January 1, 2022 Uncategorized 0

The Rejoinder of one Kemi Balogun SAN on behalf of Access Bank Plc published in Thisday Newspaper of Friday, December 24, 2021, refers. We have the instructions of our clients to respond to it as follows:
It is unfortunate that a “prestigious” bank, like Access Bank Plc, listed on NGX and regulated by SEC and CBN and its “illustrious” counsel Kemi Balogun SAN, engage in boastful, public, and desperate self-help measures. Their actions of trespassing on their customer’s property at 31-35 Ikoyi Crescent Ikoyi and unlawfully purporting to have sold it to one inactive company called Siete Trading Limited, in apparent self-dealing amount to a flagrant breach of the rule of law in Nigeria. In addition, they are engaging in a pathetic campaign of calumny against the person of the deceased Chief Sonny Odogwu CFR, a business titan, to cover up their scheme of unlawfully plundering his Estate, breaching their legal undertaking not to do so.
We want the facts to speak and show that the Bank’s words are not worth the paper on which it is written as the following points reiterate:
A Project Finance botched by the bank and disputes arising

  1. The engagement of the Bank through its subsidiary, then Diamond Capital Ltd, was Lead Arranger for the syndication of project finance for the project sponsor’s seven-star hotel to be at 31-35 Ikoyi Crescent Ikoyi, Lagos. The project sponsor has a history of success in the hospitality industry with Grand Hotel, Asaba and other investments in various areas of the economy.
  2. In a project finance model, the Lead Arranger acknowledges that the project is beyond its capacity to fund and arranges other financiers in syndication. Also, the project finance model is non-recourse to the project sponsor, whose only obligation is to put in the required equity portion of the project. The recourse for repayment of the loan is the project’s cash flow on completion. The security, which all syndicate members share, is the project itself.
  3. In this case, Leadway Trustees was appointed the Trustee to hold the title to 31-35 Ikoyi Crescent Ikoyi for all the syndicate members. No security was offered to Diamond Bank now Access Bank because as explained in paragraph 2 above, this was project finance with the security to be shared by syndicate members.
  4. Based on the assurances of the Bank as Lead Arranger that it would be able to syndicate the project finance, the project sponsor commenced execution of the project. Unfortunately, the Bank failed to arrange the syndication, and the contractors threatened to pull out of the site. At this stage, the Bank assured the project sponsor that it would put the syndication in place in 90 days and offered unsecured bridge finance to the project to be repaid from the syndication proceeds. The objective was to avoid disruption of the project. The bridge finance came in two tranches of N3.5 billion and N1.5 billion, making a total of N5 Billion paid directly to the contractors and not the project sponsor. The project sponsor put into the project equity of over N5 Billion apart from the land cost and preliminary works.
  5. The Bank again failed to arrange the syndication of the project finance. The result of the Bank’s failure as Lead Arranger was that the project became stranded, and the bridge finance was unresolved, leading to several disputes and litigation. As a result, the Bank obtained a judgment at the Federal High Court on November 3, 2015 (also referred to as Original Judgment) over its unsecured bridge loan. By the Original Judgment, the court sought to create security over the project property to which the parties did not initially agree, giving the Bank a preference over other creditors in breach of the project finance model explained earlier. This judgment made it impossible for the project to continue as project finance when the sponsor directly sought alternative financing. Apart from the appeal against the Original Judgement, the project sponsor also maintained a damages claim for breach of duty as Lead Arranger against the Bank.
  6. In those circumstances, the parties agreed to settle the dispute amicably and compromise their respective claims pending before the courts.
  7. The parties signed a Settlement Agreement dated May 30, 2019, Consent and Release Agreement dated May 30, 2019 and Addendum to the Settlement Agreement dated July 26, 2019. The Addendum substituted the Kingsway Road Ikoyi property for the London property with which the Bank became uncomfortable. The Bank never complained about any of the other properties it accepted in exchange for the debt, and Schedule B to the Settlement Agreement gave full disclosure of the state of possession of the properties. However, in the Bank’s current sponsored media campaign through different writers in breach of the Settlement Agreement, the writers including the publication by one Kemi Balogun SAN failed to disclose to the public that there is a Settlement Agreement or that the Original Judgment sum had been compromised to N12 Billion (Twelve Billion Naira).

