By Time Nigeria
Weeks after Ecobank dragged Vigeo Limited, a multi business holding company specialising on infrastructure to a Federal High Court, sitting in Lagos, over an outstanding loan of Eight Billion, Seven Hundred and Seventy Million, Three Hundred and Twenty-Eight Thousand and Eighty-three Kobo (N8, 701,770,328.83), more revelations have emerged on how the chummy business relationship of the two organisations suddenly hit the rock. Time Nigeria exclusively reports from Lagos.
Investigation reveals that the recent economic crisis that frustrated local and multinational companies in Nigeria and inability of Ecobank to keep to the contractual terms it entered with Vigeo, frustrated the indigenous Nigeria Company from meeting its financial obligation to the bank. It has also been established that the bank dismissively frown at many attempts made by the chairman and management of Vigeo to have a roundtable discussion while the issue lingered.
Relevant sources confirmed to our correspondent that the last straw that breaks the camel’s back, as far as the loan is concerned was the failure of Ecobank to reciprocate various moves made by Vigeo to resolve the issue but resorted to a succession of questionable conducts against Vigeo Limited and its chairman.
For instance, our source revealed that, contrary to the terms of the facility agreement, Ecobank unilaterally converted the United States Dollars portion of the facility (which was the more substantial part of the facility) into Naira in spite of the written objection of Vigeo Limited to the conversion of the facility into Naira. This conversion of the United States Dollars portion of the facility to Naira was done at the black market exchange rate of N430.00 to US$1.00, as against the legally approved exchange rate of N304.00 to US$1.00 as per Central Bank of Nigeria rate further to its statutory powers.
To this end, Ecobank made a secret gain to the detriment of Vigeo Limited. In a sane society, they are bound by law to account for the difference between the open market value and black market.
By adopting this illegal conversion rate, the bank effectively increased the alleged indebtedness of Vigeo Limited by almost 50% (fifty per cent) overnight. Also without clearance or negotiation, the bank more than doubled the interest rate on the inflated loan from 11% per annum applicable to US Dollar facility to 25% per annum after the conversion to Naira.
But things took a new dimension on 7th November 2017, when the Federal High Court, sitting in Lagos and presided over by Honourable Justice Saliu Saidu granted orders of injunction against Vigeo Limited and its Chairman restraining the company from operating its accounts in about 17 banks.
Following the controversy generated by the court ruling, this reporter had dug more into the story but he met brick walls as both parties refused to comment on the development. In fact, after several calls and emails to the corporate affairs department of Ecobank, the bank only get back days after with a terse statement in few words that it couldn’t comment on the issue because it was already in court. That was also the situation with Vigeo.
But according to findings, it was discovered that the injunction was granted on the basis of an ex parte application (with no notice to Vigeo limited or no request to hear a counter argument from Vigeo limited) filed by Ecobank in respect of a facility between Ecobank and Vigeo Limited.
Meanwhile, a source had earlier admitted while feeding questions from this reporter that sometime in 2007, Vigeo Limited obtained credit facilities from then Oceanic Bank International PLC to acquire a motor tugboat. The vessel was acquired for charter as an oilfield support vessel to companies engaged in offshore exploration and production of petroleum.
It was learnt that the repayment of the facility would be from revenues generated from chartering the vessel.
“Subsequent to the grant of the facility, various factors hindered the optimal performance of the vessel. These include damages suffered by the vessel during the Bonga offshore oil platform attack in April/May 2008, as a result of which the vessel had to be taken overseas for repairs.
“The situation was compounded by the downturn in the economy, particularly, in the oil and gas industry by the collapse in oil prices from over US$100.00 to less than US$30.00 in the international market. These situations forced oil and gas companies to scale down their operation internationally and suspend new projects.
“This led to the non-renewal of the charter contract entered into by Vigeo Ltd for the vessel. Vigeo Limited consequently, met on several occasions with Ecobank in a bid to restructure the facility and also to seek a moratorium”, the source said.
It was discovered that despite the loses , Vigeo made several good faith payments to the Oceanic Bank/Ecobank from its other income sources totaling about $14million out of the $17million dollar loan. It is also supposed to have paid a sum in excess of N2billion on the Naira element of the loan, a sum far in excess of the original Naira facility sum of N750million.
Ecobank allegedly embarked on a succession of questionable conducts against Vigeo Limited and its Chairman. For instance, it was gathered that contrary to the terms of the facility agreement, Ecobank unilaterally converted the United States Dollars portion of the facility (which was the more substantial part of the facility) into Naira in spite of the written objection of Vigeo Limited to the conversion of the facility into Naira.
This conversion of the United States Dollars portion of the facility to Naira was allegedly done at the black market exchange rate of N430.00 to US$1.00, as against the legal, approved exchange rate of N304.00 to US$1.00 as per Central Bank of Nigeria rate further to its statutory powers.
By adopting this illegal conversion rate, Ecobank effectively increased the alleged indebtedness of Vigeo Limited by almost 50% (fifty per cent) overnight. Also without clearance or negotiation, the bank more than doubled the interest rate on the inflated loan from 11% per annum applicable to US Dollar facility to 25% per annum after the conversion to Naira.
Ecobank’s conversion of the facility from US Dollars to Naira in breach of the contractual terms and at the illegal and inflated black market conversion rate, together with the imposition of the excessive interest rate, fundamentally breached the facility agreement and made it impracticable to manage the facility as reconstituted, it was learnt.
Further findings have also revealed that part of the security for the facilities was a charge on the shares in blue chip companies belonging to the Chairman of Vigeo Limited. These shares are currently valued at close to N1billion. Ecobank sold these shares without notice, without advice/knowledge of owner and without recourse to Vigeo Limited or its Chairman. These shares were sold at 60% of its current value as stated in the loan statement released one year after sale.
Meanwhile, contrary to the widespread report that Vigeo was evasive to fulfilling its obligations, the company made frantic efforts to bring the bank to the table with the view of working out realistic payment plan structure.
It was also alleged that Ecobank obtained these orders by suppressing names of the account owners and misrepresenting material facts as to the true state of affairs between itself and Vigeo.