All over the world, banks are orchestrated to support businesses, either local or international. But, in Nigeria, financial institutions are proving to be dare enemies of companies established by hardworking and committed personalities. Such is the present situation of Necit Nigeria Limited, a player in the downstream sector of the Oil and Gas with specialty in blending of lubricants products and Sales of Lubricating Oil that operates in the country with the idea of creating strategic job opportunities for the people, obtaining up to over ten lubricant licenses spread across the country with over 3,000 people working in the company and headed by legendary business tycoon, Dr. Emmanuel Iheagwazi, a visioner with a very strong focus of giving Nigerians, both old and young the opportunity to earn a sustainable livelihood.
However, with all the patriotic efforts of Dr. Emmanuel Iheagwazi, Stanbic IBTC chaired by Dr. Yinka Sanni and managed by Mr. Wole Adeniyi who claimed to be an experienced banker with over 30 years of financial operations, process management and business support to all industries in any sectors is not in any ways, supporting the positive cause of NECIT Nigeria Limited, a company that always transact with transparency and optimum financial openness.
It is quite obvious and crystal clear that Stanbic IBTC has proven that it is a financial institution that has no base of support for any businessman or organization, no matter how important their ventures are. It is also very painful that Stanbic IBTC is erroneously planning to throw thousands of Nigerians into the labour market in shutting down the factories of NECIT Nigeria Limited in Sokoto, northern part of Nigeria through the back -door Ex-parte order.
The company’s factory in Sokoto State was stormed by the receiver manager, appointed by Stanbic Bank Plc to lock up and take over the company’s assets. The day will always remain indelible as production was ongoing in the factory, security operatives and thugs were used to harass workers and forcefully send them parking, leaving billions of naira worth of chemicals used for production to be destroyed. It was indeed an eyesore and an act of irresponsibility from a seemingly reputable financial institution set up to assist businesses and individuals. For a bank that claimed to have 30 years of experience banking and with reputable bankers, it is absurd that such a bank will stoop so low to aggravate the pains of over 3,000 Nigerians working in NECIT Nigeria Limited facility in Sokoto State.
The bank willingly throw people out irresponsibly and forced them to be jobless, hungry and lacking, all which may result to crimes and criminals activities by those who are made jobless. Reputable institutions like the legal, police and others should be involved in this case to ensure optimum justice and democratic values. NECIT Nigeria Limited is a company that is promoting the Nigerian brand, enhancing humanity and building a very strong structure for the country’s economic base, but a bank from nowhere is illegally threatening the existence of the company. In a twist of fate, Stanbic IBTC is not helping any Nigerian business, rather, the bank is involved in supporting those that are not economically beneficial to the country.
According to Seyi Okunuga the Financial Controller of NECIT Nigeria Limited, the relationship between NECIT and Stanbic IBTC was mutually beneficial to both parties at the beginning and the bank was impressed with Necit performance which made the bank to arrange a collateral management with NECIT in such a way that when raw materials were to be imported, Necit was made to provide 30% equity contribution of the invoice value at 110% of the prevailing IEFX Rate. Upon presentation (post-neg), Necit is expected to provide the remaining 70% Cash at the same rate of 110% of IEFX rate and in the event that the cash was not available, a collateral management arrangement was to be arranged where by the bank appointed collateral manager to take custody of the whole import and releases product to Necit as payment is made by its customers into a designated account opened by the bank. The bank manages the operation and instructs the it’s appointed collateral manager on release of product as they receive payments into the account opened by them solely for the transaction. This release process continues until the bank recoup all the monies to the full invoice value plus additional 10% and thereafter releases the balance of the stock to Necit. We have correspondences and offer letter that speaks to this handy and ready to present same to any concerned authority and media.
However instead of the bank to utilize the cash collateral in its custody to bid for FX through the available intervention market, the bank in its usual unethical practice left the fund in a current account and earning float income, interest income and other incomes on the fund at the detriments of the customer. Several letters were written to complain to the bank of its deliberate obnoxious attitude of warehousing our fund without using it to bid for FX but the bank never changed their disposition and unethical treatment of Necit. Necit experienced similar unpleasant treatment from the Bank in 2020 when after rounding up and closing the transactions done between 2017 and 2019 and having provided adequate cash cover for the transactions, the bank came up with an outstanding accumulated interest on the concluded trade transactions running into NGN546 Million and they pushed this to Necit to pay-up. There was an outright rejection of the purported figure presented by Stanbic to Necit as outstanding interest as the understanding both parties had was that the additional 10% provided on the invoice value was to cater for FX fluctuations and Interest components before the loan is liquidated. How on earth will the bank now came up with an outrageous figure as outstanding interest. This led to series of meetings and consultations with the management of the Bank ably championed by Mr Wole Adeniyi, the current CEO of the bank. After a thorough deliberation by the company’s management, the bank pleaded with the management of Necit to agree to the restructure of the outstanding interest for 2 years while the bank on its part would;
(a) Write off over NGN90 Million out of the outstanding interest while the balance which stood at NGN462 Million would be term out for 2 years.
(b) Avail a trade line of $7 Million to Necit to enable the latter boost it cashflow to be able to pay down on the termed-out Loan. Mr. Wole Adeniyi assured the management of Necit of timely clean-out of the trade line to prevent the re-occurrence of accumulated interest due to delay in clean-up of the loan initially. He emphatically promised to prioritize
On the strength of the commitment of Mr. Wole Adeniyi who was the managing director of the bank at that time, the management of Necit agreed to the proposition of the bank and in September 2020, an approval was given for the restructure of the facility.
