Ex-Attorney General threatens legal action against Polaris Bank over N868m loan

Former Attorney-General of Imo State, Chukwuma-Machukwu Ume, SAN, has issued a legal threat against Polaris Bank, accusing the financial institution of unlawfully withholding a loan facility worth N868 million belonging to his client, Kenchez Nigeria Limited.

In a letter addressed to the bank’s Managing Director, Ume also demanded a refund of N16,206,860.66, which he said represented the first month’s interest already paid by Kenchez Nigeria Limited to Lecon Finance Company Limited.

According to the senior lawyer, the sum in question was tied to a loan obtained from Lecon Finance Company to purchase a 160-ton Terex Demag AC160-2 Crane for the company’s operations. He claimed the funds were disbursed to Polaris Bank, which served as guarantor, but were never released to his client despite meeting all stipulated conditions, including securing a legal mortgage on a property in Port Harcourt.

“This is after several demand letters by the company requesting for the utilisation of the guaranteed funds or a refund of same to Lecon Finance Company Limited have not been acted upon by the bank,” Ume stated in the letter.

The letter, dated September 15 and received by Polaris Bank on September 17, was made available to journalists in Abuja on Thursday. Ume warned that he would escalate the matter to the Central Bank of Nigeria (CBN), the National Deposit Insurance Corporation (NDIC), and other regulatory bodies over what he described as financial misconduct.

The Senior Advocate further argued that the bank’s decision to withhold the funds contravened Section 13 of the Banks and Other Financial Institutions Act (BOFIA) 2020, which compels banks to adhere to sound banking practices.

He also alleged that Polaris Bank’s conduct amounted to a breach of the CBN Consumer Protection Regulations, 2019, which emphasises fairness, transparency, and good faith in dealing with customers.

In addition, Ume claimed the bank’s action violated Section 7 of the Money Laundering Act and Section 34 of the EFCC Act, insisting that “it cannot unilaterally freeze his client’s account or prevent it access to its account outside the rule of law.”