Access BankVs Seplat/Orjiako: Understanding the Issues
The publication on THISDAY Business page on Monday did not provide a fair analysis of the legal tussle between Access Bank and Seplat Petroleum over the loan to Cardinal Drilling Services Limited. It was a job done for Access Bank.
THISDAY should, in the spirit of fairness, also allow this other side of this dispute. There have been persistent concerns that the ongoing legal battle is no longer about debt recovery. This concern is borne out of what many observers see as a campaign of calumny against Seplat and its Chairman, Dr. ABC Orjiako.
This manifests, among others in wild claims that the surgeon-turned business tycoon owes Access Bank Plc some millions of dollars, which, instructively, keeps changing with each writer.
Obviously, the entire campaign of lies is built on a quicksand of the strange lawsuit, which Access Bank instituted against Seplat, leading to the ex parte orders, interlocutory and Mareva injunctions secured by Access Bank at the Federal High Court Lagos in November 2020. The injunctions were however suspended by the Court of Appeal in January 2021.
Meanwhile, the fact, as has been widely reported in the media, remains that Cardinal Drilling obtained credit facilities from Diamond Bank (now Access Bank) to procure four drilling rigs (CDS Rigs 101, 201, 202, and 203) between 2012 and 2014.
The loan was secured with Deeds of Fixed Debenture tied to Cardinal Drilling’s assets, namely the four specific rigs. But rather than face Cardinal Drilling when the company could not liquidate the outstanding loan of about $85.8 Million, Access Bank sued Seplat (that was not a party to the loan) as First Defendant, Cardinal Drilling (its real debtor) as Second Defendant, Orjiako (that was not also a party to the loan) as Third Defendant, and Kalu Nwosu (former MD of Cardinal Drilling) as the Fourth Defendant in clear violation of well-established principles in law.
To push the perfidy through, Access Bank, through their lawyers, deposed to an Affidavit that: Cardinal Drilling is a sister-company of Seplat; Seplat employed Cardinal as a veritable vehicle, smokescreen, and shell company “in furtherance of the purchase of drilling rigs for their sole benefit, but has refused to liquidate the outstanding indebtedness”; Cardinal transferred the loans disbursed to it to Seplat; Cardinal is a sister-company of Seplat; the said loan was secured with Floating and Fixed Debentures; and Orjiako is the promoter and alter ego of Seplat.
They further averred that, “Unless the Defendants are restrained together with other Directors of the First and Second Defendants (Seplat and Cardinal, respectively), they would strip the assets of the Defendants and dispose them…”; and that unless the Defendants and Directors of both companies are also restrained, “they would place the assets of the Defendants (Seplat and Cardinal Drilling) beyond the reach of this Court and the Receiver/Manager (Kunle Ogunba)”
However, as court documents and reports emerging from the courts clearly show, Seplat and Orjiako were never parties to the loan and did not guarantee it. Cardinal Drilling never transferred any part of the loans to the oil company as claimed by Access Bank (without any supporting documents). Also, the rigs were used to execute drilling jobs for other firms, including the governmentowned Nigerian Petroleum Development Ltd, a subsidiary of Nigeria National Petroleum Company (NNPC). Furthermore, Cardinal Drilling obtained the loan with Fixed Debentures, not Fixed and Floating Debentures as falsely claimed by Access Bank and their lawyer. Therefore, in the event of debt recovery, a Fixed
Debenture legally confines Access Bank to the four Cardinal Drilling’s assets they were charged to.
Based on these, analysts aver that evidently, none of Access Bank’s claims makes Seplat or Orjiako liable for the loan in question because there absolutely no privity of contract between Access Bank and Dr. Orjiako or Seplat for which any court action or debt recovery enforcement could be pursued against them.
It is an established principle in law that only a party, which directly obtained a credit facility or a party, which guaranteed a loan in writing, is liable to the loaner for a debt.
Also, only a party that is liable for a bank debt in law or in equity can be sued. Thus, they are of the view that to apply for an injunction against the assets of a party that is not liable for a bank debt, as Access Bank had done, is an aberration unknown to Nigerian laws in the first place.
“What is even more bizarre is that while Cardinal Drilling has not denied indebtedness to Access Bank, Access Bank and its lawyer and media campaigners are insisting that it is Seplat and Orjiako, not Cardinal, that owe them”, a legal practitioner, who has been following the development quipped.
Many who have followed Seplat’s track record of dedication to highest ethical standards and its blossoming business also think it is absurd to imagine that Seplat’s assets, including five Oil Mining Licences (OML), which are not only immovable assets, but are also producing crude oil on a daily basis could easily be moved out of the reach of the court.