Terms of the Settlement Agreement made Consent Judgment in October 2019

  1. The Bank failed to disclose the terms of the Settlement Agreement and the Addendum and the parties’ level of compliance with them. We now do so:

a. The Settlement Sum was N12 Billion, and N1 Billion was paid as a condition precedent leaving a balance of N11 Billion as at the time of Settlement Agreement on May 30, 2019. There was no provision for interest payment.
b. It was a debt for asset swap in full and final settlement of the outstanding obligation of N11 Billion. The Bank was to recover the amount from the realization of five (5) properties listed in Schedule A and USD 11 111 111.11 (Eleven Million, One Hundred and Eleven Thousand One Hundred and Eleven Dollars and Eleven Cents) to be realized from Berendo property located in California, USA.
c. The five properties listed in Schedule A and the Addendum are No 1 Lawrence Rd, Ikoyi, 15 Kingsway Rd (Alfred Rewani), Ikoyi, Apartment FN428 Dubai Property, 9372 square meters Asokoro Shopping Mall Abuja Property and 4.408 Hectares of land at Alahun Osunba Kirkiri Property.
d. None of the above properties is part of the Original judgment, and 31-35 Ikoyi Crescent is not part of the properties listed in Schedule A and is not part of the Settlement Agreement or the Addendum. The exclusion of 31-35 Ikoyi Crescent Ikoyi was deliberate and understood by the parties because encumbering it in any way would render the project unviable for project finance. This explains why the family gave up a total of six properties, including the Berendo USA asset.
e. It was a term of the Settlement Agreement that the Original Judgment was compromised in consideration of the asset swap Settlement Agreement. As a result, the Bank signed an unconditional undertaking not to enforce the judgment. Conversely, the Odogwu family agreed to withdraw their appeal at the Court of Appeal, and the parties agreed to enter the settlement as Consent Judgment. The parties also agreed that in the case of a breach of the Settlement Agreement, the only relief available to the parties is enforcement of the Settlement Agreement. Consequently, parties cannot resort to the Original Judgment.
f. It was a further term of the Settlement Agreement that the Bank will not scandalize or smear the name and image of the late Chief Sonny Odogwu, the alter ego of the project sponsor.
g. The parties also understood that the properties offered far exceeded the outstanding sum of N11 Billion. Therefore, any excess recovered from the realization of the assets is to be delivered to the family.
h. In entering into the Settlement Agreement negotiated by their external legal adviser, one Kemi Balogun SAN and the Managing Director of the Bank, one Mr. Herbert Wigwe personally, it is assumed that the Bank assessed the risk as competent professionals before endorsing the deal. The risk would have included losing the benefit of the Original Judgment if the project sponsor’s appeal was successful and the potential success of the claim for damages against the Bank for breach of duty as Lead Arranger for the failed syndication of project finance for the project. The further assumption is that the Bank would have assessed the recovery risk on a pure asset swap arrangement as prudent bankers. Indeed, the Bank acknowledged expressly in the Settlement Agreement which the parties jointly drafted that it had been fully and independently advised during the negotiations leading to the Settlement. The Bank even went further to request and obtain a substitution of one property from the family leading to an Addendum Agreement executed by both parties to satisfy the Bank.

i. In line with the Settlement Agreement and Addendum, the parties filed the documents before the Federal High Court on October 9, 2019. It was made Consent Judgement on October 11, 2019, with counsel for the family and the Bank present. In line with the Settlement Agreement, the family withdrew their appeal against the Original Judgment and discontinued prosecution of their damages claim with respect to the Failed Project Finance.

