Court Halts Investigation into Sterling Bank’s $17,079,000 Loan Recovery

•Stops reps committee from summoning bank’s CEO

Wale Igbintade

Justice Daniel Osiagor of the Federal High Court in Lagos, yesterday, issued an order restraining the House of Representatives and Chairman of the House Committee on Public Petitions, Hon. Michael Etaba, from further investigating or inviting Sterling Bank Limited and its Group CEO, Yemi Odubiyi.

This order will remain in place pending the resolution of a motion for an interlocutory injunction related to the recovery of a US$17,079,000 loan granted by the bank.

The applicants in this suit, marked FHC/L/L/CS/185/2025, included Sterling Bank Limited, Sterling Financial Holdings Company Plc, Yemi Odubiyi, Abubakar Suleiman, Lekan Olakunle, and Dele Faseemo.

Listed as defendants were the House of Representatives, Hon. Michael Etaba, Dr. Innocent Brendan Usoro, Miden Systems Limited, and the Inspector General of Police.

After reviewing the motion and supporting affidavit, Justice Osiagor granted an ex parte order preventing the 1st and 2nd defendants from continuing their investigation, or inviting the plaintiffs.

In a 31-paragraph affidavit supporting the motion, the Head of Recovery Litigation for the 1st and 2nd plaintiffs, Sunday Adegoke, explained that a banker-customer relationship between the 1st Plaintiff (Sterling Bank) and the 3rd and 4th defendants (Dr. Innocent Brendan Usoro, Miden Systems Limited) began in 2009.

This relationship resulted in a Vessel Lease Facility for US$17,079,000, with a 48-month term, including a 6-month moratorium on repayments.

Adegoke further stated that the 3rd and 4th defendants’ failure to repay the debt led to the facility being restructured for an additional five years, from 2017 to 2022.

He noted that the funds were allegedly diverted for the personal use of the 3rd and 4th defendants, with many assets, including vessels securing the loan, intentionally damaged.

Despite efforts to recover the debt, the 3rd and 4th defendants launched “vexatious” proceedings in a separate lawsuit and filed complaints with the National Assembly, accusing the plaintiffs of unlawful activities.

Adegoke stated that the funds provided to the 3rd and 4th defendants were misused and diverted for personal expenses.

Additionally, during an inspection at the NBTC Yard in Warri and the Forcados Terminal in Delta State on October 23-24, 2023, the plaintiffs discovered that most of the vessels secured for the loan were in disrepair due to the fraudulent actions of the 3rd defendant.

He also alleged that the additional funds given to the 3rd defendant to help revitalise the 4th defendant’s operations were fraudulently diverted.

The plaintiffs then initiated a recovery action against the 3rd and 4th defendants at the Federal High Court in Lagos under Suit No: FHC/L/CS/946/2021, where Mareva injunctions were granted.

The case led to a Consent Judgment, with the 3rd and 4th defendants voluntarily admitting liability for US$31,335,636.88.  Despite agreeing to the terms in the Consent Judgment, the 3rd and 4th defendants sought to vary the settlement in a new suit, FHC/L/CS/54/2024, while continuing their alleged “vexatious” actions.

They also filed multiple petitions to the National Assembly, including to the House of Representatives Committee on Public Petitions, making allegations of unlawful deductions, money laundering, and other offenses against the plaintiffs.

As a result, the House of Representatives summoned the plaintiffs to appear before the Committee on Public Petitions on February 5, 2025.

The plaintiffs argued that this investigation was sub judice, as it contradicts existing court proceedings, and contended that the House lacked legal authority to investigate matters already under judicial review.

The plaintiffs further stated that the ongoing investigation, and its related activities by the Force Criminal Investigation Department (5th Defendant), led to harassment of the plaintiffs and their officials, thereby disrupting the operations of Sterling Bank.

Justice Osiagor adjourned the matter till February 21, 2025, for hearing of Motion on Notice.

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