Dangote Group grapples debt burden


Aliko Dangote

Africa’s richest man, Aliko Dangote of Nigeria is reportedly in financial log-jam

from HENRY IFEANYI in Lagos, Nigeria
LAGOS – THE company might rate among the top conglomerates in the world and the biggest in the continent, but Dangote Nigeria Plc is currently grappling with huge debt burden, it has emerged.

A legal battle is presently raging on between Union Bank Plc and two subsidiaries of the company, Dansa Foods Limited and Bulk Pack Services Limited over a N5, 2 billion debt which the company has allegedly failed to pay back since 2008.

The two companies are managed by Sani Dangote, younger brother to the conglomerate’s Chief Executive Officer, Aliko Dangote.

A Federal High Court hearing the suit in Lagos has consequently ordered 20 commercial banks in Nigeria to dishonour all withdrawal cheques from Sani Dangote pending the full determination of the suit.

Justice Okon Abang, who made the order in a bench ruling, said the order subsists until September when the court would entertain all applications in a suit brought by Union Bank Plc against Dangote and his companies.

The judge also ordered all the banks involved to, within five days of the interim order, file affidavits declaring the defendants statement of accounts with them.

Responding to the court order, counsels responding Zenith Bank Plc and Diamond Bank Plc disclosed that Dangote Plc was equally heavily indebted to them.

Zenith Bank specifically said Dangote was indebted to the bank to the tune of EUR 7 million.

Diamond Bank officials in court did not however disclose how much Dangote Plc owed the bank.

In the suit instituted by Union Bank Plc, the bank urged the court to urgently grant the mareva order against Dangote Plc because in a bid to evade payment of the loan, Dangote had been making frantic efforts to deplete the funds in the accounts of his companies.

It is reported the bank’s investigations revealed that the defendants had started diverting the funds to Dubai in the United Arab Emirates, Canada and Switzerland.

One Olufunmilola Ayoola, an official of the bank, who deposed to the bank’s affidavit, alleged that the failure of the defendants to liquidate the monumental debt had negatively affected the Nigerian economy, a development which the bank claimed necessitated the suits.

According to Ayoola, Union Bank Plc has been having difficulty in extending credit facilities to small scale businesses which in turn would have helped in boosting the nation’s economy and salvage the country from its present malaise of corruption and under development crisis.

The bank stated that the funds which Dangote and his companies failed to pay, were capable of going a long way in impacting positively on the nation’s economy.

– CAJ News








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Posted by on Sep 5 2014. Filed under Featured, Finance, Finance & Banking. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry

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