s current MD. Or the fact that the same innoson confirmed having a wonderful relationship with late Tayo Adenirokun. So much so that he opened a branch in Nnewi because of him. Or the fact that the new MD has beong playing the tribal card on him without considering the ramifications of his selfish interest on the bank future. Instead, you are talking of how innoson will not take over GTB.
The solicitors you are talking about are the same solicitors who have been handling GTBs case and yet there is subsisting obligation of +32Billion against them that has been passed down as a judgement and you people are here talking probable.
As a yoruba man, I love my people very much but if there ia anything I detest more than cheats, its tribalistic cheats.
Let me give you some assignments to go and verify.
1. Did you know when the current MD was gunning to become MD, it was the late Tayo Adenirokun who insisted that such a man should never be MD. And you wonder why.
2. Did you know years after late Tayo’s passing, the current MD through a broker want to illegal sell late Tayo’s family stake to reduce their influence as revenge ?
I can decide not to publish what Ive said. That is your choice. But I know that this kind of writeup you put up, no matter how u try to twist it, is biased and has the scent of tribalism written all over it, and for a respected blog like urs to engage in such is very disappointing.
Thank you bros, you’ve written my mind. I was going to respond to this but after reading your response, I was at peace. Thanks once again.
But how can banking matter be tribal? Was Tayo Aderinokun an Igbo man? Is CBN governor a Yoruba man or is the Chief Justice a Yoruba man? The business of a businessman is to make money and money knows no tribe. Sometimes we unnecessarily elevate this tribe thing
I agree with your argument. If Nairametrics can only analyze this case from GTco angle alone, stating why Innoson cannot take over the bank, then it is shameful. If the bank and its solicitors know the end of the case from the beginning just as Nairametric is trying to analyse, the onus is on this blog to put out the right thing for the world to see, hopefully GTCO picks up their morals and banking ethics which they preach and do the right thing by paying off this debt in good faith.
I don’t see it that way.
Very poor communication emanating from the bank. I now believe the bank is guilty and thus owe Innoson the money. What a defense!!!
Very poor write up filled up with biased and single sided story. It is written by Naira metrics but with the hand writting of an innoson employer.
GT Bank had a bad case at this stand point and there is no new law that couldn’t be smuggled in because of GTB and to exonerate it from being held accountable for misdemeanour (betrayal of trust, stealing of customers wealth for self enrichment)
Central Bank of Nigeria (CBN) systematically has been aiding and abetting financial crimes and create lee-ways of escape to these bank operators. For instance, one wonders how the almighty CBN, EFCC, ICPC and NDIC deliberately bore false and conflicting witnesses at the Nigerian Court just to secure freedom and create escape route from Nigeria for Erasmus Akingbola of Intercontinental Bank PLC, so he fled to UK.
But surprisingly on that same issue upon arrival at the airport in UK, the Court swung into action, became hard on Erasmus Akingbola and was ordered to refund about USD $2billion to Access Bank PLC. In fact, no one cared or see anything wrong in our own systems.
It is not out of place for one to strongly believe that it was the CBN that has been grooming most of these giant criminals operating the banks in Nigeria, possibly may be sharing the loots equally and yet no one sees anything wrong with the CBN – baban barawo.
CBN’s impelling tools and game plan has always been very effective looking behind the CBN’s dubious dealing in favour of the operators of these Bank. We saw the Oceanic Bank PLC, the Bank PHB PLC etc.were pampered and shown the exit way.
GTBank operators have hardened their heart that no matter what happened that this case with Innoson Chukwuma can still go like the past ones, hence they can’t loose anything eventually, but not knowing that court sometimes uses sledgehammer while closing eyes to end cases without minding who you are.
Court is not “Father Christmas” so the legal teams of GT Bank dishing out millions of escape routes with which to steal another one’s wealth and get away with that may hit the rock and meet their Waterloo. Innoson Chukwuma still holds the knife and yams, period!
James K.
Skewed political comment masquerading as economic analysis. There is an extant Supreme Court judgment debt, and not a ‘claim’ by Innoson. The bank had been robbing the industrial conglomerate to pay its shareholders (of which i am one) that you are advocating for protection by reason of policy considerations. Our Industries need as much protection by government as banks that take advantage of its customers.
Innoson referred to a judgement already decided by the Supreme Court in his favour against GTBank. In your biased opinion, you did not border to address why the bank is yet to pay the judgement debt even after its been decided by the Alex Court. It is expected that you address that because while you’re free to give your opinion on matters, facts should always be isolated and treated as sacred.
Innoson referred to a judgement already decided by the Supreme Court in his favour against GTBank. In your biased opinion, you did not border to address why the bank is yet to pay the judgement debt even after its been decided by the Apex Court. It is expected that you address that because while you’re free to give your opinion on matters, facts should always be isolated and treated as sacred.
Nice try! But I will advise you to stop deceiving the public on this matter. There is supreme court decision already on this matter which is infavour of innoson. Just Google supreme court decision between innoson and GTB for more info.
What if he buys a majority stake in the company with some external resources and then take over the companies management? In my mind, I think that is more than likely possible?
Can’t believe what I just read from you guys! I use to regard nairametrics highly but I do not know again! Who told you that it is mandatory for judgement creditor to accept any payment plan put by the Judgement debtor? Pls you can do better!!