A new twist has unfolded in the war of words between Late Sonny Odogwu’s estate and Access Bank Plc over the late businessman’s estate and particularly the property located at 31-35 Ikoyi Crescent, Ikoyi.
The Ikoyi property, a proposed seven-star hotel situated at 31-35 Ikoyi Crescent has been the subject of a media war between both parties as Access bank had earlier claimed it now had the rights to the property as settlement of a default from the late Odogwu and two of his companies, SIO Properties and Robert Dyson & Diket Limited.
However, according to Punuka Attorneys & Solicitors, solicitors to the Late Sonny Odogwu, SIO Properties and Robert Dyson & Diket Limited, this is not true. The solicitors, in a newspaper advertorial, gave a detailed breakdown of their version of events.
They stated that the Bank’s subsidiary, then Diamond Capital Ltd, was the Lead Arranger for the syndication of a project finance for the project sponsor’s seven-star hotel which was to be located at 31-35 Ikoyi Crescent, Ikoyi.
Leadway Trustees was appointed the Trustee to hold the title of 31-35 Ikoyi Cresent for all Syndicate members. No security was offered to Diamond Bank (now Access Bank) because it is a project finance scenario with the security to be shared by all Syndicate members.
The project sponsor commenced execution of the project based on the assurance from the Bank as the Lead Arranger that it would be able to syndicate the project finance. Unfortunately, the Bank allegedly failed to arrange the syndication and this led to contractors threatening to pull out. While promising to put together the syndication within 90 days, it offered an unsecured bridge finance which was to be repaid from the proceeds of the syndication. The bridge finance which came in two tranches of N3.5 billion and N1.5 billion totalled N5 billion. And this was paid directly to the contractors and not the project sponsor.
According to the family’s lawyers, the project sponsor allegedly put in project equity of N5 billion apart from the cost of land and preliminary works.
However due to the inability of the Bank to put together the syndication of the project finance, the project became stranded leading to several disputes and litigation.
From the litigation process, the Bank on November 3, 2015, secured a judgement from the Federal High Court over its unsecured bridge loan. According to them, the judgment sought to create security over the project property to which the parties did not initially agree (given the nature of project finance model) thus giving the Bank an advantage over other creditors which negates the spirit of the project finance model upon which the agreement was initially entered.
Both parties eventually agreed to settle amicably and compromise their respective claims and the following Terms of the Settlement Agreement were made Consent Judgment in October 2019:
The settlement sum was N12 billion of which N1 billion was paid as a condition precedent leaving a balance of N11 billion as at the time of the Settlement Agreement on May 30, 2019.
According to the family’s lawyer, there was to be a debt asset swap in full and settlement of the outstanding N11 billion. The bank was to recover the sum from the sale of 5 properties: No 1 Lawrence Road Ikoyi, 15 Kingsway Road, Ikoyi, Apartment FN428, Dubai Property, 9372 square meters Asokoro Shopping Mall, Abuja, and 4,408 Hectares of land at Alahun Osumba, Kirikiri, Lagos.
They asserted that 31-35 Ikoyi Crescent is not part of the properties listed in the Settlement Agreement or the Addendum.
Listing all that the family had done to comply with the Settlement Agreement, he said that the family had:
Made a payment of a pre-conditional N1 billion leaving the balance of N11 billion.
Within seven days of the May 30, 2019, the family handed over the original title documents for three of the five listed properties listed in Schedule A of the Settlement Agreement as amended by the Addendum.
The Bank with cooperation from the family, sold the property at No 1 Lawrence Road and recovered a net sum of N1.5 Billion.
The Bank also sold the property at No 15 Kingsway Road Ikoyi and recovered the net sum of N1.5 billion. It has also recovered the sum of $8,000,000(about N2.8Bn) from the Berendo property in California, USA.
Although the family has also handed over the Dubai property to the Bank, the Bank has however not appointed a Dubai lawyer to help it realize the property neither has it taken any steps to take possession. This asset is said by the family, to be worth close to $2m.
The Bank they say is also 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 N4billion.
They allege that the total cash that has been received by the Bank from the realization of assets and cash paid is over N8 billion and this is more than the settlement sum and way above the principal amount lent to the project. They maintain that the Bank also still has in its possession title documents of the three properties in Abuja, Kiri Kiri and Dubai.
According to them, the Project sponsor has a history of successful developments in the hospitality sector which includes projects like Grand Hotel, Asaba and other investments in other areas of the economy. However, the project finance was botched by the bank due to its failure to arrange for the project syndication finance repeatedly and this was the beginning of issues.
The law firm says the Odogwu family is today paying for the incompetence of the bank in raising the syndication of the project finance and deliberately refusing to keep to the promises stated in the Settlement Agreement, Consent and Release Agreement, Addendum and Unconditional Stay and Consent Judgment.
They concluded that the story indeed is not that of a dodgy and sinful debtor but rather a clumsy, deviant, and exploitative creditor who has no regard for the rule of law.
Read the full response
here.
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