Necit utilized the trade line to import raw material for production in January 2021 and commenced the repayment of the term loan. The product imported was under the custody of the collateral manager appointed by the bank and release of product was subject to payment of cash/transfer into a dedicated account opened by Stanbic strictly under the control of Stanbic. After realizing the full value of the invoice and the additional 10% in the dedicated non-chequeing account, the bank released the balance of the product to Necit and instruct it collateral manager to vacate the storage facility as Necit have fulfil the condition of the 110% cash cover. The bank in its usual practice held on to the cash cover provided and refused to present bid to FX to CBN as committed which made the exposure to be prolonged at the detriment of the customer. Several complaint letters were written to the bank to remind it of its promise to prioritize and not be caught in the web of what transpired in the past. When Necit management noticed non-performance from the bank in regard to cleaning up the line, they visited the now MD of the Bank in person of Mr. Wole Adeniyi who apologized for the slow pace of liquidation ascribing it to the problem Stanbic has with CBN at that time but still assured the management of Necit of resolving the FX issue.
This trend continues from 2021 till 2023 and when the new government introduced the unification of FX regimes and devaluation of Naira., the bank wrote to Necit request the company to provide additional cash of over $3 Million (NGN5 Billion) due to devaluation of naira in 2023 for transaction consummated in January 2021 and adequately cash covered. The company wrote the bank maintaining its stand that the company is not indebted to the bank as the purported outstanding remained as a result of the bank ineptitude and unprofessionalism in the utilizing the fund in their custody to promptly source for FX to clear the exposure. Moreover, there was no way we could raise additional cash cover considering the challenges businesses that depend on imported raw materials for production are facing at that material time in Nigeria.
However in shocking and orthodoxically inappropriate move, the bank took the title kept with them in trust by Necit Nigeria Limited and appointed a receiver to take possession of the property. This is totally unacceptable to us as the property was given to the bank as collateral for the Overdraft, BG, Advance and Term Loan we obtained from the bank in time past and all these facilities have been paid down on and liquidated. How will a bank with international emblem descend so low to get back at a customer!!. The trade line was strictly cash covered under collateral management arrangement.
The founder and Chief executive of NECIT, Dr. Emmanuel Iheagwazi added his own comment by saying that he was told that the police personnel stormed his factory in Sokoto State with court injunction and they gave to the workers since he was not there at that particular time. Within two to three hours, the purported receiver came up with another court paper to take possession of the factory . He was surprised that bank can do this kind of dirty game and the fact that the company is not owing the bank. I was surprised of this kind of tactics. So when the staff refuse to sign the paper, they forcefully pursued the staff away and locked the company up. Funny enough, on that day, our raw materials came from Lagos and there was no way we can pack the raw materials that we use to work. So, we have to offload the raw materials by the compound of the factory.
The real issue is that I was one of the best customers of Stanbic IBTC. In 2016 and to my surprise, the bank came back and told us that we were owing them N450 million and I said no, because we are trading under the agreement between us. They even came up with the dubious fact that we are owing them up to N1.1 billion. I insisted that we are not owing them. I called the MD and the ED to inform them about our transaction which was utterly misquoted and mis-interpreted. They now told us that they can write off the N462,000,000 but that they can no longer do business with us but they can turn it into term loan and give us $7 million so that we can use it to be trading so that we can be able to pay that outstanding in quote. So, we quickly agreed since they said they are going to give us money to trade. We say, okay, give us the seven million dollars and turn the other N462,000,000 in quote to term loan. They also told us that they will give us the opportunity of paying that money without having issues.
We accepted and they gave us the seven million dollars and we imported another cargo and we did the same way we did other. So, after three months which doesn’t take us up to normal six months, we finished selling the goods. Our customers pay through the bank to buy our goods and the bank released the goods to the customers. So, we later discover that they did not liquidate the $7 million dollars we are doing business with which signified that we are still owing them, even after they know we have paid off. I have to arrange for an appointment with the MD and told him this. The MD of the bank replied me that he is not disturbing me and that they are having an issue with the CBN.
So, all of a sudden, the government was changed and the new government crashed the naira against the dollar. Now, the same bank wrote us that we should bring extra after they have devalued the naira to 500%. In another country, if devaluation happen only one percent, there will be revolution. Now, the bank wrote me that I should bring extra money and I asked if they are with their senses. The goods we sold through you in 2021, you have not refunded the money, after three years, you are informing us that we should bring extra money, from where would we get the money from. Thank God I went with the Financial Controller, so the bank’s MD cannot deny it.
However, as investigative journalists, we need to balance the story and hear from the side of Stanbic IBTC and this is the comment from the Chief Executive Officer, Mr. Wale Adeniyi who responded that “Thank you for reaching us, I can confirm that NECIT Nigeria Limited is currently Indebted to Stanbic IBTC due to trade exposure related to a business deal concluded in 2021. Despite our efforts to resolve the matter, the customer’s indebtedness remains outstanding. We were therefore left with no option than to appoint a receiver manager who has taken over the company’s pledged assets in Sokoto, Nigeria.