Or that a firm with impeccable local and international reputation in raising and servicing debt; a firm that just raised $260 million, being its obligation towards the $650 million financing for the ANOH Gas Processing Plant (a record 50:50 Joint Venture with the Nigeria Gas Company, a subsidiary of the NNPC); a company worth over $2.8 Billion in assets and about $500 Million in market capitalisation; a company listed on both the London Stock Exchange and Nigeria Stock Exchange since 2014; would strip its assets or play “hide and seek” over a $85.8 Million alleged debt if it truly owes.
These facts and Seplat’s standings as against Access Bank’s bogus claims were well reflected by the Court of Appeal in suspending the injunctions of the lower court.
In suspending the orders of the lower court, the three-man appeal panel specifically held that Access Bank had nothing to lose if Seplat continued to do its business while the litigation lasts. Their Lordships emphatically held that it would be “bad and tragic” to continue to seal the offices of a company that is of such strategic economic import to the nation. Seplat supplies gas to three power plants that are responsible for the 40 per cent of power supply in Nigeria and employs over 400 Nigerians.
“The fear and anxiety expressed by the 1st Respondent (Access Bank) appeared unfounded. It would also not amount to hearing the substantive suit. The Supreme Court has held that where machines and workers would be rendered useless, the court would intervene.
Disruption of business should be considered in the issue of balance of convenience. The court will exercise its discretion in suspending the injunction. Practical approach should be adopted and not do injustice to any of the parties. Where considerable hardship will be done to a party, the court will intervene by suspending the injunction or stay it.
“I found substance in the argument. The injunction restraining the appellant from operating is hereby suspended. Order on its accounts are also lifted pending the determination of the appeal”, Honourable Justice Joseph Ikyegh held in the ruling concurred by the two other Justices.
Meanwhile, not a few informed observers have expressed concern that the media trial of Seplat, particularly Orjiako, is an attempt to force the hand of the judiciary in a matter or obtaining in the court of public opinion what Access Bank is unable to obtain from the court of lawforcing the businessman/Seplat to pay a debt not owed.
For instance, many have wondered the media campaigners’ idea of indebtedness and owning a company is. Does one own a company simply by holding shares or equity in the company? Shouldn’t any serious-minded writer or blogger bent on unmasking the truth on this matter have at least named all the shareholders, ownership structure, including the Directors of Cardinal Drilling Ltd by conducting “Lifting the Corporate Veil.”
That way, the wind blows and the world would then clearly see the fowl’s rump.
Furthermore, as at today, Seplat is still a highly regulated oil firm owned by very many reputable shareholders from all around the world. Many therefore see the attempt to reduce it to a one-man business owned by Orjiako as pure mischief. They believe that while Orjiako deserves accolades for co-founding this flagship indigenous oil and gas firm, it does not make Seplat his personal property.
It is this fixation on Seplat and Orjiako, including suing these non-parties to the loan in question as First and Third Defendants; this insistence on sealing/takeover of a business of Seplat magnitude and import to the economy; and in particular what observers now see as sponsored campaign of calumny against the person of Orjiako that have led many to wonder if Access Bank is truly interested in debt recovery or it is after asset extortion through corporate bullying.
In the discharge of their duties, lawyers in Nigeria are bound by the Rules of Professional Conduct 2007. For instance, Rule 15 (2) provides that a lawyer shall “keep strictly within the law notwithstanding any contrary instruction by his client and, if the client insists on a breach of the law, the lawyer shall withdraw his service.”
A lawyer shall also not knowingly make a false statement of law or fact. Seplat’s petitions to the Legal Practitioners Disciplinary Committee (LPPC) and the Legal Practitioners Disciplinary Committee (LPDC) are clearly predicated on alleged breach of breach of Rules 1, 15, 24, 30 and 32 of the Rules of Professional Conduct 2007 vis-à-vis palpable falsehood, misrepresentation and suppression of facts by the Access Bank’s lawyer to mislead the court.
Lawyers and several analysts also believe it is within Seplat’s rights. They opine that the fact that Kunle Ogunba was once stripped of his SAN rank in 2018 before it was later restored makes it even all the more imperative for LPPC and LPDC to look into the matter with dispatch.
Observers and stakeholders in corporate Nigeria believe that the issues at stake hold enormous implications for Nigeria, hence Orjiako and Seplat should never succumb to any cooperate bullying. Importantly, they believe that since the bank has approached the courts, the courts should be allowed to do their adjudication, conclusively.
Ngozi Okonjo-Iweala is a Nigerian-American economist and international development expert. She sits on the boards of Standard Chartered Bank, Twitter, Global Alliance for Vaccines and Immunisation, and the African Risk Capacity. Known to break glass ceilings in her career path, she recently made history again as the first woman and African to be appointed as Director-General of the World Trade Organisation. To commemorate the 2021 International Women’s Day celebration, CHIEMELIE EZEOBI profiles this amazon that stands tall and inspires million of young girls to aspire for greatness
This year, the theme for the annual International Women’s Day (IWD) was #ChooseToChallenge and what better way to mark it than to profile Dr. Ngozi Okonjo-Iweala, an economist and international development expert, who recently put Nigeria on the global map by becoming the first female and first African to occupy the seat of the World Trade Organisation (WTO) as the seventh director general.
