United Bank for Africa (UBA) Plc has asked a Lagos court to send nine people linked to Western Metal Products Co. (WEMPCO) to prison, alleging they forced a court-appointed receiver out of the steel group’s Ogun State factory. This is the latest step in UBA’s effort to recover N61.45 billion it says WEMPCO owes. The committal notice was filed at the Federal High Court and published in The Nation on Tuesday, October 27.
The respondents named in the committal notice include Lewis Shui Noor Tung, Phillip Shui Che Tung, Alhaji M.A. Ola Yusuf, Tung Lawrence Blake, Alli Aare Hadji Tokunbo, Paul Shui Po Tung, Robert Tung, CL Ip, and Taiwo Alli. They are accused of “wilful, deliberate and orchestrated disobedience” of an April 2 order. UBA is seeking that they stay in prison until they comply with the court order.
On April 2, Justice Akintayo Aluko froze up to N61.45 billion of WEMPCO-linked funds across 27 banks and fintechs. He also appointed Romeo Ese Michael receiver-manager over assets not already pledged under a 2019 credit agreement. UBA’s affidavit alleges that after bailiffs handed over the Magboro/Ibafo plant, the respondents brought in thugs, broke the receiver’s locks, and threatened his staff with “serious injury.”
The affidavit further states that the respondents kept running the business and diverting its funds. None of the allegations has been tested in court, and WEMPCO’s response was not immediately available. The court papers also show failed talks between UBA and WEMPCO. On June 22, WEMPCO’s lawyers proposed an interim standstill, a joint reconciliation of the accounts, and “a structured framework for repayment.”
UBA’s lawyer agreed to meet, but the two sides met at UBA’s Marina head office on June 26 and agreed a joint inspection of the Magboro site for July 2. However, WEMPCO and its lawyers did not show up and have since “gone incommunicado,” the affidavit says. The bank says the plant has stayed under the respondents’ control since then.
The case tests whether Nigerian court receivers can actually take control of a borrower’s assets. A committal order against WEMPCO’s controlling shareholders would send a strong message to other chronic debtors. WEMPCO was founded by K.F. Tung, who first came to Nigeria in 1967. The company has several subsidiaries, including Lagos Oriental Hotel Ltd., United Rolling Mills Ltd., and Prime Nigeria Tiles Co.
UBA’s efforts to recover the debt are ongoing, with the bank seeking to take control of WEMPCO’s assets. The outcome of the case could have significant implications for other companies and individuals with outstanding debts to banks in Nigeria. The court is yet to rule on the committal notice, and it remains to be seen how the case will be resolved.
Key points
- UBA seeks jail term for 9 WEMPCO directors over N61.45 billion debt.
- WEMPCO allegedly utilized thugs to evict court receiver from Ogun Steel Plant.
- The case tests whether Nigerian court receivers can take control of a borrower’s assets.
