It seems that Union Bank of Nigeria Plc is facing one of its most dire nightmares to date after a Federal High Court awarded against the bank N1.49 trillion in damages.
The bank has appealed to the Supreme Court to upturn the appeal court judgment.
In the Union Bank’s ‘assessment of contingent liabilities’ contained in its 2022 financial report, according to an online news outlet, the bank admitted the “matter was considered a key audit matter due to the size of the potential liability.”
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The bank said no provision was made for the N1.49trn judgment liability. This is more than half of the lender’s N2.79trn total assets.
Union Bank said, “The Bank is involved in various legal actions in the ordinary course of business, which has resulted in contingent liabilities amounting to N1.497 trillion as of 31 December 2022 (2021: N1.98 trillion).
“The most significant is a case with a total claim of N1.495 trillion (2021: N1.54 trillion) in which judgment had been awarded against the Bank and other co-defendants by a Federal High Court in prior years.
The Bank appealed against the judgment, which is currently pending before the supreme court.”
Union Bank is also facing $15bn judgment debt awarded by a Federal High Court.
The court had in 2014 reportedly awarded the sum of £2.550 billion with 15 per cent interest yearly to Petro Union Oil and Gas Company Limited (Petro Union).
The case began in 1994 when Petro Union procured a cheque from a branch of Barclays Bank in the UK with a value of £2.556 billion and presented it at one of Union Bank’s branches in Lagos.
Petro Union claimed it planned to build refineries and establish a bank with the money.
Union Bank however took the cheque and purportedly refused to give Petro Union the money.
The bank said, “In the case of Petro Union, while the Bank’s appeal was pending before the Supreme Court, its application for leave to amend its notice of appeal, to appeal on grounds of mixed law and fact, and to extend the time to apply for leave was dismissed.
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“The Bank subsequently filed another application seeking Supreme Court leave to appeal the lower court judgment.
On 22 December 2021, the Supreme Court unanimously granted leave to the Bank to appeal the Court of Appeal judgment and to file its Notice of Appeal.
The Bank filed an appeal on 5th May 2022, but the Court is yet to fix a date for hearing after initial adjournment.”
All efforts to contact Union Bank for a response to the report met with a brick wall.
The bank’s internet telephone numbers did not go through, just as the bank’s WhatsApp contact automatically directed our correspondent to its customer service email address, which also failed on several attempts.
Seunmanuel Faleye is a brand and communications strategist. He is a covert writer and an overt creative head. He publishes Apple’s Bite International Magazine.
