How ABC Orjiako and Related Company Indebtedness Crippled Diamond Bank
There are indications that unsafe and unsound practices of the Chairman of SEPLAT Petroleum Development Company Plc, Ambrosie Bryant Chukwueloka (ABC) Orjiako contributed to the financial crisis that bedeviled erstwhile Diamond Bank before its ultimate merger with Access Bank Plc.
Orjiako, SEPLAT and one of its associated companies, Cardinal Drilling Services Limited are currently entangled in a legal battle with Access Bank which led to last week’s sealing of the Corporate Headquarters of the company at No. 16A Temple Road, Ikoyi, Lagos by Access Bank’s appointed Receiver/Manager, Kunle Ogunba & Associates.
SEPLAT’s Corporate Headquarters was sealed in execution of an ex parte interim Court Order dated 13th November 2020, which was obtained by Access Bank Plc in connection with its Facility to Cardinal Drilling Services.
Investigations revealed that in 2012, Cardinal Drilling Services Limited obtained a facility from Diamond Bank (now Access Bank) to purchase the CDS Rigs 101, 201, 202 and 203. The Facility was secured by a fixed and floating Debenture over Cardinal’s assets (the “Debenture”). The Cardinal Rigs were used to provide drilling services to SEPLAT. In particular, CDS 101 and 201 were used to execute SEPLAT’s 2019 work programme and all 4 Rigs were critical to SEPLAT’s future drilling plans.
Overtime, Cardinal Drilling was unable to service the outstanding part of the facility, which Access Bank show to be an outstanding amount of $85.8 million.
Although, SEPLAT has consistently denied being a party to the facility obtained by Cardinal Drilling and did not provide any guarantees or indemnities on behalf of the company, informed sources said these are some of the intrigues usually thrown up by the Chairman, ABC Orjiako, after taking bank loans and refused to pay.
Access Bank in its court filing is insisting that there is inter-company relationship between SEPLAT and Cardinal Drilling, noting that they are jointly promoted by Orjiako. According to the Bank, “SEPLAT is a sister company to Cardinal, jointly promoted by Orjiako who is the alter ego of the two companies.” Also joined in the suit filed by Access Bank is Kalu Nwosu, who is said to have issued a personal guarantee and a statement of personal net worth as security to the facilities availed to SEPLAT.
The Bank noted that SEPLAT has solely enjoyed all the benefits of the facilities granted Cardinal Drilling to its advantage and wholly for the promotion and advancement of its businesses. According to the Bank, SEPLAT is in fact the ‘real debtor’ while Cardinal is merely a ‘vehicle smokescreen’ for the purposes of the subtle obtainment of credit facilities by SEPLAT.
It was learnt that SEPLAT is supposed to be a separate entity but has been compromised through the activities of its Chairman. In some instances, agreements are alleged to have been doctored while legal means are deployed to prevent banks from getting title documents used as guarantees for credit facilities. This in part, constituted to the loan problems with the defunct Diamond Bank.
According to court documents filed by Access Bank, Clause 6 of the Deed of Debenture allows the Bank to appoint a Receiver/Manager over Cardinal’s assets, if Cardinal fails to liquidate the Facility. On 12th October 2020, Access Bank appointed Kunle Ogunba & Associates to act as the Receiver/Manager.
Access Bank asked the Court to validate the appointment of Kunle Ogunba & Associates as the Receiver/Manager; validate the Receiver/Manager’s authority to take possession of the 4 Cardinal Rigs and other assets of persons and companies presumably connected to Cardinal drilling; restrain all Defendants from disposing or dealing with the Assets; declare that the Defendants have no right to enter into, or deal with, any of the Assets.
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