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Federal Court Adjourns Bankruptcy Case Against Kola Aluko, Business Front For Ex-Petroleum Minister

February 28, 2016

Justice Mohammed Idris of the Federal High Court in Lagos, Lagos State has adjourned a bankruptcy suit against Kola Aluko, a businessman with links to former Petroleum Minister, Diezani Alison-Madueke. The court fixed April 15, 2016, for the continuation of the case.    

Guaranty Trust Bank, represented by Sunday Adara from the law firm of Ajibola Aribisala, filed a petition against Mr. Aluko. The bank’s bankruptcy petition has its roots in a 2012 lawsuit the commercial bank instituted against Mr. Aluko of 27 Oyinkan Abayomi Drive, Ikoyi-Lagos. The lawsuit sought to recover a debt of N9.5 billion from Mr. Aluko, whose firm, Fossil Resources International Company, was a major player in Nigeria’s downstream oil sector. The bank claimed that the debt was outstanding from a loan it had granted to Hi-media Limited and guaranteed by Mr. Aluko. The bank also claimed unspecific general damages from the defendant for his failure to honor his obligation as a guarantor of the loan. In addition, the bank wanted the defendant to bear the cost of the legal action.

However, the parties later agreed to settle the suit out of court, with the creditor bank agreeing to accept N3.2 billion as the full and final settlement. The terms of the settlement was entered as a judgment of the court. The terms of the consent judgment called for the debtor to pay the first installment of N500 million to the bank, leaving a balance of N2.7 billion that would be liquidated in six quarters over a period of eighteen months.

The bank’s current lawsuit disclosed that the debtor made the first payment of N500 million as well as payments for five quarters, but failed to pay for the sixth quarter. The bank stated that the debtor, without any explanation and in flagrant disobedience of the court’s final judgment, suspended repayment of the outstanding balance of more than N458 million despite several demands by the bank. The debtor’s failure to pay triggered the latest lawsuit, according to the bank.

The bank’s petition seeks an order from the court declaring Mr. Aluko bankrupt. In addition, the lawsuit wants a court order directing that Mr. Aluko’s assets, interests and holdings, whether held personally or through third parties, be liquidated, and the proceeds applied towards discharging his debt of N458,340,000.

The bank also wants the court to divest Mr. Aluko of all shares or stocks of shares, interests, and holdings belonging to him in whatever form in all public and private companies. In addition, the lawsuit wants the court to remove Mr. Aluko as a director in all public and private companies and to restrain his appointment as a director in any public and private companies in Nigeria.

However, Adesegun Ajibola, a lawyer representing Mr. Aluko, asked the court to dismiss the petition.