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Guaranty Trust Bank (GTBank) has filed a lawsuit against Demola Shogunle’s Stanbic IBTC, Standard Chartered Bank, Jaiz Bank, the Nigeria Deposit Insurance Corporation (NDIC) as the liquidator for Heritage Bank, and 56 top executives from 13 commercial banks. This action is part of an ongoing dispute between GTBank and Afex Commodity Exchange over a N17 billion loan under the Anchor Borrowers Programme.
The executives, including chairmen, CEOs, directors, and company secretaries, are facing contempt charges for allegedly ignoring a No-Debit-Order on Afex Commodity Exchange’s accounts with these banks.
In the suit, numbered FHC/L/CS/911/2024, the Federal High Court in Lagos, presided over by Justice CJ Aneke, signed an order for the bank officials to be committed to jail for failing to comply with its May 27, 2024, ruling. The court directed twenty banks to transfer funds from Afex’s accounts to GTBank until the N17.81 billion debt is repaid. The loan comprises N15.77 billion in outstanding debt as of April 17, 2024, and N2.04 billion in recovery costs.
Additionally, the court granted GTBank an injunction to take over and sell commodities stored in Afex’s 16 warehouses, which were financed through the Central Bank of Nigeria’s (CBN) Anchor Borrowers’ loan facility.
GTBank’s legal notice, published in national dailies including The PUNCH, announced the court’s decision to proceed with contempt charges against the executives from Access Bank, Citibank, Jaiz Bank, Union Bank, Fidelity Bank, First Bank of Nigeria Plc, First City Monument Bank, NDIC, Polaris Bank, Stanbic IBTC Bank, Standard Chartered Bank, Taj Bank, United Bank for Africa, and Zenith Bank.
Earlier, the court had initiated contempt proceedings against Afex and some of its key officers. Afex had obtained the loan from GTBank to finance smallholder farmers under the CBN’s programme. Despite extensions, Afex failed to fully repay the loan.
Afex, in its defense, stated it had repaid 90% of the loan but struggled with the remaining balance due to economic challenges faced by the farmers. The company urged the CBN to activate a collateral guarantee clause in the programme to mitigate the losses.
The Anchor Borrowers’ Programme, launched in 2015, aimed to link smallholder farmers with processors to boost agricultural output and stabilize food prices. By 2022, over 4.8 million people had benefited from the programme. However, the CBN has since discontinued the programme, shifting focus back to its core functions of price and monetary stability.
The court has adjourned the matter to next Thursday.
