N61.45bn Debt: UBA Seeks Jail for Nine Over WEMPCO Factory

• Bank alleges respondents used thugs to prevent receiver from taking control of Ogun factory

Wale Igbintade

United Bank for Africa (UBA) Plc has asked the Federal High Court in Lagos to commit nine individuals linked to Western Metal Products Company (WEMPCO) to prison for allegedly disobeying a court order appointing a receiver-manager over assets of the industrial conglomerate.

The application is the latest development in the bank’s efforts to recover N61.45 billion allegedly owed by WEMPCO and its associated companies, amid claims that the respondents prevented the court-appointed receiver from taking control of the group’s factory in Magboro/Ibafo, Ogun State.

In a committal notice published on Tuesday, October 27, pursuant to a court order permitting service by newspaper, UBA accused the respondents of “wilful, deliberate and orchestrated disobedience” of an April 2 order.

The bank is asking the court to commit them to prison until they comply with the order.

Those named in the application are Lewis Shui Noor Tung, Phillip Shui Che Tung, Alhaji M.A. Ola Yusuf, Tung Lawrence Blake, Alli Aare Hadji Tokunbo, Paul Shui Po Tung, Robert Tung, CL Ip and Taiwo Alli. Their addresses are listed as 18 Wempco Road, Ogba, Ikeja, Lagos.

Alli is the managing director of Nigerian Enamelware Company Plc, which is listed on the Nigerian Exchange and is among the 17 defendant companies in the proceedings. Robert Tung also sits on the company’s board.

The allegations have yet to be tested in court, while WEMPCO’s response was not immediately available.

The dispute stems from an April 2 order by Justice Akintayo Aluko of the Federal High Court, Lagos, freezing up to N61,445,695,993.76 in funds linked to WEMPCO and associated defendants across 27 banks and fintech platforms.

The judge also appointed Romeo Ese Michael as receiver-manager over assets not already pledged under a 2019 credit agreement.

Under the order, banks and fintech operators, including Moniepoint, OPay and Kuda, were directed to disclose and preserve balances belonging to the defendants.

The receiver-manager’s powers also extend to two Wärtsilä power generators belonging to the defendants, wherever they may be found.

In an affidavit supporting its committal application, UBA alleged that the respondents frustrated the receiver’s efforts to take control of the Magboro/Ibafo factory after court bailiffs had handed it over to him.

According to the bank, the respondents brought in thugs, broke the receiver’s locks and threatened his staff with “serious injury”.

UBA further alleged that the respondents continued to operate the business and divert its funds despite the court order.

The bank maintained that the factory had remained under the respondents’ control since the alleged incident, preventing the receiver from effectively exercising his court-sanctioned powers.

The court papers also detail unsuccessful attempts by the parties to negotiate a settlement of the underlying debt dispute.

On June 22, WEMPCO’s lawyers at SimmonsCooper Partners, led by Senior Advocate of Nigeria Dapo Akinosun, wrote to UBA seeking an urgent meeting to discuss a possible resolution.

They proposed an interim standstill arrangement, a joint reconciliation of the accounts and a structured repayment framework.

UBA’s lawyer, Senior Advocate of Nigeria Temilolu Adamolekun, responded the following day, questioning the proposal in view of what the bank described as the respondents’ resort to physical force and self-help.

Adamolekun questioned how a company allegedly “deploying physical violence on ground and resorting to self-help” could simultaneously seek negotiations, but agreed to meet its representatives.

The parties met at UBA’s Marina head office in Lagos on June 26 and agreed to conduct a joint inspection of the Magboro facility on July 2.

UBA alleged, however, that WEMPCO and its lawyers failed to attend the inspection and had since “gone incommunicado”.

The bank said the failed inspection and the respondents’ alleged continued control of the factory had further complicated efforts to enforce the court order and recover the outstanding debt.

Other defendants in the underlying proceedings include Lagos Oriental Hotel Limited, United Rolling Mills Limited, Wempco Steel Mill Company and Prime Nigeria Tiles Company, among other WEMPCO-linked entities.

WEMPCO was founded by K.F. Tung, who first arrived in Nigeria in 1967.

The committal application seeks to compel compliance with the April 2 order as UBA pursues recovery of the N61.45 billion debt.

The court has yet to determine the allegations or grant the request to commit the nine respondents to prison.