First City Monument Bank (FCMB) has responded to report on finance house Cool Financial Services’ lawsuit against it after a customer was able to withdraw a N150 million loan from a frozen bank account.

FCMB wrote a day after the report was published and three weeks after the initial request for comments was sent.

“FCMB believes the lawsuit filed by Cool Financial Services is without merit, as the bank had no contractual or fiduciary obligations to them,” the bank stated in an email on Thursday.

We had earlier reported that Cool Financial Services, a finance house based in Lagos State, lent Goewe and Sons Ltd., a supplier, a loan facility of N150 million in 2023 and the said loan was to be deposited in the borrower’s account domiciled at FCMB untouched.

At the expiration of the loan tenor, the lender was surprised to discover that the N150 million had been withdrawn from the account without its knowledge despite an earlier mandate stating that only the lender could authorise the withdrawal of that amount from the account.

Prior to the publication, FCMB had been requesting for one week after another week to investigate and respond to request for comments. We went to press on Wednesday, three weeks later.

A day after publication, however, FCMB responded with claims that the N150 million withdrawal was properly done and that it had no customer-banker relationship with the lender at the time of the loan transaction.

“To set the record straight, FCMB categorically states that it had no contractual relationship, express or implied, with Cool Financial Services concerning the N150 million. Claims of a fiduciary relationship or contractual obligations are without merit,” Adeola Adejokun, FCMB’s head of communications, wrote in an email on Thursday.

“Contrary to Cool Financial Services’ claims, they opened an account with FCMB on February 21, 2024. Therefore, no banker-customer relationship existed between FCMB and Cool Financial Services during their dispute with Goewe and Sons Ltd.”

The lender had earlier said, with documents in tow, that the borrower made it a ‘Category A’ signatory to the loan account to keep it informed of any activity on the account holding the N150 million. An email address of the lender’s representative requested to be added in addition to the new mandate instruction.

While admitting the fact stated above, FCMB said the dissipation of the loan sum from the account followed legal procedures.

“FCMB was not a party to any agreement that was said to have involved Cool Financial Services and Goewe and Sons Ltd. No arrangements existed that obligated FCMB to act on behalf of Cool Financial Services regarding the management of the disputed funds,” the bank’s Thursday email read.

“Goewe and Sons Ltd., an FCMB customer, received a standard loan facility secured by a lien on their deposit account, as detailed in the loan agreement dated July 24, 2023. While a representative from Cool Financial Services was listed as a co-signatory on one of Goewe and Sons Ltd.’s accounts, FCMB acted according to the legally provided account mandates.

“Subsequently, Goewe and Sons Ltd. changed the mandate following due process, and FCMB was under no obligation to seek authorisation from Cool Financial Services for this change.”

Similar to the borrower’s response to FIJ, the bank stated the loan had been repaid.

“Goewe and Sons Nigeria Limited and Cool Financial Services Limited had a financial dispute that involved law enforcement agencies. On January 19, 2024, Goewe paid Cool Financial Services Limited N150 million via bank drafts through its legal counsel,” FCMB wrote.

“FCMB conducted all transactions with Goewe and Sons Ltd. in good faith, adhering strictly to banking regulations and internal policies. The bank acted neither negligently nor breached any duty towards Cool Financial Services.

“FCMB believes the lawsuit filed by Cool Financial Services is without merit, as the bank had no contractual or fiduciary obligations to them. Goewe and Sons Ltd. has already repaid Cool Financial Services.”

The bank said that it had filed its defence to the lender’s statement of claim in court, adding that the case came up for mention on Wednesday and the court subsequently adjourned it until March 18.

Source: FIJ

Cool Financial Services, a Lagos State-based finance house, has sued First City Monument Bank (FCMB) for allowing Goewe and Sons Ltd., one of its borrowers, to withdraw a N150 million loan sum from an account with an active freezing instruction.

Goewe and Sons Ltd. is a merchandise company owned by Ewere Godwin Orobosa. In July 2023, the company first approached the finance house for a N100 million loan at a 3.5% interest rate for a duration of 30 days.

Again, in September 2023, the company obtained an additional loan of N50 million at an interest rate of 1.5% for a month, bringing the entire loan to N150 million.

The borrower intended to pursue a contract and needed to have the said amount in its bank account, but the loan was not to be used to execute the potential contract.

Both Goewe and Sons Ltd. and Cool Financial Services then instructed FCMB to freeze the loan account so that the loan sum could remain untouched for the period of the transaction, according to a loan agreement dated September 18, 2023.

The borrower had earlier written to the bank to alter its account mandate through a board resolution dated September 15, 2023. The borrower appointed Ewere-Egharevba Orobosa, representing the borrower, and Roseline Anibueze, representing the lender, as ‘Category A’ signatories to the account.

