Ascon Oil Company Ltd has recovered its fuel retail station at Block 36, Admiralty Way, Lekki Phase 1, Lagos purportedly sold by Stanbic IBTC Bank. It was gathered that the prime property with a market value of N2.5 billion was undersold at N1.53 billion, through Stanbic IBTC’s Receiver to one of its customers, Rainoil Ltd. Rainoil is one of Ascon’s competitors in the downstream sector and, in 2019, while Stanbic IBTC was its banker, made a bid to acquire controlling shares in Ascon Oil. It was learnt that Ascon retook possession of the property following a July 24, 2020 order of Justice Mohammed Liman of the Federal High Court in Lagos. The suit, marked FHC/L/CS/567/2020, arose following a N1.7billion loan facility. The property had been in the Receiver’s possession following the judge’s May 15, 2020 ex-parte order which authorised Police protection for the Receiver to protect and preserve the fuel retail station and restrain ASCON from interfering with the Receiver’s discharge of his functions.
But on July 24, 2020, Justice Liman vacated that order in part following Ascon’s claims of suppression, non-disclosure and material misrepresentation of facts against Stanbic IBTC, which the bank resisted. Before the July 24 ruling, and in seeking to recover its property, ASCON had written to Stanbic IBTC, through its Managing Director, Demola Shogunle, stating that its outstanding indebtedness was now available and that ASCON was ready to make the payment subject to an audit of its account. But the bank, it was learnt, declined, stating that the property had been sold. It also declined Ascon’s requests for details of the expedited process of the transaction or evidence of any cash movement by which the property was purportedly conveyed to Rain Oil. On May 27, 2020, Ascon approached the court to set aside its earlier orders and nullify all steps taken pursuant to the orders. It argued, among others, that since ASCON was not initially allowed to make its own case meant it was denied the right to fair hearing.
On July 24, 2020, Justice Liman agreed that the Receiver was wrong in law to have brought his application for the orders, ex-parte and that ASCON should have been put on notice. The court discharged its earlier order of May 15th, 2020 restraining Ascon from preventing the activities of the Receiver. Thus, the order preventing Ascon from resisting the activities of the Receiver was vacated. Ascon had alleged in its motion on notice, that the purported Deed of Legal Mortgage dated June 5th, 2019, through which Stanbic IBTC derived its right or power to either appoint a Receiver or sell the property was a forgery. “At the time the Deed of Legal Mortgage was purportedly executed, ASCON had by letters of 28th and 31st May 2018 protested the inclusion of the property for perfection. Thus, Ascon could not have executed a Deed of Legal Mortgage over the same Property,” the document averred. Ascon also alleged that forensic analysis of the purported Deed of Legal Mortgage revealed significant inconsistencies as two supposed signatures, were materially different from their regular signatures and the signature page of the purported Deed of Legal Mortgage is a counterpart copy of previously executed Deeds of Legal Mortgage. It was learnt further that prior to the extant issues, Ascon in May 2019, paid N500 million out of its outstanding indebtedness. It also requested for a restructuring of the loan facilities to enable it to meet the escalating repayment obligations on it following fresh terms/conditions by the bank. The firm made an offer to the bank requesting to pay a lump sum of N500 million on or before December 31, 2019, with outstanding balance spread over 24 months, and suspension of further interest charges, which the bank declined. Stanbic IBTC had on April 27, 2016, granted restructured ASCON earlier financial obligation of about N1, 700,000,000 into a term loan for 48 months. ASCON commenced repayment of the restructured facility but could not fully repay due to the economic situation/climate of 2016. ASCON has however paid about N800 million out of the term loan till date. In 2017, it requested for additional trading facilities which would assist it in trading and thereby make monies that will be used to offset the existing Term Loan. To this end, Stanbic IBTC agreed to provide ASCON a Trade Finance Facility. The securities listed to secure the term loan are: Property at Plot 27, Balarabe Musa Crescent, Victoria Island; Lube Plant located along Lagos-Ibadan Expressway, Magboro; Petrol Station at Osolo Way, Isolo; and Petrol Station at Gbagada-Oshodi Expressway, Lagos. Stanbic IBTC had confirmed that these assets were sufficient to cover the Term Loan element, but requested for additional security to cover the Trade Finance Facility element of the facility. Accordingly, ASCON provided three more real estate assets, one of which is the property in question; ASCON Petrol Filling Station, Lekki Phase 1. At that time, Stanbic IBTC understood that the title documents were being deposited in relation to the trade facility alone. In agreeing to deposit the title documents to these properties, it was firmly agreed that once the proposed trading transactions for which the Trade Finance Facility was to be used to finance was cycled out, the pledged properties would be returned as they were not to be used as security for the Term Loan element and no Deed of Legal Mortgage was executed in relation to the Lekki property.
