Court Grants GTBank Permission to Seize Afex Over N17.8 Billion Anchor Borrowers’ Loan

The Federal High Court in Lagos has authorized Guaranty Trust Bank (GTBank) to temporarily seize the assets and funds of Afex Commodities Exchange due to a N17.808 billion debt under the Central Bank of Nigeria’s Anchor Borrowers’ Loan program.

Justice Chukwujekwu Aneke granted GTBank an interim Global Standing Instruction (GSI) injunction following the bank’s application on May 27, 2024. This legal move allows GTBank to access Afex’s accounts across 27 commercial and money deposit banks to recover the debt.

The N17.808 billion includes N15.766 billion in outstanding loan facilities and accrued interest as of April 17, 2024. It also covers pre-judgement interest at 28% per annum from April 18, 2024, post-judgement interest, and recovery costs amounting to N2.041 billion.

GTBank, the sole plaintiff in the case, stated through a 285-page affidavit that the loan was intended to finance smallholder farmers under the CBN Anchor Borrower’s program, with repayment expected from the sale of maize by April 22, 2021. However, Afex allegedly failed to meet this obligation.

The court’s GSI injunction allows GTBank to recover its debt from any of Afex’s accounts held with other financial institutions. Previously, defaulting borrowers could maintain their bank balances in other institutions despite having sufficient funds to repay their debts.

Justice Aneke’s order places a “No Debit” restriction on all funds in Afex’s accounts across the 1st to 28th respondent banks and mandates the transfer of these funds to Afex’s GTBank account until the debt is cleared. The debtor is also required to provide a current statement of account to the court and GTBank’s lawyers within seven days of the order.

The case is adjourned until June 10, 2024, for further hearing.