The directive further specifically stated that the representative of the lender shall have the power to authorise any withdrawal below N150 million from the account while any withdrawal exceeding that amount shall be jointly authorised by the two signatories.

“Those measures were put in place to guarantee compliance with the terms and conditions of the loan facility,” Oluwafemi Adediran, head of the legal unit at the finance house, told FIJ on Wednesday.

After the loan duration expired, the lender wanted to withdraw it. So, on October 23, 2023, the finance house presented a transfer cheque at the Chevron branch of FCMB in Lagos confident that the money was intact. But the cheque was dishonoured and the bank revealed that the borrower had already withdrawn the loan.

“Upon our investigations and findings, we became aware albeit shocked that you disregarded the lien on the account and processed a loan of N150,000,000 (one hundred and fifty million naira) on the back of the restricted facility meant only as proof of funds. What is more, we are alarmed not only by this act but by the temerity and obviously premeditated criminal falsification of the signatures of the representatives of our client as signatory ‘A’ before the consummation of the unauthorised mindless transaction,” Justice John, a legal practitioner, wrote to a business manager at Sanusi Fafunwa Branch of FCMB and the FCMB managing director on behalf of the lender on September 26, 2023 and October 26 respectively.

On October 25, 2023, the lender visited the Sanusi Fafunwa Branch. There, Chukwuma Chukwuka and Isiaq Babatunde, both officials of the bank, appealed for a cure period of 72 hours to remedy the situation. An additional 48 hours was given to the bank to sort out the issue internally, according to a November 2023 court filing signed by Anibueze.

Those cure periods were not adhered to. On October 31, FCMB through Tosin Talabi and Akin Akintola, both legal counsel and head of litigation for the bank, said it had commenced an investigation into the issue.

“In accordance with our internal procedure, we have commenced investigations into the issues raised in your letter under reference and shall revert to you shortly with the bank’s position once the investigation (sic) is concluded,” the legal counsel wrote.

“At the time we went to the bank to verify how the money was withdrawn, we found out that the freezing instruction was still active on the account. We observed that our director’s signature was forged to make the withdrawal. The question the bank has not answered is, ‘How was it possible to withdraw money from an account with an active no-withdraw order?’”

More than a year after the letter referenced above, the bank was yet to reveal the findings of its investigation.

SEEKING REDRESS THROUGH COURT
In November 2023, the lender filed a suit marked FHC/2377/2023 before a Federal High Court in Lagos seeking to recover losses it had incurred as a result of what it considered “a criminal conspiracy”.

Sued in the lawsuit were FCMB as the first defendant, the borrower as the second defendant and the Central Bank of Nigeria (CBN), FCMB’s regulator, as the third defendant.

“A declaration that the action of the 1st defendant amounts to breach of fiduciary duties owed to the plaintiff,” the first leg of the relief read.

“An order directing the 1st defendant to immediately pay the plaintiff its capital in the sum of N150,000,000 (One Hundred and Fifty Million Naira Only) with (an) interest rate of 21% per annum or at the prevailing Central Bank of Nigeria’s rate from October 23, 2023, when the plaintiff’s transfer request was dishonoured by the 1st defendant despite the plaintiff’s account being funded; and without any satisfactory explanation by the 1st defendant to the plaintiff.

“General damages in the sum of N250,000,000 (Two Hundred and Fifty Million Naira Only) against the 1st defendant for the economic loss, embarrassment and financial exposures suffered by the plaintiff as a result of the devastating action of the 1st defendant, bearing in mind that the plaintiff is in the business of loans and SMS financing.

“An order of this honourable court directing the 1st defendant to pay interest on the judgment sums at the rate of 21% per annum or at the prevailing Central Bank of Nigeria’s rate, from the commencement of this suit till the date of judgment, and 14% per annum from the delivery of judgment till liquidation of the entire judgment sum to the plaintiff.

“An order of this honourable court directing the 3rd defendant to enforce compliance of the 1st defendant by drawing from the deposits of the 1st defendant in its care to settle all monetary sums and liabilities thereof by the 1st defendant herein in the event that the 1st defendant is unable to pay same.

“The cost of this action in the sum of N5,000,000 (Five Million Naira).”

The court has not fixed a hearing date for the case. At press time, FIJ learnt that FCMB had not filed any response to the lender’s filings.

FCMB had not responded to a request for comments at press time. On January 15, Rafiu Muhammed, a corporate affairs and media management officer at the bank, acknowledged FIJ’s email on the phone and promised that the bank would investigate and respond soon.

When asked to be specific when the bank would respond, Muhammed said, “I don’t want to give you an unrealistic time. But we will investigate and respond very soon.”

