Algrain Foods’ Case Against FCMB: “The Bank Did Not Manage the Account Effectively”, Says Witness

By Frank Oshanugor

At the resumed hearing on Wednesday 19th March, 2025 of Suit No. LD/3873/CMW/2018 filed against First City Monument Bank (FCMB) by the Chairman/Chief Executive Officer of Algrain Foods Limited, Chief Anthony Obidulu in the Lagos High Court sitting at Osborne Foreshore Estate II, a witness testifying under cross-examination by Obidulu’s lawyer, Chief Aloysius C. Ezenduka had submitted that FCMB did not manage Algrain’s account effectively with respect to the N100million loan from the Central Bank of Nigeria which had a tenure of five years with a moratorium periis of two years as contained in the schemes guidelines and the Guarantee Certificate issued to FCMB by the Central Bank of Nigeria.

Testifying from the witness box, a third witness invited so far (by the plaintiff/claimant’s counsel) Pastor (Mrs.) Ndidi Ifeobu, a certified financial consultant of Zomeks Nigeria Limited, admitted that as a banking and financial consultant, she was engaged by the management of Algrain Foods to audit the company’s finances with reference to the N100million loan. Algrain Foods Limited was one of the beneficiaries of the Federal Government’s intervention loans tagged Small and Medium Enterprises Credit Guarantee Scheme (SMECGS) in 2011.   The company got a N100 million of the intervention fund through the bank (FCMB) because one of the conditions for getting the  fund was that one must go through a commercial bank to access it. So Algrain opened an account with First City Monument Bank Plc., from where the fund was accessed with first draw down in 2013.

The witness whose audit report was admitted as an exhibit by the court, summarized that from her findings while auditing the account, she could deduce that the bank did not manage it effectively even though the customer (Algrain) made withdrawals in installments. According to Mrs. Ifeobu, in the course of her auditing; she had carefully scrutinized certain documents and processes which included bank statement, banker’s tariff, CBN monetary guideline, SME guarantee scheme documents and certificates. Her findings in all these, gave rise to her conclusion of improper management of the account by the Bank particularly with regards to the moratorium. She noted that the bank charged interest on the principal sum within the moratorium period and later went ahead to do more deductions from the account even where it was clear that Algrain was not in debt.

In November 26, 2024, the case had come up with Prof. Taiwo Osipitan (counsel to the defendants) conducting the cross examination of Chief Obidulu with respect to his claims in the Suit. The matter being presided over by Hon. Justice (Dr) Olukolu of Lagos High Court sitting at Osborne Foreshore Estate II has to do with claim in trespass and illegal takeover of the personal assets of Chief Anthony Obidulu and loss of income that could have been generated by the noodles manufacturing factory which was disrupted due to the illegal takeover.

During the cross-examination of Obidulu last November, he had responded to questions put across to him, highlighting the fact that even though the bank was claiming that he used the property in his factory situated on Plots 15/17 Canal Estate, Lagos as collateral, there was no “draw down” on they amount purported to have constituted the loan in question.

The Algrain Foods boss, Chief Obidulu along with his wife, Lady Nkechi Obidulu were present in court during the Wednesday cross-examination.

The Court later adjourned to 2nd April, 2025 for further cross examination of the witness by the defendants’ counsel.