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School sues Bank PHB over loan facility

By on March 22, 2011

A LAGOS-BASED school, The White Dove School, has instituted a case against Bank PHB before a Lagos High Court sitting in Igbosere over an alleged uncoordinated and unprofessional handling of N280 million loan facility the school borrowed from the bank.

The suit was filed by the school lawyer, Mr. Abiodun Idowu, who averred that Bank PHB offered a N280 million loan facility to the school for the completion of the first phase of it expansion programme situated at Sango-tedo, Lekki.

In the statement of claim, the school alleged that amongst the terms contained in the offer letter, which forms the basis of the loan contract was that the applicable interest rate shall be 17 per cent per annum but the bank failed, refused and neglected to apply the mutually agreed rate of interest of 17 per cent per year, but went ahead to arbitrarily charged and applied interest which at various times were as high as 19 per cent per annum, without the knowledge and consent of the school and worse still, without communicating such applicable interest rates to the school, as the bank was expected to do.

The claimant is, however, praying for an order of the court to appoint independent auditors/chartered accountants to thoroughly and comprehensively investigate all transactions that have taken place on the account of the first claimant with the defendants since the inception of the facility with a view to determining the issues raised.

Source : Guardian