The Lagos Division of the Federal High Court has ordered the freezing of accounts linked to Western Metal Products Company (WEMPCO) Limited across 27 commercial banks and fintech firms over an alleged ₦61.45 billion debt owed to United Bank for Africa (UBA) Plc.
KeepLoss reports that on the April 2 ruling, Justice Akintayo Aluko granted UBA an interim order appointing Romeo Ese Michael, Esq., as receiver-manager over WEMPCO’s unencumbered assets, including two Wärtsilä power generators.
Mr Aluko also ordered banks and fintechs to disclose to the court and UBA any funds belonging to WEMPCO and its affiliated entities.
The judge issued a stern Form 48 (notice of consequence of disobedience to order of court), warning that the company’s key executives could face imprisonment for contempt of court after allegedly interfering with the receiver-manager’s operations in the debt recovery case.
The company’s directors and shareholders who could face committal proceedings for contempt are Lewis Shui Ngor Tung, Phillip Shui Che Tung, Ola Yusuf, Tung Lawrence Blake, Alli Aare Hadji Tokunbo, Paul Shui Po Tung, Tung Robert, Cl Ip, and Taiwo Alli, according to a report published on Tuesday by Moneycentral.
The legal action stems from a multicurrency multiple credit facility agreement executed on September 30, 2019, under which UBA alleges WEMPCO and 16 affiliated companies—including Nigerian Enamelware Company Plc, Lagos Oriental Hotel Limited and Prime Nigeria Wood Products Co. Ltd.—owe ₦61.45 billion.
According to the report, the credit facility was executed when WEMPCO was completing major steel and power infrastructure investments.
While Mr Alli is the managing director and chief executive officer of the NGX-listed Nigerian Enamelware Company Plc, Robert Tung is a non-executive director of the company and one of the two brothers who built WEMPCO.
WEMPCO, one of Nigeria’s largest manufacturing conglomerates, was founded in 1954 by the late K.F. Tung and has between 12,000 and 13,000 workers across its subsidiaries, including Lagos Oriental Hotel.
However, it has been reported that the company has faced tax defaults, rising energy costs, and foreign exchange shortages in the past decade, resulting in increased debt amounting to billions of naira.