One of Much Fraudulent Act of Heritage Bank Exposed …SAN Sue Bank over Alleged Manipulation of Account

A Senior Advocate of Nigeria sues Heritage bank over alleged fraudulent manipulation of his account

     A Federal high court sitting in Ikoyi,Lagos State, south west Nigeria has adjourned till 31st of March 2022 for hearing, the suit instituted against Heritage Bank of Nigeria by a Lagos Lawyer Barrister Dada Awosika SAN,over alleged manipulation of his account.

Mr. Awosika SAN practices under a business name and style of D.A. Awosika & Partners and maintain a current account with the bank, alleged thus: that Heritage Bank conscripted him to open the aforementioned account in order that the judgment sum arising from certain terms of settlement executed between his clients (Mr. Olajide Aleshiloye Williams/Otunba Segun Jawando) on one hand and the bank on the other hand in Suit No: LD/7313/2014 between Mr. Olajide Aleshiloye Williams/Otunba Segun Jawando vs. Beach Resorts Nigeria Plc/Heritage Bank Limited be paid into the said account.

In opening the account the bank detailed one of its senior officials to be his account officer to assist in opening the said account and for proper endorsement and execution of the current account opening package which he properly endorsed leading to normal operation of the said account.

    At all material times,  he agreed with the  bank to run and operate the said current account in line with good banking standard and employ the best ethical and professional manner consistent with global best practice.

      Further to the aforementioned paragraphs and in line with the consent judgment entered on the 12th of January 2016 between the Plaintiff’s client and the Bank, the bank paid a total sum of N250,000,000.00 into the Plaintiff’s stated account as judgment sum at various times in February, 2016, May 2016 and August 2016 for the benefit of the Plaintiff’s clients who were Claimants in Suit number

LD/7313/2014.

Surprisingly, in the narration contained in the statement of account of the Plaintiff, the bank manipulated the narration and discreetly described the payment as fees to the Plaintiff.

Mr. Awosika SAN avers that it was an implied term of the banker-customer relationship between parties herein and of the mandate submitted to the bank by him that the Bank would exercise reasonable skill and care in the running of his account and that at no time will the banking and financial records of the Plaintiff be furnished or made available to a third party except with his consent and/or in a normal execution of a valid and subsisting order of court.

However, in breach of the sacred mandate donated to the bank for the running of the Plaintiff’s account, the bank disclosed, furnished and passed over to the Federal Inland Revenue Services (FIRS) the Plaintiff’s financial and banking detail and this ultimately led FIRS to issue notice to the Plaintiff to remit unpaid taxes for 2016/2017 (as Company Income Tax and Value Added Tax (VAT)} directing the Plaintiff to pay the sum of N23,274,166.19 being turn over of N258,601,846.53 in custody of the bank.

The Plaintiff immediately responded to the FIRS letter and debunked the insinuation and misconceptions that the Plaintiff was operating as a limited liability company to pay Income Tax.
Thereafter it came as a shock to the Plaintiff that the bank posted POST NO DEBIT on the Plaintiff account without any communication to the Plaintiff in compliance with a directive of FIRS.

Upon protest at the Bank’s premises at Adeola Odeku on the 6th of February, 2019, the bank informed the Plaintiff that the freezing order on the Plaintiff’s account was directed to be placed by FIRS as a result of banking and financial details submitted to FIRS by the Bank.

The Plaintiff made further protest to FIRS headquarters in Abuja, which later issued directive to the bank to remove the ‘Post No Debit’ and any other freezing orders, placed on the Plaintiff’s account since February 4, 2019. The bank placed this Post No Debit’ on the Plaintiff’s account without any order of court and also the bank furnished the Plaintiff’s banking and financial records to FIRS without order of court or consent of the Plaintiff.

The Plaintiff alleged further that he made several transfers and cash deposits into his firm’s account with the bank, When the bank thereafter sent notifications of receipt of this transfers and cash deposits, the Plaintiff discovered that the bank had surreptitiously applied a debit of over N23 Million into the Plaintiff’s firm’s account without notice of such activity to the Plaintiff.

The Plaintiff further avers that the bank appropriated, converted and utilized the entire credit balance in the Plaintiff’s firm’s account as well as all transfers and cash deposits made into the said account in purported satisfaction of repayment obligations in regard to a purported phony debt allegedly outstanding and payable to the bank.

On Wednesday the 20th of November, 2019, the Plaintiff visited the Defendant’s Ashabi Cole branch, Agidingbi, Ikeja being the nearest branch to the Plaintiff’s office to vehemently protest the fraudulent manipulation of his firm’s account but was informed by the manager on duty that the branch could not help him as there was no complaint resolution mechanism available to resolve the issue in that branch.

