Emzor Pharmaceutical Industries is essentially adrift in a financial crisis after Nova Merchant Bank Limited filed a winding-up petition against the company in front of a Federal High Court in Lagos.
N6,205, 575,569.93 (six billion, two hundred and five million, five hundred and seventy five thousand, five hundred and sixty nine naira, ninety three kobo) is the amount that the bank is attempting to recoup from the company.
Justice Chukwujekwu Aneke has been assigned the suit with the markings FHC/L/CP/1044/2024.
Central Securities Clearing System Plc, Access Bank Plc, Ecobank Nigeria Limited, Citi Bank Plc, Fidelity Bank Plc, First City Monument Bank Plc, and First Bank of Nigeria Limited are named as respondents in the lawsuit.
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Others are, Guaranty Trust Bank Plc, Jaiz Bank Plc, Keystone Bank Ltd, Polaris Bank Plc, Providus Bank Plc Stanbic Ibtc Bank Plc, Sterling Bank Plc, Standard Chartered Bank Plc, Union Bank of Nigeria Plc, United Bank For Africa Plc, TAJ Bank Limited, WEMA Bank Plc, and Zenith Bank Plc.
In a Motion on Notice submitted by counsel to the bank, Mr. Oluwakemi Balogun SAN, he claimed that the petitioner has issued on the respondent, the statutory three weeks demand notice required by Section 572 of the Companies and Allied Matters Act (CAMA) 2020.
He claimed that despite the fact that the petitioner had been reasonably satisfied with the respondent’s payment, security, or compounding, the three-week demand notice had already passed.
Rule 183 of the Companies Winding-Up Rules, 2001, Section 6(6) of the Federal Republic of Nigeria, 1999 as amended, JB Order 30 of the Federal High Court (Civil Procedure) Rules, 2019, and Section 574(1) of the Companies and Allied Matters Act (CAMA) all state that the respondent is unable to pay off its debt.
According to him, almost all of the respondent’s assets are of a personal nature and may be lost, taken, destroyed, or otherwise evaporated by the respondent’s alter egos if a restraining order was not given to stop the res from being lost.
Azeezat Adeniji, a Principal Officer employed by Nova Merchant Bank, provided an affidavit in support of a motion on notice. The deponent stated that, in response to an application from Emzor Pharmaceuticals Industries Limited, the Petitioner granted a two-type credit facility to Emzor Pharmaceuticals Industries Limited through an offer letter dated 55h April, 2022, with reference number NVB/22/CBG/APRIL/05/004.
The $4,583,333.00 (four million, five hundred and thirty-three thousand, three hundred and thirty-three United States dollars only) facility is for financing the importation of different raw materials, while the N500,000,000.00 (five hundred million naira only) facility is for enhancing the company’s working capital needs.
She declared that the following assets are the securities for the facilities: (a) All asset debentures over the respondent’s fixed and floating assets, to be split pari pasu with other lenders. (Types 1 and 2), and (b) Stella Okoli’s personal guarantee (Type 2 only).
The deponent further stated that, pursuant to a Board Resolution adopted on April 6, 2022, the respondent at its Board of Directors Meeting authorized, approved, and named Dr. Mrs. Stella Okoli, the Managing Director, and Mrs. Uzoma Ezeoke, the Executive Director, to execute the offer letter of the petitioner dated April 5, 2022, for the two-type credit facility in the amounts of N500,000,000.00 and $4,583,333.00, respectively.
On December 1, 2022, the parties duly executed the Mortgage Debenture Trust Deed, which is being handled by UTL Trust Management Services Limited and Coronation Trustees Limited. An annexed copy of the Mortgage Debenture Trust Deed dated December 11, 2022 is identified as Exhibit NMB 3.
In light of the aforementioned and in order to safeguard the facility, on April 13, 2022, the Respondent’s Managing Director, Dr. Mrs. Stella Okoli, duly executed and notarized her personal guarantee.
The Respondent promised the Petitioner in paragraph 8 that “all sums outstanding in Emzor Pharmaceutical Industries Limited accounts pursuant to the above shall become immediately payable upon the Bank’s first demand and interest shall accrue thereon at the Bank’s ruling rate for unauthorized facilities until the outstanding sums are fully liquidated.” This covenant was made possible by the clause labeled “other conditions” in the offer letter dated April 5, 2022.
Additionally, under the offer letter dated April 5, 2022, the Respondent covenanted to compensate the Petitioner for any out-of-pocket costs, including legal fees, that may be incurred in the course of enforcing the conditions of the offer letter, under the section headed “legal and other charges.” Furthermore, these expenses will be applied to the facility’s and all other monies owing under the terms of the offer letter and shall bear interest accordingly.
“I am aware that the Petitioner had to hire a solicitor to help with the initiation of this lawsuit because of the Respondent’s recalcitrant attitude towards balancing the debt,” the deponent continued.
She claimed that the Respondent received a demand letter from the Petitioner alerting them to their fully developed but unfulfilled duties. An attachment containing a copy of the demand letter dated February 15, 2024 is labeled Exhibit NMB 7.
However, the Petitioner had a Statutory Demand Letter dated March 20, 2024 served on the Respondent as a result of the Respondent’s persistent and unrelenting default or incapacity to uphold the covenants in the Offer Letter.
However, the respondent was unable, unwilling, and did not pay back the loan advanced to them by the Petitioner despite several commitments.
As a result, the Petitioner is requesting a court order designating the Deputy Chief Registrar of the Federal High Court, Lagos, as the Respondent’s Provisional Liquidator. This individual will assume responsibility for managing the Respondent’s Company’s operations until this Honorable Court grants the Winding-up Order.
The respondents, their directors, staff members, management, employees, officers, agents, privies, and any other person or group of persons under the Respondent’s authority or any other authority (howsoever derived or sourced) are restrained from operating, withdrawing from, or otherwise tampering with the Respondent’s funds in the cited Bank or financial institutions under any name or guise until this Honorable Court grants the Winding-up Order.
“An order of interlocutory injunction prohibiting the Respondent, their representatives, employees, and/or privies from altering, alienating, transferring, and/or otherwise dissipating or appropriate the Respondents’ movable and fixed assets, regardless of how they are named, until this Honorable Court grants the Winding-up Order.
“An order of court directing the cited Respondents listed as 1-20 on the face of this Motion Paper to hold and disclose by way of a sworn affidavit filed within five days upon being notified of the order of this honorable court (and a copy served on the Petitioner’s Solicitors) particulars of all assets, monies, real estate, stock, funds, bonds, cash deposits, bank guarantees, letters of credit, and all negotiable instruments in the name of the Respondents up to the amount of N6,205, 575,569.93 (Six Billion, Two Hundred and Five Million, Five Hundred and Seventy Nine Naira, Ninety Three Kobo) being the Respondent’s outstanding debt to the Petitioner as of 5 of June, 2024.
Justice Aneke has adjourned the suit till July 12 for hearing.