Compliance and performance of the Settlement by the Odogwu family

  1. Under the Settlement Agreement, the family did the following to implement the settlement, thereby altering their position and providing the consideration for the settlement.
    a. Paid the preconditional N1 Billion, leaving the balance of N11 Billion.
    b. Within seven days of the May 30, 2019, Settlement Agreement, the family handed over the original title documents for three of the five properties listed in Schedule A of the Settlement Agreement as amended by the Addendum. The title documents were personally collected by Mr. Robert Imowo, the in-house lawyer of the Bank, from Mr. Emeka Odogwu on June 3, 2019, and he signed for them. The sale of the two properties at Lawrence Rd and Kingsway Rd took place immediately upon execution of the Settlement Agreement. The buyers received the title documents and value delivered to the Bank. The transactions quickly concluded to the satisfaction of the Bank, subject to comments below concerning the family’s perspective.
    c. The Bank, with the cooperation of the family, sold No 1 Lawrence Road and recovered a net sum of N1.5 billion even though the Bank has been opaque about the net recovery and has never provided the family with any account of the net receipt.
    d. The Bank, with the cooperation of the family, sold No 15 Kingsway Road Ikoyi and recovered the net sum of N1.5 billion. The same opaqueness applies concerning the net receipt from the sale of the Kingsway Road property.
    e. The Bank, with the cooperation of the family, has recovered the sum of USD 8 000 000. 00 (Eight Million United States Dollars) from the Berendo property in California, USA, a large portion of which was affected by a fire incident leaving a balance of USD 3,111,111.11(Three Million, One Hundred and Eleven Thousand, One Hundred and Eleven Dollars, Eleven Cents) yet to be recovered from the property’s insurance. In this regard, the Bank appointed a US lawyer who has been working with the family’s US counsel on realization from the Berendo property.
    f. Although the family gave the title documents to the Dubai property to the Bank, the Bank is yet to appoint a Dubai lawyer to realize the property or take any steps to take possession. As a result, the family has had to protect the property from fraudulent transfer by a Russian syndicate and maintain control of the property since the Settlement Agreement. However, the family had no obligation once it signed the Settlement Agreement and handed the title document to the Bank. Given the deliberate reluctance of the Bank at some point to proceed with implementing their portion of the Settlement Agreement but instead focusing on illegally grabbing the property at 31-35 Ikoyi Crescent Ikoyi, the family had to intervene to save the Dubai property. The Dubai property, as of today, remains available to the Bank, but the Bank has failed, refused, or neglected to realize the asset said to be worth close to USD 2 million.
    g. Also, the Bank is sitting on the title document of the Abuja property and has failed, neglected, or refused to realize the property said to be worth at least N4 Billion.
    h. Further, on the Kiri Kiri property, the Bank complained to the family that the remainder on the lease title of nine (9) years was too short for practical realization. The family assisted the Bank in renewing the lease for another fifty (50) years, the equivalent of the original title over the land owned by the project sponsor(s). In addition, the Bank sold a nearby property that was less than 10 percent the size of the Kiri Kiri property for N1 billion. The Banks experience indicates the potential realization from the sale of the Kiri Kiri property. The Bank failed, refused, and neglected to realize the property claiming that they were prevented from realizing the asset because of the absence of vacant possession despite full disclosure in Schedule B to the Settlement Agreement as to possession. The Bank was fully aware of the situation of possession of the property when they signed the agreement. Selective facts by the Bank
  2. In its sponsored media publications, the Bank failed to disclose that the property listed in Schedule A to the Settlement Agreement, No. 1 Lawrence Road (Tom Hawksworth Street), had been sold with the family’s full cooperation and value received by the Bank.
  3. The Bank, in their sponsored publications, failed to disclose that the property listed in Schedule A, 15 Kingsway Road, had been sold with the full cooperation of the family with a vast amount recovered by the Bank.
  4. The Bank also failed to disclose that Berendo Property in California has generated USD 8 million equivalent of N2.88 billion at the then agreed rate of N360 to USD1. The parties are still working with their US-based lawyers to process further insurance claims on the property for an additional USD3.1milion following a fire incident. The sum will meet the balance due from the Berendo property at the agreed conversion rate of N360 to bring the total recoverable from Berendo to N4 Billion. The generously agreed conversion rate means that the Bank effectively received N4.6 billion when it got the USD 8 million in March 2021, thereby adequately hedging Naira depreciation.
  5. In his publication one Kemi Balogun SAN for the Bank falsely asserted that the family failed to hand over the original title documents to the properties listed in Schedule A to the Settlement Agreement within seven days of the agreement.

