Courts grants sale of SIC assets …but it seeks suspension of judgement
The Court of Appeal, last week, granted Ivory Finance, now known as CDH Savings and Loans, levy of execution and the right to sell off assets of SIC Insurance, to retrieve more than GH¢500million of debt.
The partly state-owned insurance company, however, filed an application, immediately, to seek suspension of the enforcement of judgement, which will now be heard on 11th January, 2017, thus placing a restraining order on Ivory Finance from going into execution.
The facts of the case are that on April 10, 2013, Italconstruct International, a construction firm, procured a credit facility of GH¢14million from Ivory Finance, with SIC as its guarantor.
The loan was payable in six months at a rate of 5.5percent per month, with an additional agreed penal interest rate of 8percent per month on any outstanding amount, until the credit had been totally repaid.ButItalconstruct defaulted, thereby saddling its guarantor – SIC – with the debt, which has since been piling up.
In 2014, the parties agreed to a consent judgement to settle the matter out of court, with SIC’s Former Managing Director, Doris Awo Nkani, signing for her side.
After she was asked to proceed on leave in January 2015, however, lawyers of SIC filed a suit at an Accra high court that the consent judgement be set aside, on thegrounds of fraud, conspiracy, and collusion among all defendants – Ivory Finance, Italconstruct, and SIC’s former MD, Doris Nkani.
But SIC’s case was thrown out by the High Court, and so it proceeded to the Court of Appeal, which has now ruled that SIC’s actions were “frivolous, vexatious,” and abuse of the court’s process, slapping the company with a fine of GH¢15,000.
The Court of Appeal, presided over by Justice S.E Kanyoke, upheld that Ivory Finance is now at liberty to go into execution and to sell off assets belonging to SIC Insurance to defray its debt.
SIC Insurance Company, which had been advised against the issuance of credit guarantees, issued a six-month tenor guarantee bond, valued at GH¢19.3 million which allowed Italconstruct International, which had won a government bid to construct some housing units in parts of the country, to secure a credit line from Ivory Finance Company Ltd.
But due to payment delays on the part of government, Italconstruct could not make good its commitments to Ivory Finance, leading to a long-drawn battle in the courts.
On September 30, 2013, Ivory Finance sent a demand notice to the loan defaulter and the guarantor, requesting that they pay the debt, which at the time was estimated at an odd GH¢18.96 million.
Last year, an Accra High Court ordered SIC to pay off the initial loan with interest and since then SIC has paid a little over GH¢19.3million to Ivory Finance Company, being the face value of the credit guarantee bond issued by SIC.
The rest of the amount, which now runs in excess of GH¢500million, according Ivory Finance, has since become a bone of contention in the law courts among the parties.
Last year, due to SIC’s inability to pay off the debt, Ivory Finance, after being granted levy of execution by an Accra Commercial High Court, seized the insurance company’s assets, including 15 vehicles and several other landed properties.
But SIC, which is a publicly listed company, with the state having 40% stake and total assets amounting to GH¢186.6million, appealed the judgement, and the assets were released after its lawyers pleaded that without the vehicles, the company’s operations would grind to a halt.