Globus Bank in big mess over N170 Billion deal as Enugu Laywer threatens legal tussle.

Globus Bank is in big mess over N170 Billion deal as Enugu Laywer threatens legal tussle.

The Enugu state government recently requested the Enugu State House of Assembly to approve a loan of N170bn for capital projects which they have already approved.

But irked by the request, Osmond in the letter written to the banks captioned: “Re-demand for Immediate Suspension of the Proposed N120 billion loan sum for Enugu State Government as same offends the Enugu State Fiscal Responsibility Law 2018,” asked the banks to suspend the loans forthwith or risk legal action and a possible losing of such monies.

The legal practitioner posited that the loan far exceeded the borrowing limit open to a state government and as such should be declined.

“Take further notice that in an event that you fail to suspend the proposed loan for the above obvious reasons and proceed to lend the aforesaid loan sum which exceeds the total amount borrowable under the law, I shall not hesitate to set the law in motion against you without further notice to you and as such litigation may result in your bank losing the capital,” he intimates.

The petitioner made it clear that giving the loan to Enugu state government will run foul of the Enugu State Fiscal Responsibility Law of 2018 and for this reason, they should desist from acceeding to the loan request.

The letter reads in part this: “As a concerned son of Enugu State and a legal practitioner, I wish to write this letter and state as follows: that on the 9th day of October, 2023, the Enugu State House of Assembly approved the total loan sum of N170 bn in favour of Enugu state government from Nigeria financial institutions in which the sum of N50bn would be provided by your bank for prompt payment of recurrent expenditure.

“Admittedly, it is not anybody’s concern when a state government take up a loan but this narrative changes immediately such exercise runs violent and contrary to the laid down rules and practical procedure on borrowing. To this end, as a concerned citizen of the state, I am persuaded to write you having observed and discovered that the proposed loan facility if executed contract is some clear and express provision of the extra Enugu State laws on borrowing.

“Clearly, among the involved legal crisis as follows: that the amount proposed as loan stands taller and or better still, exceeds the maximum amount or benchmark authorised by the law.

“That the law forbids any borrowing for recurrent expenditures which houses and accommodates payment of salaries….”