Born on June 13, 1954 at Ogwashi-Ukwu in Delta State to Prof Chukwuka and Kamene Okonjo, the economist and international development expert sits on different boards including Standard Chartered Bank, Twitter, Global Alliance for Vaccines and Immunisation, and the African Risk Capacity (ARC)
Education
Okonjo-Iweala was educated at Queen’s School, Enugu, St. Anne’s School, Molete, Ibadan, and the International School Ibadan. She further studied at Harvard University, graduating magna cum laude with an AB in Economics in 1976 and in 1981, she earned her PhD in regional economics and development from the Massachusetts Institute of Technology with a thesis titled Credit policy, rural financial markets, and Nigeria’s agricultural development. She went on to receive an international fellowship from the American Association of University Women (AAUW), that supported her doctoral studies.
Many Firsts
Okonjo-Iweala is known as a woman of many firsts. Asides being the first woman and first African to head the WTO, she was also the first woman to serve as Nigeria’s finance minister and the first woman to serve in that office twice. She was also the only finance minister to have served under two different presidents.
Career Path
Okonjo-Iweala had a 25-year career at the World Bank in Washington DC as a development economist, rising to the No .2 position of Managing Director where she had oversight responsibility for the World Bank’s $81 billion operational portfolio in Africa, South Asia, Europe and Central Asia. Okonjo-Iweala spearheaded several World Bank initiatives to assist low-income countries during the 2008–2009 food crises, and later during the financial crisis.
In 2010, she was Chair of the IDA replenishment, the World Bank’s successful drive to raise $49.3 billion in grants and low interest credit for the poorest countries in the world. During her time at the World Bank, she was also a member of the Commission on Effective Development Cooperation with Africa, which was set up by the Prime Minister Anders Fogh Rasmussen of Denmark. In addition to her role in government, Okonj o-I we ala served on the Growth Commission (2006–2009), led by Nobel Prize winner Professor Michael Spence, and the United Nations’ Secretary-General’s High-Level Panel on the Post-2015 Development Agenda(2012–2013). She also co-chaired the Global Partnership for Effective Development Cooperation. In 2012, she was a candidate for President of the World Bank, running against Dartmouth College President Jim Yong Kim.
Career in Government
Okonjo-Iweala served twice as Nigeria’s Finance Minister and also as Minister of Foreign Affairs. She was the first female to hold both positions. During her first term as Minister of Finance under President Olusegun Obasanjo’s administration, she spearheaded negotiations with the Paris Club that led to the wiping out of US$30 billion of Nigeria’s debt, including the outright cancellation of US$18 billion.
In 2003, she led efforts to improve Nigeria’s macroeconomic management including the implementation of an oil-price based fiscal rule. Revenues accruing above a reference benchmark oil price were saved in a special account called “The Excess Crude Account,” which helped to reduce macroeconomic volatility.
With the support of the World Bank and the IMF to the federal government, she helped build an electronic financial management platform—the Government Integrated Financial Management and Information System (GIFMIS), including the Treasury Single Account (TSA) and the Integrated Payroll and Personnel Information System (IPPIS), helping to curtail corruption in the process. As at 31 December 2014, the IPPIS platform had eliminated 62,893 ghost workers from the system and saved the government about $1.25 billion in the process.
Okonjo-Iweala was also instrumental in helping Nigeria obtain its first ever sovereign credit rating (of BB minus) from Fitch Ratings and Standard & Poor’s in 2006. Following her first term as Minister of Finance, she served two months as Minister of Foreign Affairs in 2006. She returned to the World Bank as a Managing Director in December 2007.
In 2011, Okonjo-Iweala was re-appointed as Minister of Finance in Nigeria with the expanded portfolio of the Coordinating Minister for the Economy by President Goodluck Jonathan. Her legacy includes strengthening the country’s public financial systems and stimulating the housing sector with the establishment of the Mortgage Refinance Corporation (NMRC).
She also empowered women and youth with the Growing Girls and Women in Nigeria Programme (GWIN); a gender-responsive budgeting system, and the highly acclaimed Youth Enterprise with Innovation programme (YouWIN); to support entrepreneurs, that created thousands of jobs.
This programme has been evaluated by the World Bank as one of the most effective of its kind globally. Under her leadership, the National Bureau of Statistics carried out a re-basing exercise of the Gross Domestic Product (GDP), the first in 24 years, which saw Nigeria emerge as the largest economy in Africa.
