Heritage Bank ordered to shut down over failure to pay over N710 million debt

The National Industry Court situated in Makurdi, Benue State, has issued a garnishee order, instructing the closure of Heritage Bank

The order comes as the bank has disobeyed an order directing it to pay the claimants a sum exceeding N710 million
Amid the concerns by customers, the bank insists it is in a good financial state

The National Industry Court situated in Makurdi, Benue State, has issued a garnishee order, instructing the closure of Heritage Bank Limited. This action comes as a result of the bank’s failure to remit an amount exceeding N710 million to Shehu Mudi and 656 other entities.

The Court has maintained its stance that the bank’s branches must remain shuttered until it fully adheres to the directives outlined in the garnishee order.

Additionally, included in the lawsuit are the Adamawa State government, the Ministry of Education in Adamawa State, the Post-Primary School Management Board in Adamawa State, as well as the Attorney General and Commissioner for Justice in Adamawa State.

Recently, Legit.ng reported that the Central Bank of Nigeria (CBN) granted its approval for the appointment of Akinola George-Taylor to assume the role of the incoming Managing Director and Chief Executive Officer of Heritage Bank.

Judge orders closure of Heritage Bank

As stated in Lawsuit Number MCN/MKD/07m/202, the Presiding Judge, Justice (Dr.) I.J. Essien, has instructed Inspector General of Police Olukayode Egbetokun to ensure police security for the Court’s Sheriffs in executing the Court’s directive.

According to The SUN, Justice Essien emphasized that the garnishee entity (Heritage Bank) had become an obstruction to the due process of justice.

The judge said that while considering the exhibits and arguments, he recalls the court made an Order Absolute in Exhibit A, which stipulated that the Garnishee should remit the Judgment amount being sought through this application within a span of 3 days.

He said this specific directive was further validated by the Court of Appeal and confirmed in Exhibit D, which is contained within its ruling documented as Appeal Number CA(MK/26/2022).

He added that within this judgment, the Garnishee was explicitly instructed to fulfill the Judgment debt within a 3-day period.

Regrettably, despite the multiple orders that have been issued by both this Court and the Court of Appeal, the Garnishee has continued to blatantly disregard the mandate laid out by this Court’s Order.

The judge ruled:

Further to this, despite the Garnishee undertaking to pay the Judgement sum to the anywhere located in Nigeria until the Garnishee (Heritage Bank PLC), comply with the Order of the Court of Appeal directing it to pay to the judgement creditor the sum of N710,969,140.19 which is made up of the judgement sum and interest accrued from 14/12/2021 to December 2022 which sum has been set side by the garnishee and party represented by the bond entered into at the Court of Appeal by the garnishee.

Heritage bank reassures customers as concerns mount
Amid growing concerns voiced by the bank’s customers regarding Heritage Bank’s financial stability, the bank itself has asserted that everything is in order.

In a recent communication issued by Ozena Utulu, the Corporate Communication Manager, Heritage Bank revealed that it has initiated comprehensive plans aimed at ensuring the bank’s long-term viability.

According to TrackNews the statement also acknowledged recent reports indicating a reduction in the bank’s workforce, clarifying that the affected employees have been appropriately compensated for their transition.

The rumors surrounding Heritage Bank’s financial health have persisted over the years. In response to these concerns, the Central Bank of Nigeria (CBN) previously reassured the Nigerian public that the bank was not undergoing financial distress.

During its most recent Monetary Policy Committee meeting held in July, the central bank emphasized that key financial indicators were relatively stable and underscored the resilience demonstrated by Nigerian banks.