However, the manager of Ashabi Cole branch of the bank confirmed the debit of over N23Million lumped into the Plaintiff’s firm’s account and advised that the Plaintiff write the bank detailing his complaint to the bank’s Managing Director for expeditious resolution.

The Plaintiff avers that the bank sent his firm’s account’s November, 2019 statement to him on the 2nd of December 2019 and it came as a shock to the Plaintiff that the bank hid or covertly suppressed the debit of over N23Million in the said Plaintiff’s account.

Sequel to this, the Plaintiff made further cash transfers to his account on the 2nd and 7th December, 2019, and surprisingly, when notifications were sent to the Plaintiff, those cash deposits were illegally and wrongfully applied by the bank to a non-existent repayment obligation of the N23Million cooked up by the bank into the Plaintiff’s firm account.

In a bid to get to the bottom of the fraudulent manipulation of the Plaintiff’s account, the Plaintiff wrote the bank in his letter of December 2, 2019 received the same day to demand for the immediate removal of over N23 Million illegally debited and posted into the Plaintiff’s firm account.

The Plaintiff avers that the bank fraudulently manipulated the Plaintiff’s firm account and posted a bogus debit of over N23Million

 into the said account without the Plaintiff’s consent and no information was made available to the Plaintiff regarding this illegal and phony debit and there was no court order directing that this debit of over N23 million be posted into the Plaintiff’s account.    In the statement of particulars of fraud,the

Plaintiff stated that:

He has no subsisting repayment obligation arising from any overdraft or transaction involving the use of depositors’ funds at the instance of the Plaintiff to warrant any repayment obligation.

The bank appropriated the credit balance in the Plaintiff’s account in excess of N76,000. in satisfaction of a sham and bogus debit of over N23 Million Naira.

All cash deposits and transfers made into the Plaintiff’s firm’s account were utilized, converted and appropriated by the bank without seeking the Plaintiff’s consent and without an order of court to that effect.

The bank discreetly narrated judgment sum payment to the Plaintiff’s clients as fees paid to the Plaintiff when in fact there were nonarration of services rendered by the Plaintiff to the bank to justify such. The Defendant disguised the payment of N250 Million to the Plaintiff’s clients as fees to the Plaintiff to avoid payment of VAT and Witholding tax to the relevant government agencies.

The bank operated the Plaintiff’s account outside the standard of good banking practice and that the bank conducted its banking business outside the ethical and professional manner consistent with global best practice;

The bank did not bring to the Plaintiff’s attention the origin/source of the bogus and illegal debit of over N23Million posted to the Plaintiff’s account as against the standard practice for a banking outfit to bring to the attention of their customers any form of activity or information concerning their accounts.

The bank breached the duty to exercise reasonable skill and care as well as that of confidentiality in the running of the Plaintiff’s account.

He did not at any time apply for and utilize any overdraft facility, nor did he apply for credit facility from the bank to justify any set off or appropriation of the Plaintiff’s credit balance or cash deposits made into the Plaintiff’s account.

The Plaintiff shall rely on several Central Bank Of Nigeria (CBN)’s circulars and regulations as well as code of conduct in the Nigerian Banking Industry signed to by the bank to prove various violations against the bank espoused above.

The Plaintiff has suffered loss and damage as a result of the fraudulent manipulation of his firm’s account, depriving him access to his much needed funds in the said account and for several violations by the bank of crucial banking ethics and standard.

Consequently the Plaintiff’s claims against the Heritage bankare as follows:
A declaration that the bank was not entitled in law to appropriate and convert to its own use the credit balance of N76,000.00 and several other cash deposits made into the Plaintiff’s firm’s account at various times in purported satisfaction of a non existing debt obligation allegedly owed to the bank by the Plaintiff thus breaching the fiduciary duty and duty of care owed the Plaintiff in the running and operation of the said Plaintiff’s account.

A declaration that the bank fraudulently manipulated the Plaintiff’s firm’s account by surreptitiously hiding, disguising and posting a bogus debt of over N23Million into the Plaintiff ‘s said account and the bank illegally coverted,appropriated and utilized all the credit balance and several other cash deposited into into the Plaintiff’s debit and of said account utilized in purported satisfaction of a non existing debt.

