Writing by Sediq Mutari....KINDLY READ THE FULL STORY HERE▶

On the 17th of June 2024, Guaranty Trust Bank (GTBank) initiated legal proceedings against approximately 60 high-ranking officials from 13 commercial banks amid an ongoing dispute between GTBank and Afex Commodity Exchange regarding a N17 billion Anchor Borrowers Programme loan.

The 60 executives, which include chairpersons, chief executive officers, directors, and company secretaries from the 13 banks, are facing contempt charges for allegedly disregarding a No-Debit-Order placed on Afex Commodity Exchange’s accounts with their respective banks.

In a suit numbered FHC/L/CS/911/2024 involving Guaranty Trust Bank Limited and AFEX Commodities Exchange Limited, the Federal High Court in Lagos, presided over by Justice CJ Aneke, issued an order for the bank chairpersons, managing directors, directors, company secretaries, and the liquidator of Heritage Bank (Nigeria Deposit Insurance Corporation) to be held in contempt for failing to comply with its ruling on May 27, 2024.

A legal notice titled ‘Order to Serve Notice of Disobedience to Court Order via Newspaper Publication’ was published in several national dailies, including The PUNCH, on Thursday. The notice granted leave to the plaintiff applicant to serve Form 48 (Notice of Consequences of Disobedience to Court Order) and other relevant forms and processes to the 1st to 60th parties cited for contempt.

The court ruling, dated May 27, 2024, directed twenty banks to transfer funds in favor of Afex Commodity Exchange until the N17.81 billion debt is repaid. This amount includes the outstanding N15.77 billion loan and unpaid costs of recovery and incidental expenses totaling N2.04 billion.

Furthermore, the court granted an injunction allowing GTBank to seize and sell commodities stored in Afex’s 16 warehouses across seven states. These commodities were acquired using funds from the Central Bank of Nigeria Anchor Borrowers’ loan facility.

Previously, the court had initiated contempt proceedings against AFEX and some of its principal officers, including Ayodele Balogun, Jendayi Fraaser, Justin Topilow, Mobolaji Adeoye, and Koonal Ghandi.

AFEX, in response to the interim court order, stated that it had repaid approximately 90% of the loan facility. However, a portion of the loan remained outstanding due to economic challenges faced by farmers, who were unable to repay their debts in full.

The lingering effects of economic hardships have hindered farmers from repaying their loans, impacting AFEX’s ability to settle its outstanding debt. AFEX has urged the Central Bank of Nigeria to activate the collateral guarantee clause included in the Anchor Borrowers Programme to support recovery efforts and sustain agricultural activities.

The Anchor Borrowers Programme, initiated by the CBN in 2015, aimed to enhance economic linkages between smallholder farmers and processors to boost agricultural output and ensure food price stability. As of 2022, over 4.8 million individuals had benefited from the programme, with the CBN releasing over N1.079 trillion, of which over N500 billion is due for repayment.

However, the CBN has since discontinued the programme as it shifts its focus from development financing interventions to maintaining price and monetary stability.