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FinBank on Wednesday asked an Abuja High Court to dismiss an N850 million lawsuit accusing it of defaulting on a loan agreement.

The bank is being sued by Osino Holdings LTD, an indigenous company, for fraud and deceit over the non-payment of a loan.

At the resumed
hearing of the case on Tuesday, the presiding judge, Olasunbo Goodluck,
granted the bank an extension of time to file its statement of defence,
and a hearing fixed for September 28.

History of the case

Osino Holdings said
that on January 21, 2008, it applied for a loan of N130 million through
the bank so that it could buy the Goldstar Petroleum Station in Kaduna.
According to the chairman of the company, Emmanuel Osita Okereke, the
bank asked for a N30 million equity contribution and promised to pay
out the loan within a few days.

“I made several
trips to Lagos to hold meetings with the bank’s group head of private
banking, Chinwe Attanbansi,” said Mr. Okereke.

“It was in one of
such meetings that she assured me that as soon as the [my company] can
pay its equity contribution, the loan would be disbursed to it,” he
said.

Mr. Okereke said a
bank draft of N30 million was issued to the bank on May 13, 2008,
though it was not cashed until June 23 – over a month after the draft
was handed over. After the bank’s assurances of the disbursement of the
loan, the company started to invest in the Kaduna filling station.

However, he said
that after payment, the bank insisted on evidence of landed property as
collateral for the loan. The chairman said he complied with the request
for additional collateral, but said that as at December 2009, he had
still not received any money from the loan.

“The defendants’
refusal or neglect to disburse the loan as assured, has led to the
plaintiff’s heavy loss on investment in the said Goldstar Filling
Station in Kaduna,” read court documents.

Mr. Okereke accused
the bank of collecting the draft from his company for almost two years
to boost its profile. Osino Holdings LTD is now asking the court to ask
the bank to reimburse its N30 million equity contribution at the
current lending rate. The company is also asking the bank to pay it
N850 million as general damages for the loss it suffered during the
transaction.