This is obviously double trouble for Deap Capital Management & Trust, as it enters into a deeper hole, with the Asset Management Corporation of Nigeria (AMCON) announcing Wednesday that it has confiscated three of the company’s assets in Lagos over a N1.6bn debt the corporation described in a statement as “a distressing indebtedness.”
The move followed an judgement of Justice John Terhemba Tsoho (as he then was) of the Federal High Court, Lagos division, and another by Justice Abdullah Muhammad Liman, granting the Corporation leave to attach and sell traced properties of the Chief Promoter of the company, Emmanuel Ugboh.
The affected properties seized by AMCON are: No. 38, Dele Orisabiyi Street, Okota-Isolo; No. 75 Femi Kila Street (now renamed 75, Oba Kabiru Agbabiaka Street) Okota; and No. 79 Femi Kila Street (now renamed 75, Oba Kabiru Agbabiaka Street), all in Lagos.
The court also ordered the forfeiture of the credit balances, monies and/or funds in the bank accounts of Ugboh in favour of AMCON, and in satisfaction of the outstanding judgement sum per judgment of Justice Tsoho first delivered on January 28, 2015.
AMCON said it complied with the enforcement order on July 1, 2020, when it took effective possession of the properties through its Debt Recovery Agent – the law firm of Etonye & Etonye.
The asset forfeiture move may have followed the inability of Nigeria’s Securities & Exchange Commission (SEC) to buy more time for Deap Capital as noted in the company’s May 2020 filing at the Nigerian Stock Exchange (NSE) of its business continuity plan.
However, AMCON recalled that the case of Deap Capital Management and Trust Limited and its promoter has been a prolonged one.
The loan, it stressed, was purchased during the first phase of Eligible Bank Assets (EBA) from Zenith Bank and FCMB in 2011, after which it engaged the company in a legal battle since 2012.
As a sign of its good faith, AMCON said it even offered the obligor series of opportunities to negotiate repayment to no avail, and that due to the inadequate collateral, it commenced asset tracing on Emmanuel Ugboh.
The exercise, it added, revealed the affected properties, which the corporation has now enforced in line with Section 49 (1) & (2) of the AMCON Act 2019 (As Amended), which states that:
Section 49 (1) of the Act states that “Where the Corporation has reasonable cause to believe that a debtor or debtor company is the bona fide owner of any movable or immovable property, it may apply to the Court, before or at the time of filing of action for debt recovery or other like action or at any time after the filing of action, and before or after the service of the originating process by which such action is commenced on the debtor or debtor company, by motion ex-parte for an interlocutory order granting possession of the property to the Corporation pending the hearing and determination of the debt recovery or other action to abide the decision in such action.
“(2) The Corporation shall serve a certified true copy of the order of the court issued under subsection (1) on the debtor or debtor company. (3) Notwithstanding anything to the contrary in any enactment, an order made under subsection (1) shall subsist till judgment or a final determination of the action, unless expressly discharged by the Court,” corporation stressed.
The last financials filed by Deap Capital & Trust, a financial services institution listed on the Nigerian Stock Exchange (NSE), operating in the capital market, mortgage banking and oil and gas sectors, was its first quarter ended December 31, 2019, presented in February. The result showed the company’s unhealthy financial standing, with total assets of N439.186m, up from N438.38m in the corresponding period of 2018, and total liabilities valued at N2.481bn, from N2.472bn, the lion’s share of which was the N1.579bn borrowings. Total equity (shareholders’ funds) therefore was negative at N2.042bn, up from N2.034bn, which calls for injection of fresh capital by the owners.
As part of the business continuity submitted to the NSE, in what Deap Capital said was to minimize effects of the Coronavirus (COVID–19) on its business, the board presented a five-year strategic plan aimed at a turn around.
The objectives include reducing or eliminating disruptions to normal business operations through training of staff on specific tasks; minimizing financial loss to the organization; and preventing or eliminating damage to its reputation, since meeting established obligations, despite calamities portrays a business in a favourable light, a situation it failed actualize in the brush with AMCON.
