Guaranty Trust Bank (GTBank) has initiated legal proceedings against 60 top executives from 13 commercial banks, including chairmen, CEOs, directors, and company secretaries. The move comes amid a dispute with AFEX Commodity Exchange over a N17 billion loan under the Anchor Borrowers Programme.
The Federal High Court in Lagos, presided over by Justice CJ Aneke, authorized contempt proceedings against the executives for allegedly disregarding a No-Debit-Order placed on AFEX's accounts. This order was issued following GTBank's efforts to recover outstanding debts from AFEX, including costs of recovery and incidental expenses amounting to N2.04 billion.
In response to the court's ruling on May 27, 2024, which directed 20 banks to transfer funds from AFEX's accounts to GTBank until the debt is repaid, tensions have escalated. The court also granted GTBank permission to seize AFEX's 16 warehouses across seven states, which were allegedly funded with the Central Bank of Nigeria's loan facility.
AFEX, however, claims to have repaid approximately 90% of the loan and blames economic challenges for the outstanding amount owed by farmers. The commodities exchange has urged the Central Bank of Nigeria to activate the collateral guarantee clause of up to 70%, highlighting ongoing discussions to resolve the issue without further punitive measures against struggling farmers.
The Anchor Borrowers Programme, launched in 2015 by the CBN, aimed to bolster agricultural output and stabilize food prices by linking smallholder farmers with processors. Despite its initial successes, the programme has faced challenges, leading to its discontinuation as the CBN shifts focus towards monetary stability.
