The management of Innoson Nigeria Limited has asked Guarantee Trust Bank(GTB) to convert its judgment debt of about N2.4 billion and the interest accruals of about N6.7 billion to shares in the name of the company.
Innoson’s Head of Corporate Communications, Cornel Osigwe in a statement yesterday suggested that converting the debt to shares would save the planned takeover of the Bank by Innoson.
Osigwe in the statement said GTB’s bid to stop Innoson from taking it over nosedived last Friday, when the Federal High Court sitting in Ibadan refused to hear or grant an injunction to restrain Innoson from continuing to levy execution against it.
Osigwe added that the court also refused to stay execution of the judgment.
“Despite the decision of the Supreme Court on February 27th, 2019 dismissing the appeal by Guaranty Trust Bank (GTB) and affirming thereby the judgment of Court of Appeal, Ibadan division and Federal High Court Ibadan which ordered GTB by way of Garnishee Order Absolute to pay Innoson Nigeria Ltd the sum of N2.4 billion with a 22% interest, per annum, on the judgment sum until the final liquidation of the judgment debt, the bank is yet to comply with this order,” he said.
Osigwe further explained that in a garnishee proceedings, once an order of garnishee nisi is made, the garnishee is required by law to set the amount involved aside and will not allow the judgment debtor to withdraw from it; and if the order is made absolute, the garnishee pays the money to the judgment creditor and incurs no liability for doing that but if the order is not made absolute the garnishee returns the money to the judgment debtor.
“It will be recalled that the order was made absolute since 29th July, 2011 and GTB held unto the money from that time and is using it for its business. It follows that by the time the order was made absolute it was no more the judgment debtor’s money but rather that of Innoson Nigeria Ltd who is the judgment creditor; if a garnishee refuses to comply with the order, then, it becomes a judgment debtor, as GTB has become in the present case, against whom execution of the order will issue,” Osigwe said.
He, however, observed that GTB had deposed to an affidavit in the court that its banking operation will be seriously and adversely affected, and also its capital base eroded if it complies with the order of the court.
Osigwe said; “Based on the foregoing and in furtherance of the letter to GTB by Counsel to Innoson Nigeria Ltd, McCarthy Mbadugha & Co. on March 25th,2019 that it pays the N2.4b judgment debt to Innoson Nigeria Ltd with the accrued interest of N6,717,909,849.96.
“ Innoson Nigeria Ltd therefore demands from GTB that if it’s banking operation will be seriously and adversely affected, and its capital base eroded as a result of the N8.7b judgment debt, that it should as a matter of utmost urgency convert the said sum or part of it into shares and allot same to Innoson Nigeria Ltd.”