The Federal High Court in Lagos ordered Stanbic IBTC Bank to pay a customer N2.5 billion for breach of contract.
Justice Charles Achibong ruled that the bank acted “unwise and unprofessionally” when it sold the customer’s shares below the mandated N15 per share.
The court disregarded the defendant’s claim that it acted on an electronic mail (e-mail) from the customer, holding that having not been signed by parties, such document could not be relied on.
The court held that ‘Longterm’ and its Chief Executive Officer (CEO) Patrick Akinkuotu established their claim that their accounts were manipulated.
Justice Achibong declared that the bank was cavalier in the handling of the plaintiffs’ business, and ordered it to return to them all stocks and share certificates held as security for a loan it once granted them.
The court also discharged the plaintiffs from any indebtedness to the bank. It held that the loss suffered by the plaintiffs as a result of the defendant’s unprofessional conduct has obliterated whatever the plaintiffs owed the defendant.
It dismissed the defendant’s counter-claim for lacking in merit and awarded N150, 000 as cost against the bank.
The plaintiffs in the suit accused the bank of manipulating their accounts with the aim of retaining its hold on the shares they pledged as collateral.
The shares included 10,828,216 units of Guinness Nigeria Plc, 4,000, 000 of Union Bank Plc and 6,300,000 of the West African Portland Cement Company Plc, with which they had secured the loan of about N1. 25 billion, from the bank in 2007.
They also accused the bank of not reflecting most of the repayment they made.
The plaintiffs averred that in furtherance of the repayment effort, they instructed the bank to sell their shares in GT Bank Plc, totaling 28, 745,400 units, (which were not part of the deposited shares) at a price not below N15 per unitx, because they aimed to realise N431,181,000.
They added that contrary to their instruction, the bank “negligently and unprofessionally sold” the GT Bank shares at prices ranging between N8 plus and N9 plus on May 7 last year, a day after the price of the shares was reduced by the Nigerian Stock Exchange (NSE) due to the bonus and dividends declared by GT Bank.
The plaintiffs accused the defendant of wrongly selling their shares at N260, 876,903.21 as against their expected income of N431, 181,000 resulting in a loss of N170, 304,096.76.
They also accused the bank of breaching the terms of their agreement by allegedly charging interest in excess of the agreed 16 per cent per annum, failing to inform them when it (the defendant) allegedly altered the interest rate beyond 16 per cent and alleged failure to remit deposited funds.
The plaintiffs cited cases where the defendant allegedly failed to credit Longterm account with a deposit of N212, 720 and where their accounts were debited with N37, 625,642.59 which resulted from excess interest charges.
They averred that the defendant, on being confronted with evidence of excess interest charges, refunded N1.9million, about N35.7m was still outstanding.
They argued that despite having fully repaid the loan, the bank has refused to yield possession of the shares with which they secured the facility. They added that not only did the bank continue to charge them interest; its refusal to release the shares has hampered their businesses.
The plaintiffs, who claimed N7billion against the defendant as general and aggravated damages, urged the court to among others, direct the bank to release the shares, restrain it from exercising any right of ownership over the shares and to further restrain it and its agents from selling the shares