Appointments
After leaving government, Okonjo-Iweala was also a member of the International Commission on Financing Global Education Opportunity (2015–2016), chaired by Gordon Brown, and the Eminent Persons Group on Global Financial Governance, which was established by the G20 Finance Ministers and Central Bank Governors (2017–2018).
Since 2014, she has been co-chairing the Global Commission for the Economy and Climate, with Nicholas Stern and Paul Polman. In January 2016, she was appointed the Chair-elect of the Board of Gavi.
Since 2019, Okonjo-Iweala has been part of UNESCO’s International Commission on the Futures of Education, chaired by Sahle-Work Zewde. Also since 2019, she has also been serving on the High-Level Council on Leadership & Management for Development of the Aspen Management Partnership for Health (AMP Health).
In 2020, the International Monetary Fund’s Managing Director Kristalina Georgieva appointed her to an external advisory group to provide input on policy challenges. Also in 2020, she was appointed by the African Union(AU) as special envoy to solicit international support to help the continent deal with the economic impact of the COVID-19 pandemic.
In early 2021, Okonjo-Iweala was appointed as co-chair, alongside Tharman Shanmugaratnam and Lawrence Summers, of the High Level Independent Panel (HLIP) on financing the global commons for pandemic preparedness and response, which had been established by the G20.
Founder
Okonjo-Iweala is the founder of Nigeria’s first indigenous opinion-research organization, NOI-Polls and she also founded the Centre for the Study of the Economies of Africa (C-SEA), a development research think tank based in Abuja, and is a Distinguished Visiting Fellow at the Center for Global Development and the Brookings Institution.
DG World Trade Centre
Not done in carving out history in her career trajectory, she aspired to head the World Trade
Organisation and she is now. In June 2020, President Muhammadu Buhari nominated her as Nigeria’s candidate to be director-general of the WTO.
Recognitions and Awards
Okonjo-Iweala has received numerous recognition and awards. In 2005, Euromoney named her global finance minister of the year and in the same year, she was listed as one of the 50 Greatest World Leaders (Fortune, 2015).
She was also listed as the Top 100 Most Influential People in the World (TIME, 2014); the Top 100 Global Thinkers (Foreign Policy, 2011 and 2012); the Top 100 Most Powerful Women in the World (Forbes, 2011, 2012, 2013 and 2014); the Top three Most Powerful Women in Africa (Forbes, 2012); the Top 10 Most Influential Women in Africa (Forbes, 2011); the Top 100 Women in the World (The Guardian, 2011); the Top 150 Women in the World (Newsweek, 2011); the Top 100 most inspiring people in the World Delivering for Girls and Women (Women Deliver, 2011); and she was listed among 73 “brilliant” business influencers in the world by Condé Nast International.
In 2019, Okonjo-Iweala was elected to the AmericanAcademy ofArts and Sciences and she was also conferred High National Honours from the Republic of Côte d’Ivoire and the Republic of Liberia. She is also the recipient of Nigeria’s Commander of the Federal Republic (CFR).
Other honours include 2020 African of the year, Forbes Africa; 2017 – Vanguard Award, Howard University; 2017 – Women’s Economic Empowerment Award, WEConnect International; 2017 – Madeleine K. Albright Global Development Award, Aspen Institute; 2016 – Power with Purpose Award, Devex Development Communications Network; 2016 – Global Fairness Award, Global Fairness Initiative; 2014 – David Rockefeller Bridging Leadership Award; 2011 – President of the Italian Republic Gold Medal, Pia Manzu Centre; 2011 – Global Leadership Award, Chicago Council on Global Affairs; and 2010 – Global Leadership Award, Columbia University School of International and Public Affairs;
Others include 2010 Bishop John T. Walker Distinguished Humanitarian Service Award; 2004 TIME’s European Heroes Award; 2004 – Finance Minister of the Year, Africa Investor Magazine; 2005 – Finance Minister of the Year for Africa and the Middle East; 2005 Global Finance Minister of the Year, Euromoney; and 2005 Finance Minister of the Year for Africa and the Middle East, Emerging Markets Magazine.
Honourary Degrees
Okonjo-Iweala has received honorary degrees from 14 universities worldwide, including some from the most prestigious colleges including University of Pennsylvania (2013); Yale University (2015); Amherst College (2009); Trinity College, Dublin (2007); Brown University (2006); Colby College (2007), and Northern Caribbean University, Jamaica.
She has also received degrees from a host of Nigerian universities including Abia State University, Delta State University, Abraka, Oduduwa University, Babcock University, and the Universities of Port Harcourt, Calabar, and Ife (Obafemi Awolowo university). In 2019, Okonjo Iweala was awarded an honorary degree from Tel Aviv University.