N156 Billion Debt Recovery Suit: Stallion Group appeals ruling upholding UBA’s appointment of receiver/manager

Stallion Group has filed an appeal against Friday’s decision of the Federal High Court, Lagos, which upheld the appointment of a receiver/manager by the United Bank for Africa (UBA) in a N156 billion debt recovery suit.

In a statement issued on Friday and seen by PREMIUM TIMES, the group said it vehemently disagrees with the ruling and will vigorously pursue the appeal.

“Having reviewed the judgment with its legal advisers, the Group considers that there are strong grounds for appellate review and is determined to pursue its rights through the courts,” it stated.

“A Notice of Appeal has been filed at the Court of Appeal and a stay of execution of the judgment pending the hearing and determination of the appeal,” it went further to say.

Earlier on Friday, the Lagos court upheld UBA’s appointment of a receiver/manager, Romeo Ese, over the assets of Stallion Group and its subsidiaries as valid.

In his ruling, Justice Daniel Osiagor granted all the reliefs the bank sought and affirmed the court’s jurisdiction to hear the case.

The court also affirmed the right of the receiver/manager, Romeo Ese, to take possession of the mortgaged property, declaring him to be entitled to seek protective orders.

Similarly, it affirmed the right of the receiver/manager to take possession of the mortgaged property, the enforceability of the mortgage security and the liability of the guarantors.

Justice Osiagor dismissed the objections raised by Barbados Ventures Limited, the 12th Defendant, holding that it failed to establish any proprietary rights over the mortgaged property.

The court restrained the defendants from diverting the receivables due to them from government agencies, reinforcing the bank’s ability to protect its recovery interests.

The ruling affirmed the guarantors’ liability, strengthening UBA’s legal position to recover the outstanding obligations.

Background

In 2014, UBA availed several loan facilities to Stallion Nigeria Limited on the understanding that the credit facilities could be used by other companies within the Stallion Group in accordance with the terms of the offer letter, the bank said.

According to the lender, the defendants pledged assets in Kano, Port Harcourt and Lagos as security for the loans.

An affidavit deposed to by Anthony Chilaka, the group head, Recovery and Remedial Management Department of UBA, on 18 October 2023 showed that Sunil Vaswani, the chairman of Stallion Group, made a personal guarantee regarding the facilities.

Stallion Motors secured a contract from the Federal Government in 2014 to supply 700 Ashok Leyland trucks/Stallion troop-carrying vehicles and 50 Falcon seater buses to be used by the military on the agreement that the receivables from the government would be paid into Stallion’s account with UBA, the bank claimed.

On delivering the vehicles, Stallion Motors allegedly directed the government to make an initial payment of $50 million into its Dubai account and received N8.2 billion into its offshore account instead of the UBA account, contrary to the earlier understanding between the parties.

UBA said the defendants failed to settle their debts totalling N156 billion.

Acting on an order of the Federal High Court, Lagos, in November 2023, UBA took over Stallion Group’s assets and those of its subsidiaries in Lagos, Kano, and Port Harcourt as part of the debt recovery push.

The assets comprised mortgaged property known as “all that piece or parcel of land together with any building thereon” at Plot 371, Trans Amadi Industrial Layout, Port Harcourt, Rivers State.

“Plot 353, Trans Amadi Industrial Layout, Port Harcourt, Rivers State, Plot 370, Trans Amadi Industrial Layout, Port Harcourt, Rivers State, KM17, Lagos-Badagry Expressway, Lagos State and No. 54, Challawa Industrial Estate, Kano State, Nigeria.”

READ ALSO: Court upholds appointment of receiver/manager in UBAs debt recovery suit against Stallion Group.

In October 2023, UBA secured interim orders to enforce its security over the pledged assets.

Stallion Group claimed in November 2023 that it made substantial repayments and had initiated talks to reconcile and restructure the account.

In July 2024, Justice Akintayo Aluko of the Federal High Court, Lagos, noted that he had been informed by the chief judge that a counsel to one of the defendants had requested that the case be transferred from his court