Lack of integrity and disregard for due process and rule of law

  1. The total cash received by the Bank so far from the realization of assets and cash paid is over N8 Billion, which is over two-third of the Settlement Sum and way above the initial Principal Amount lent to the project. In addition, the Bank still has in its possession title documents of three (3) properties in Abuja, Kiri and Dubai as listed in Schedule A of the Settlement Agreement as amended by the Addendum worth over N12 billion Naira.
  2. Despite the Settlement Agreement and Addendum, the actions of the family implementing their portion of the agreement and the Bank receiving value and holding over assets worth more than the obligation, the Bank now calls the Settlement Agreement it signed and executed by the parties and the follow-up Consent Judgment “purported,” showing a grave disregard for their contractual obligation. This is not the first time the word of the Bank would be worth less than the paper on which it is written. Recall that the Bank failed in arranging the project finance that would have repaid the bridge loan of N5 Billion. The Bank, instead of keeping to its word to arrange the syndication, resorted to litigation to procure court-ordered security for the bridge finance.
  3. In a further breach of the rule of law, the Bank and its counsel now assert that “ the train has left the station” as justification for their resort to self-help in trespassing on 31-35 Ikoyi Crescent Ikoyi on December 18, 2021. No one can fathom where the Bank derived title in the purported execution of an unlawfulproperty sale to a company named Siete Trading Limited. Under the Settlement Agreement, the only execution option available to the Bank is to enforce the Settlement Agreement and Consent Judgment. They have no choice of reverting to the Original judgment as Article 2 of the Settlement Agreement and the Consent Judgement explicitly exclude reverting to the Original Judgment. Even under the Original Judgment, the Bank did not comply with any execution procedure provided by Nigerian law. This is pure Jankara gangsterism!
  4. After the unlawful invasion of 31-35 Ikoyi Crescent Ikoyi on or about December 18, 2021, the Bank, on December 20, 2021, filed a case at the Federal High Court seeking to obtain an injunction to protect its unlawful possession of the property at 31-35 Ikoyi Crescent Ikoyi and to set aside the Consent Judgment. So, they disregard the Consent Judgment they obtained from the Court, use self -help and now want the same Court system to legitimize their illegal action, including through perjury that original title documents were not handed over to the Bank.
  5. In its publication, the Bank did not disclose to the public that it undertook and is bound by the Settlement Agreement and Consent Judgment not to enforce the Original Judgment. Therefore, the only relief available to the Bank is to execute and implement the Settlement Agreement and Consent Judgment. On the other hand, the family has performed their obligation under the Settlement Agreement and Consent Judgment.
  6. In signing the Settlement Agreement and entering the Consent Judgment, the Bank used the same counsel who now unprofessionally seeks to resile from the terms agreed. The family has acted upon the agreement giving away properties and monies not covered by the Original Judgment in the confidence that the Bank’s promise and agreement meant something binding under Nigeria Law and that the words of the Bank would be worth more than the paper on which it is written.
  7. If the family’s assumption is correct that the Bank knew what it was doing when it signed the Settlement Agreement and took over the properties of the family in exchange for the debt and compromising the Original Judgment, then the Bank and their counsel’s current actions show a brazen disrespect and disregard for Nigerian Law. Alternatively, assuming the Bank and their counsel did not know what they were doing when they signed the Settlement Agreement and took over the family’s properties in exchange for the debt, the Bank and their counsel were grossly incompetent in risk assessment. This latter assumption is for the Bank’s Board and regulators to consider dealing with it. However, from the legal point of view, Pacta Sunt Servanda is applicable, and the promises made in the Settlement Agreement are binding on the Bank.
  8. The original debt is the sum of N5 Billion in two tranches of N3.5 billion and N1.5 billion. Everything else is interest charges. A payment of N12 Billion was a fair settlement amount. The family has adequately provided for it. The Bank has received over N8 Billion in cash and is still holding properties far above the balance of N4 Billion in a debt for asset swap. In the Settlement Agreement, the Bank also undertook that it would only resort to the assigned properties to recover the debt and so has no right to unlawfully invade the property at 31-35 Ikoyi Crescent Ikoyi, which is not one of the assigned properties.
  9. The Bank agreed to a debt asset swap. The family was wholly discharged from its responsibilities once it gave the properties but remains available to assist the Bank in realizing the assets it is yet to realize. However, the overbearing interest of the Bank in the property at 31-35 Ikoyi Crescent, Ikoyi is of concern and the use of self-help by the Bank and bragging about it, destroys the rule of law and we must deprecate not condone such attitude.
  10. The action of the Bank and the apparent untruth in carrying out this illegal act of property invasion and purported unlawful sale must be discouraged. The project finance failed due to the inability and incompetence of the Bank in raising the syndicated loan. The Settlement Agreement resolved the resulting litigation.
  11. Chief Sonny Odogwu, during his career, created wealth and employment for Nigerians and was an honest project sponsor who met his legitimate obligations. He put in over N5 Billion of his equity in the project. However, he sadly found out that the Bank, despite assurances, could not syndicate the project finance.
  12. The Bank’s failure to syndicate the project finance led to constant rollover of the bridge loan and the various schemes of the Bank to secure it, which the project sponsor resisted, leading to the now compromised Original Judgment and other cases.
  13. The truth is bitter, but anybody who wants to point fingers and call others “dodgy debtors” or “sinner” should look at themselves as creditors and lawyers. The idea of an honest debtor being a “sinner” or “dodgy” is archaic, given the new business rescue philosophy of CAMA 2020 which is in accordance with international best practice. It is also not justified on the facts of the case given the security warily provided by the family in the Settlement Agreement for what was essentially an unsecured bridge loan. The Bank took a risk that it would raise the syndication of the project finance, so the unsecured bridge loan was a “no brainer” as the Bank was the Lead Arranger. However, today the family of Chief Sonny Odogwu is paying for the incompetence of the Bank in failing to raise the syndication of the project finance and failing to or deliberately refusing to keep to promises exchanged in the Settlement Agreement, Consent and Release Agreement, Addendum, Unconditional Stay and Consent Judgment.
  14. In conclusion, the story is not of a dodgy, sinful debtor but a clumsy, deviant, exploitative creditor who has no respect for the rule of law. We must restore confidence in the transparency of the banking system, and the rule of law must prevail.
    Anthony Idigbe SAN
    Counsel to the Estate of the Late Chief Sonny Odogwu CFR, SIO Properties Limited
    and Robert Dyson and Diket Limited
    PUNUKA Attorneys & Solicitors
    www.punuka.com info@punuka.com

About the author

Jude Igbanoi:


Would you like to share your thoughts?

Your email address will not be published. Required fields are marked *

Leave a Reply