Bankers’ Committee verdict in dispute between Honeywell and Ecobank

The Bankers Committee (Sub-committee on Ethics and Professionalism) has ruled that Honeywell Group is not indebted to Ecobank Nigeria Limited. The Committee, according to its report on the dispute, which was obtained from the records of the court in the ongoing matters, ruled that an agreement for Honeywell to pay the bank N3.5billion as full and final payment was valid “and should be complied with.

The report, addressed to Ecobank’s Managing Director/Chief Executive, was signed by the Secretary, Sub-committee on Ethics and Professionalism, ‘Seye Awojobi.

Ecobank has five pending applications at the Federal High Court in Lagos (three before Justice Mohammed Yunusa and two before Justice Okon Abang) seeking to recover an alleged N4.1billion debt owed it by Honeywell Flour Mills Plc and its sister companies. Honeywell also has a pending suit before Justice Mohammed Idris owing to disagreements between it and Ecobank as to the complete liquidation of the group’s outstanding obligations to the bank having regard to the terms and conditions of the credit facility.

The Bankers’ Committee, in the June 26 report, with reference number ODA/FMA/BUO/1493, said it received a petition that the bank was “attempting to renege on a settlement agreement” on facilities it granted to Anchorage Leisures Limited, Siloam Global Services Limited and Honeywell Flour Mills Plc.

The Committee said: “After several offers and counter offers with respect to the amount for the settlement, the parties agreed at the meeting of 22nd July, 2013, involving your bank’s MD/CEO and the Honeywell Group Chairman that Honeywell would pay the sum of N3.5billion in full and final settlement of the indebtedness of the three companies. It was also agreed that Honeywell would immediately proceed to pay the sum of N500million as a sign of faith towards the agreement.”

According to the report, Honeywell paid N500 million to the bank on July 23, 2013, and completed payment of the agreed N3.5billion on January 10, 2014. Thereafter, the group requested for a letter of discharge from the bank.
However, the bank, in a November 14, 2014 letter to Honeywell Group, claimed that the N3.5billion was a partial payment, and that the agreement that the sum was in full and final settlement was an “in principle understanding”. The bank also stated that Honeywell Group’s Chairman was a “related party” to the transactions, hence the request for a discharge letter could not be granted.

The Committee found that it was not in dispute that Ecobank’s management consummated an agreement on July 22, 2013 with Honeywell Group to accept N3.5billion in full and final settlement. The Committee stated that at the time the transactions were consummated with Oceanic Bank Plc (legacy bank), Honeywell Group’s Chairman was neither on the board of the bank nor the board of Ecobank Transnational Incorporated, the parent company.

The Bankers’ Committee said based on clarifications from the Banking Supervision Department of the Central Bank of Nigeria, he was not a “related party” to the transactions as he was not on Oceanic Bank’s board when the transactions were consummated.

“After due consideration of findings, the sub-committee ruled that the agreement between the borrower and your bank to pay the sum of N3.5billion as full and final payment of the borrower’s indebtedness is valid and should be complied with and this was ratified by the Bankers Committee,” the report stated.