Banks fight for Stallion Group’s assets, as fears of bankruptcy mount

By AYOOLA OLAOLUWA

Deposit Money Banks (DMBs) operating in the country are currently battling among themselves to take over assets of struggling business behemoth, Stallion Group, in a bid to recover huge loans they had advanced to the firm, Business Hallmark can report.

The moves came as Stallion Group, a diversified conglomerate, faces uncertain future over mounting debts and litigations.

Before it ran into troubled waters in 2015, the company, founded by controversial Indian businessman, Sunil Vaswani, dominated the nation’s business space like a colossus, having huge interests in commodities, agriculture, automobile assembly, automobile distributorship, food products, industries, FMCG, mining, steel manufacturing, real estate, financial services, plastics, packaging, technology, logistics and shipping.

While its Stallion branded rice used to be the market leader, the Group had an exclusive portfolio of global auto brands including Honda, Hyundai, Nissan, Porsche, Volkswagen, Audi, Skoda, Foton, Jinbei, BAIC, Changan, Ashok Leyland and IVECO.

Aside these flourishing businesses, Stallion Group also operates multiple automobiles assembly facilities. For instance, it is involved in the local assembly of Nissan, Hyundai, Ashok Leyland, Iveco and Volkswagen branded vehicles.

Sunil Vaswani and his two brothers, who are executives in Stallion, Haresh and Mahesh, BH learnt, had capitalized on their close ties to successive Peoples Democratic Party (PDP) administrations since the advent of democracy in 1999 to feather their own nest.

Though BH could not independently verified the claim, the Vaswani brothers, it was learnt, were one of the major sponsors of the elections that brought former Presidents Olusegun Obasanjo, Musa Y’aradua and Goodluck Jonathan to power.

Expectedly, the trio got their reward as successive PDP governments, sources claimed, ensured they reaped the benefits of their support, especially through concessions that were widely criticized.

But as the popular saying: “nothing lasts forever” says, the party lasted for only 16 years.

According to sources in the troubled company, its travails started immediately after the PDP administrations of former President Goodluck Jonathan lost the 2015 presidential election to former President Muhammadu Buhari.

Immediately he assumed office on May 29, 2015, Buhari, the sources disclosed, moved against Stallion Group, by unleashing anti-corruption agencies like the Economic and Financial Crimes Commission (EFCC), Department of State Security (DSS) against it.

“We (Stallion Group) are in this precarious situation because of Buhari’s vindictive nature. Yes, the company and its promoters, no doubt, are not saints like many other companies and individuals doing business in Nigeria, but the way and manner we were constantly harangued and singled out for punishment suggest vendetta”, a Nigerian in the company told our correspondent.

BH checks revealed that between September 2015 and June 2020, Stallion Group was always in the news for the wrong reasons.

For instance, the EFCC investigated top officials of the company over their shady dealings with the Federal Inland Revenue Service (FIRS), the Nigerian Customs Service (NCS), states agencies and financial institutions.

In 2018, Stallion Motors Limited and its Chief Executive Officer (CEO), Hapreet Singh, were dragged to court by the EFCC for allegedly giving the PDP N1.275 billion to finance the 2015 elections.

Owing to the constant harassments by security agencies, Stallion’s big shots ran to court in November 2019 to secure a fundamental human rights order against the police, EFCC and the Department of State Security (DSS).

Unfortunately, the constant onslaught on Stallion’s businesses and directors, BH gathered, disrupted its businesses, leading to reduced activities and massive downsizing of its workforce.

One of the group’s businesses that went South is the contract by the Federal Government to Stallion Motors to supply 700 Ashok Leyland trucks/Stallion troop-carrying vehicles and 50 Falcon seater buses to be used by the military.

The contract was financed by United Bank for Africa (UBA) Plc through a credit line the bank gave Stallion Nigeria Limited, with the understanding of the parties that the receivables from the Federal Government would be paid into Stallion Account with UBA.

Meanwhile, the conglomerate is currently facing the biggest challenge in its corporate existence as several commercial banks, sensing its precarious financial situation, are moving in to liquidate its assets over mounting unpaid debts.