FIJ sent him a reminder on January 24 and Muhammed responded, “Give us till next week.”

FIJ called him again on Wednesday and Muhammed requested one more week. “We will try to expedite our investigation. Give us till next week,” he repeated.

THE BORROWER’S RESPONSE
In the court documents, the lender accused the borrower of falsifying Anibueze’s signature and conspiring with the bank to withdraw the money.

On January 15, FIJ contacted Godwin Ewere, the director of the borrower, for his comments. He denied falsifying any signature, stating that he had defrayed the loan and was no longer indebted to the lender.

“The loan obtained from Cool Financial Services has been fully paid and liquidated. We no longer owe Cool Financial Services. No signature was forged whatsoever,” Ewere said, adding that he also wanted to sue FCMB.

“I don’t want to say anything, because I want to sue FCMB.

“I am ready to meet them in court. I still see my name on (the) credit bureau that I am owing them [the lender]. They are saying over N20 million, which I don’t understand.”

Ewere showed FIJ a harmonised document containing a series of cheques he issued in the name of the lender.

When FIJ relayed Ewere’s response to the lender’s head of legal unit, he said it was a lie. He maintained that the borrower defaulted in repaying the loan and also withdrew the money illegally.

Source: FIJ

Tension continues to rise in the Lagos State political arena as the impeached Speaker of the House of Assembly, Honourable Mudashiru Obasa, insists that his removal was invalid. Obasa, who returned to Lagos on Saturday after a foreign trip, has declared that the impeachment carried out by the Assembly using what he described as a “fake” mace cannot stand.

Speaking to supporters at his former official lodge in Ikeja, Lagos, Obasa dismissed the allegations against him, maintaining that he remains the Speaker of the House until what he called the “right process” is followed. However, his claims have sparked widespread skepticism and criticism, with many questioning the validity of his support base.

“All members of the House are aligned with the new Speaker, Rt. Hon. Mojisola Lasbat Meranda, so who exactly are Obasa’s supporters?” asked Lovers of Lagos, a pro-democracy advocacy group. “The former Speaker must tell us who is truly standing by him, as the Assembly has moved forward under its new leadership.”

Obasa’s Claims and Rebuttals

In his address, Obasa attempted to debunk the allegations of financial impropriety leveled against him. “Is it possible to construct an ordinary gate with N16 billion? It is not the wall of Jericho or the wall that demarcated the United States of America and Mexico,” he said, mocking claims of financial mismanagement.

He further refuted accusations of overspending on vehicles and events. “How can they say we bought one Hilux bus for N1 billion each and 40 pieces for N40 billion? Talking about Thanksgiving, they should compare the one they said we spent N200 million on and the one organized by the state government.”

Despite his attempts to clear his name, observers note that Obasa failed to provide any proof of his claims or explain his controversial leadership style. Critics also highlighted that the allegations were endorsed by 32 lawmakers who signed his impeachment notice—a majority that reflects broad discontent with his tenure.

Questions About His Support

Obasa’s insistence that he remains the rightful Speaker has drawn sharp criticism. Members of the Assembly and political groups have dismissed his claims as baseless, pointing out that the new leadership enjoys overwhelming support.

“All members of the Lagos State House of Assembly stand firmly with Rt. Hon. Mojisola Lasbat Meranda. Obasa should tell us who his supporters are because the Assembly has spoken, and the era of impunity is over,” a prominent lawmaker said anonymously.

Police Involvement and Allegations

Obasa also alleged that the Lagos State Commissioner of Police led a team of officers to invade the Assembly on the day of his impeachment. According to him, over 200 policemen also surrounded his private residence in Agege, blocking the entrance and preventing his family from leaving.

However, political analysts have criticized Obasa for what they describe as an attempt to play the victim while avoiding accountability for the allegations against him. “He’s trying to distract Lagosians from the real issues. The allegations against him are serious, and he has yet to adequately address them,” said a Lagos-based political analyst.

A Divided Legacy

Obasa, who has served as a lawmaker since 2003 and is the longest-serving member of the House, claimed that his removal was politically motivated and orchestrated during his absence. He further alleged interference in the Assembly’s affairs, stating that due process was not followed in his impeachment.

However, his critics argue that his leadership style and alleged authoritarianism had alienated many of his colleagues, culminating in his removal. The Assembly, under the leadership of Speaker Meranda, has vowed to uphold transparency and accountability, signaling a new era in Lagos politics.

As Lagosians await the resolution of the crisis, one question remains unanswered: who are Obasa’s supporters, and can they rally enough influence to back his claims? Until then, the former Speaker’s declarations appear to be a lone cry in the face of overwhelming opposition.