UBA Seeks Jail For Nine WEMPCO Executives Over N61.45bn Debt Dispute

• Bank Alleges Court-Appointed Receiver Was Forced Out Of Ogun Factory As Recovery Battle Escalates

United Bank for Africa (UBA) Plc has asked the Federal High Court in Lagos to commit nine individuals linked to Western Metal Products Company (WEMPCO) to prison over alleged disobedience of a court order in a dispute involving N61.45 billion in outstanding debt.

The bank accused the individuals of forcibly removing a court-appointed receiver-manager from WEMPCO’s steel manufacturing facility in Magboro/Ibafo, Ogun State, in what it described as a deliberate attempt to frustrate the recovery process.

The committal notice, published in The Nation on Tuesday, October 27, followed an order permitting service of the court process through newspaper publication.

UBA is seeking an order directing the respondents to remain in custody until they comply with the court’s directives.

Those named in the application are 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. The court documents list their address as 18 Wempco Road, Ogba, Ikeja, Lagos.

One of the respondents, Alli Aare Hadji Tokunbo, is the managing director of Nigerian Enamelware Company Plc, a company listed on the Nigerian Exchange and among the 17 corporate defendants in the case. Robert Tung is also a director of the company.

The dispute centres on a court order issued on April 2 by Justice Akintayo Aluko, who directed the freezing of funds totalling up to N61,445,695,993.76 linked to WEMPCO and its associated companies across 27 banks and fintech platforms.

The judge also appointed Romeo Ese Michael as receiver-manager over assets not already pledged under a 2019 credit agreement.

Under the order, financial institutions, including Moniepoint, OPay and Kuda, were directed to identify and preserve funds belonging to the defendants. The receiver-manager’s mandate also extends to two Wärtsilä power generators, wherever they may be found.

According to an affidavit filed by UBA, the bank’s receiver-manager took possession of the Magboro/Ibafo facility after court bailiffs executed the order. However, the bank alleged that the respondents subsequently brought in suspected thugs, broke the receiver’s locks and threatened members of his staff with serious injury.

UBA further alleged that the respondents continued operating the business and diverting its funds despite the court’s directives.

The allegations have yet to be determined by the court. WEMPCO’s response to the latest application was not immediately available.

Court documents also indicate that attempts to resolve the dispute through negotiations failed to produce an agreement.

On June 22, WEMPCO’s lawyers, SimmonsCooper Partners, led by Senior Advocate of Nigeria Dapo Akinosun, wrote to UBA requesting an urgent meeting.

The company proposed an interim standstill arrangement, a joint reconciliation of the accounts and the development of a structured repayment framework.

UBA’s lawyer, Temilolu Adamolekun, also a Senior Advocate of Nigeria, responded the following day, questioning the company’s request for dialogue in the face of what the bank described as the use of physical force and resort to self-help.

Nevertheless, Adamolekun agreed to a meeting between the parties.

The meeting took place at UBA’s Marina head office on June 26, where both sides reportedly agreed to conduct a joint inspection of the Magboro facility on July 2.

However, UBA’s affidavit alleges that WEMPCO and its representatives failed to attend the scheduled inspection and subsequently became unreachable.

The bank maintains that the facility has remained under the respondents’ control since then, despite the existing court order.

The latest development represents another stage in UBA’s efforts to recover the substantial sum it claims is owed by the industrial group and its associated companies.

The defendants include Lagos Oriental Hotel Limited, United Rolling Mills Limited, Wempco Steel Mill Company and Prime Nigeria Tiles Company, among other entities.

WEMPCO was founded by K.F. Tung, who first arrived in Nigeria in 1967, and has established a presence in the country’s industrial and manufacturing sectors.

The case has implications beyond the immediate dispute, particularly regarding the enforcement of court orders appointing receivers over the assets of indebted companies.

At the heart of the matter is whether a receiver-manager appointed by a court can effectively take control of assets when the individuals controlling the business are alleged to have resisted the appointment.

A decision on UBA’s committal application could therefore become significant for banks seeking to enforce security arrangements and recover substantial loans through the courts.