Federal Court Orders GTBank to Seize Afex’s Assets in Nigeria Over N17.8 Billion Debt
A Federal High Court in Lagos has issued an interim ruling instructing Guaranty Trust Bank (GTBank) to temporarily seize Afex Commodities Exchange’s assets due to an outstanding debt of N17.808 billion linked to the Anchor Borrowers Programme of the Central Bank of Nigeria (CBN). Justice Chukwujekwu Aneke delivered the ruling on Wednesday in response to GTBank’s application dated May 27, 2024.
The Anchor Borrowers Programme (ABP) was initiated by the CBN in November 2015 to foster economic ties between Small Holder Farmers (SHF) and Anchors.
Chief Anthony Aribisala (SAN), representing GTBank, filed a lawsuit against Afex with the suit number FHC/L/CS/911/2024, naming 27 banks as nominal respondents. Aribisala argued that Afex had failed to repay a multi-billion naira loan approved by GTBank, violating relevant CBN guidelines and regulations. He stated that the N17.808 billion debt comprised the outstanding loan amount of N15.766 billion as of April 17, 2024, along with accrued interest, pre-judgement interest, and recovery costs.
According to the affidavit filed by GTBank’s staff member, Ifeoma Esemudje, the loan’s tenor was nine months, with an April 22, 2021 maturity date, which Afex allegedly failed to meet. GTBank requested the court to grant an interim Global Standing Instruction (GSI) against Afex’s funds and assets until the dispute is resolved. GSI is a financial regulation aimed at enhancing credit repayment practices and reducing Non-Performing Loans.
Justice Aneke granted GTBank’s request for an interim restriction on Afex’s financial transactions and assets. He ordered a “Place a No Debit” on all funds in Afex’s accounts with Nigerian banks and directed the transfer of these funds to GTBank’s account. Additionally, the court instructed the police and Civil Defence Corp to assist GTBank in securing Afex’s commodities warehoused in seven states. The ruling will remain in effect until Afex’s entire debt to GTBank is settled. The case is adjourned for a hearing on June 10, 2024.
Afex Commodities, as an anchor, received N169.27 billion from the CBN, disbursing it to 483,476 farmers across 865,258 hectares of land. GTBank is pursuing legal action to recover the funds allegedly owed by Afex. Afex’s legal team will have the opportunity to respond before the court issues a final verdict.
