A limited liability company, Vulcan Elvaton Limited and its two directors, Mr Franklin Ngbor and Elvis Afam, have been dragged before a Federal High Court sitting in Lagos south west Nigeria by Asset Management Corporation of Nigeria AMCON. It is seeking judgement in the sum of $11.45 million (N1.7 billion), N50million and the cost of the suit in the sum of N10 million on the ground of alleged failed Sokoto state independent power project contract.
In a statement of claim filed before the court by Professor of intellectual property, Bankole Sodipo, it was alleged that Vulcan Elvaton obtained Various loan facilities in the sum of $11.45 million (N1.7 billion) and another N50 million from a commercial bank which AMCON has since taken over for recovery.
The purpose of the loan was to bridge the financing requirement for the purchase and shipment of a 37.5MW General Electric Frame 6B Turbine Generator and ancillary Equipment from Technical Assets Power Management Group, Arizona, United States of America for Sokoto State Independent Power Project.
The source of repayment of the loan was to be from the proceeds of contract for the provision, installation and maintenance of Sokoto State Government Independent Power Plant.
The security for the loan include the following: The guarantee of First bank Plc for the payment of the total sum of N1.8 billion which was not paid by First Bank. Corporate guarantee of Vulcan Elvaton Limited ‘s parent company, Vulcan Capital international. Other guarantees include full and unconditional personal guarantee of Franklin Ngbor and Elvis Afam who are the Directors of the company for the full facility amount and the accrued interest charged as contained in the guarantee clause.
However, First Bank refused to pay the sum it guaranteed in the sum of N1.8billion on the purported ground that its guarantee was for a specific time which had elapsed. The bank also discovered that in violation of the terms of the loan, Vulcan Elvaton did not supply all the goods it was paid to supply, hence, the refusal of the bank to honour the guarantee.
It was alleged further that the company never supplied the Turbine GE 6B to Sokoto State Government and the company’s sister company in the United States of America, Vulcan Energy International, LLC litigated against their agents, Technical Assets Power Management Group in the Harris County, Texas and obtained an order to enforce settlement agreement and final judgment.
The two Directors of Vulcan Elvaton agreed to be personally responsible for the financial obligation of the company in the event that the company failed to pay the loan agreement with a clause for their personal guarantees. AMCON alleged that the loans were diverted to other uses by the defendants.
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