‘It’s fraud,’ court rules as Union Bank sells deceased customer’s Ikoyi property below value over N4 million loan

The Lagos Division of the High Court ruled that Union Bank’s sale of a deceased customer’s luxury property in Ikoyi over a N4 million loan “sparks of fraud, collusion and definitely does not show good faith.”

Justice I.O Harrison, who delivered the judgement, ruled that Union Bank “acted recklessly” in selling Adedoyin Ogunde’s multi-building property sitting in the posh neighbourhood of Ikoyi after he died in 1997 before he could complete the N4 million loan repayment.

Mr Ogunde, a former KPMG partner, had approached Union Bank for a loan in 1995, using his property which had four giant buildings at Ikoyi, Lagos state to secure the loan.

Following his demise in 1997 and monthslong gap of leaving the loan unserviced, the bank swung into action to seize his landed property at 6A Moore road, Ikoyi now, 6, Gbolahan Mudashiru road.

Union Bank rejected the bereaved family’s request for time to repay the loan which had already accrued millions of interest, bringing the total loan to N7 million.

The financial institution insisted that the property be sold and opted for private treaty using Shade Ogundare & Co law firm to handle the sale in 1999.

Ms Ogundare, according to the claimants, failed to do due diligence in valuing the property before selling it off.

Mr Ogunde’s family further asked the bank to sell only one building to recover the loan given that the property spanned 2.2 acres and had four giant buildings including eight sections of four bedroom flats, a penthouse, a five bedroom flat and a boys quarters of eight rooms.

Again, Union Bank declined the request on the grounds that the property had a single title and could only be sold as a whole, a claim that the Court said “does not hold water,” as the bank fraudulently partitioned the property into four parts, 6A, 6B, 6C and 6D.

“The fact that a property was mortgaged as a single entity and will have to be sold as such in a bid to realise a debt does not hold water, it sparks of fraud, collusion and definitely does not show good faith,” Ms Harrision said on May 31.

Plot 6A, the largest of all the buildings, was sold to one Cletus Ibeto of Nnewi in Anambra state for N30 million. Plot 6A comprised nine luxury flats of eight units of four bedroom flats, a five bedroom penthouse and eight rooms boys quarters.

Mr Ogunde’s family accused Union Bank of collusion in that another buyer, Minaj Group, offered 50 million for Plot 6A but that the bank rejected the higher bid to favour Mr Ibeto’s N30 million offer.

Despite realising the N7 million loan from the sale of Plot 6A, Union Bank proceeded to sell the other plots to different buyers, a move that ran afoul of their previous claim that the property had a single title and could only be sold as a whole.

6B was sold to one Segun Wright for N7 million, 6C for 13 million to Mr Osundina and 6D for N10 million to one Unigate Investments company. Despite selling the property in 1999, the payment took years to complete as the so-called buyers paid in installments, the claimants said.

The Court adjudged fraudulent the fact that Union Bank still proceeded to sell the other buildings despite recovering the N7 million loan and interests from Plot 6A’s N30 million sale sale.

“The Court cannot comprehend why the 6th Defendant went ahead after the sale of Plot 6A for N30,000,000.00 (Thirty Million Naira) (wherein it had realised its debt, interest and costs and there was still a balance ensuing to the deceased estate) it still went ahead to sell Plot 6B, 6C and 6D obviously the intention was not to realise any outstanding indebtedness as none existed at that point. The Court cannot help but find that the 6th Defendant acted recklessly and in bad faith.”

Union Bank denied selling the property to separate buyers but failed to produce proof.

The financial institution brazenly disregarded two court orders to submit bank statements for Mr Ogunde’s estate account: 0691030015670 to show if money inflows for the property came from one buyer or multiple buyers.

“The Court finds that the said evidence was withheld as it would have impacted negatively on the 6th Defendant (Union Bank).”

The Court determined that Union Bank deliberately withheld Mr Ogunde’s bank statement to hide the true price at which the property in the posh Ikoyi neighbourhood was sold.

Having examined the matter, Ms Harrison deemed the property was sold at a gross undervalue “in light of market research surveys carried out” on similar properties.

Consequently, she awarded N112 million against Union Bank and interest from 1998 till date of judgement (May 31) at the prevailing CBN rate.

“The court awards the sum of N112,050,000.00, excluding the N60,000,000.00 (Sixty Million Naira) already paid, being the difference in what should have been realised from the sale of the property known as No. 6 Moore Road, Ikoyi, Lagos, and interest on the said balance from 1998 until today (the date of judgement) at the prevailing CBN rate, and thereafter from the date of judgement until the judgement debt is fully liquidated at the rate of 10% per annum,” Ms Harrison wrote in her judgement.