A declaration that the bank failed to exercise reasonable skill and care in carrying out its banking business in relation to the Plaintiff’s firm’s account, when the bank illegally debited the Plaintiff’s account with the sum of over N23Million without any order of court and most importantly when the Plaintiff did not utilize any overdraft nor have any collateral transactional agreement for over draft or trade finance facility on the said account

An order of the Court directing the bank to forthwith expunge and reverse the bogus illegal debit of the sum of N23Million applied to the Plaintiff’s firm’s account and also immediately credit the Plaintiff’s account with all sums already appropriated, converted and utilized by the bank with interest at Central Bank Premises (CBN) prime lending rate of 25%

An order of the Court directing the bank to pay the sum of N650Million as general, aggravated and exemplary damages for the outrageously reprehensible conduct of the bank occasioning loss and damage to the Plaintiff in the bank fraudulently manipulating, appropriating and converting the credit balance and other cash deposits made into the Plaintiff’s account and for the bank’s failure to exercise reasonable skill and care in the running of the Plaintiff’s account and for the breach of fiduciary duty and confidentiality.

Cost of this action as the Court may deem fit to order.
Heritage bank In its statement of defence denies all the allegation of facts contained in the statement of claim but,admits that the Plaintiff opened a bank account so that the judgement sum in suit LD/7313/2014 may be paid into it.
In further denial of the Statement of Claim,the Heritage bank states as follows:
The narrations used to describe the payments made into the Plaintiff’s accounts in February 2016, May 2016 and August 2016 were not manipulated but reflected the actual purpose/narration.and that the Defendant acted at all times in line with extant rules and regulations and laws.

The bank complied with all respect with the provisions and requirements of the Code of Conduct in the Nigerian Banking Industry.

The Code of Conduct places certain confidentiality obligations on the Defendant with respect to the Plaintiff’s accounts and dealings. However, Paragraph 1.2(i)(a) of the Code of Conduct creates certain exceptions to the requirement of confidentially, and provides that “A member shall (ii) Not disclose or permit the disclosure to any third party, and confidential information concerning his employer’s or his customers’ business during or after employment except as required or permitted/enjoined by law thus; (a) where a bank is compelled by a court of competent jurisdiction or regulatory provision to do so”.

Section 31(d) of the Federal Inland Revenue Service (Establishment)

Act allows the Federal Inland Revenue Service to “require any person to give information as to any money, fund or other assets which may be held by him for, or of any money due from him to, any person”. The bank’s compliance with the above provision therefore falls within the exception contained in Paragraph 1.2(i)(a) of the Code of Conduct.

The bank having been appointed by the Federal Inland Revenue Service as a Collecting Agent, therefore acted in line with the relevant statutory provisions when it released the Plaintiff’s information to the Federal Inland Revenue Service

In further denial of the Statement of Claim, the bank states that the Plaintiff was indeed aware that a lien was place on his Account as the Plaintiff was informed by the bank’s Branch Manager about the lien through a telephone call immediately it was placed.

The bank states that the earlier lien placed on the Plaintiff’s account was lifted not based on purported representations made by the Plaintiff to the Federal Internal Revenue Services, but rather it was based on the directives received from the Federal Internal Revenue Services dated 15 February 2019 which suspended the earlier freezing directives for a period of thirty (30) days to enable the affected taxpayers including the Plaintiff to regularise their tax status.

The bank further avers that having received final notification from the Federal Internal Revenue Service that the Plaintiff had outstanding tax obligations and in the absence of any challenge from the Plaintiff to such notification, the bank was consequently entitled to treat the funds deposited by the Plaintiff in his accounts, in excess of N76,000.00 as not available to meet drawings.

There was no sham or bogus debit of over N23Million in the Plaintiff’s account. Rather, a lien was legally and properly placed on the Plaintiff’s account in view of the Plaintiff’s failure to resolve all outstanding tax issues with the Federal Inland Revenue Service.

It was the Plaintiff’s obligation to resolve all tax issues with the Federal Inland Revenue Service, and to forward documentation regarding such final resolution to the bank.

The bank has no power or control over how the Federal Inland Revenue Service calculates unpaid tax involving the Plaintiff, whether involving Company Income Tax or Value Added Tax.

All cash deposits and transfers made into the Plaintiff’s firm’s account  were treated in accordance with the bank duties as contained in the extant provisions of the Federal Inland Revenue Service (Establishment) Act

The bank further avers that the lien placed on the Plaintiff’s Account has been lifted since 20 January 2020 and lodgements made by the Plaintiff in excess of N76,000.00  are reflected in the Plaintiff’s account. 

The bank avers that the Claim of the Plaintiff is scandalous, highly vexatious, embarrassing, speculative and should be dismissed with substantial cost