On November 17, one of its lenders, UBA Plc, took over the assets of Stallion Nigeria Limited and its subsidiaries in Lagos, Port Harcourt, and Kano following an order of the Federal High Court, Lagos, over an alleged N156billion debt.

This comes after Justice Akintayo Aluko of the Federal High Court, Lagos had granted the interim order on October 20, 2023, for the possession of the properties.

Justice Aluko had granted the order after hearing the counsel for UBA, Mr. Temilolu Adamolekun and Mohammed Usman moved an motion ex-parte, which was supported by an affidavit in support deposed to by Mr. Anthony Chilaka, in the suit marked FHC/L/CS8/2074/2023.

In his ruling, Justice Aluko gave an order protecting the receivermanager, Romeo Michael appointed by UBA PLC “to take over the exclusive possession of the mortgaged property known as all that piece or parcel of land together with any building thereon at Plot 371, Trans Amadi Industrial Layout, Port Harcourt, Rivers State.

“Plot 353, Trans Amadi Industrial Layout, Port Harcourt, Rivers State, Plot 370, Trans Amadi Industrial Layout, Port Harcourt, Rivers state, KM17, Lagos Badagry Expressway, Lagos State and No. 54, Challawa Industrial Estate, Kano State, Nigeria”.

The order also affects the defendants’ sums totaling N156billion in commercial, microfinance, and other financial institutions across the country.

Stallion Group’s and its subsidiaries under receivership are Stallion Nigeria Ltd., Von Automobile Nigeria Limited, Popular Farms and Mills Limited, Havana Nigeria Limited, KRBL Food Industries Limited, Qingqi Motorcycle Manufacturing Limited, Stallion Auto Keke Limited, Stallion Motors Limited, The Honda Place Limited, Yokohama Construction Limited and the embattled Sunil Vaswani himself.

UBA listed all the commercial banks in Nigeria, Kuda Microfinance Bank, Moneypoint Microfinance Bank, Piggyvest technology Limited, Cowrywise Financial Technology Limited, Opay Digital Services, the Federal Ministry Of Defence and Federal Ministry Of Finance as the 12th to 43rd respondents in a Mareva Order to protect the Res of the suit.

The court granted an interim injunction restraining the defendants, respondents (other banks) or anyone else, from tampering with, remaining in, selling, leasing, or dealing in whatsoever manner with any of the defendants’ assets/mortgaged properties covered by the order.

Apart from UBA, Stallion Group is also fighting a seemingly futile battle to prevent its assets from being taken over by commercial banks it got loan facilities from.

In February 2023, Guaranty Trust Bank (GTB) took possession of assets belonging to the Group and its subsidiaries in Lagos through Temilolu Adamolekun, the receiver/manager appointed by the bank.

The takeover of the assets followed a N13 billion judgement debt in suit FHC/L/CS/2/47/2019 filed at a Federal High Court sitting in Lagos.

On Wednesday, February 1, 2023, officials from Adamolekun’s office and court bailiffs stormed Stallion’s Victoria Island office and showroom housing several exotic automobiles.

Apart from taking over the property, they also recovered vehicles in the premises, including Porsche, Audi, Bentley, Skoda, Hyundai and Volkswagen.

In the same vein, Zenith Bank Plc has dragged Sunil Vaswani and Stallion Group before an Igbosere High Court of Lagos State, over alleged unpaid N23,388,188,756.049 billion debt.

In the suit marked LD/3945GCMW/2020, Zenith Bank noted that it filed the suit due to Stallion’s refusal to pay the alleged debt despite several and repeated demands.

Zenith Bank Plc is asking the court for an order entering judgments in its favour against Vaswani, being his outstanding indebtedness on account of the guarantee given in respect of various sum advanced to Stallion Nigerian Limited, which has remained unpaid as at May 12, 2020 in spite of repeated demands and interest at the rate awarded by the court from the date of judgment until final liquidation

Accordingly, Zenith Bank claimed it is entitled at law to all the rights attached to Vaswani’s assets, landed properties and other forms of real estates no matter wherever located within the Federal Republic of Nigeria, the United States of America and the United Arab Emirates (UAE).

A source in one of the nation’s financial institutions confided in our correspondent that apart from GTBank, UBA and Zenith Bank, several other banks owed billions of naira are also going for Stallion’s jugular.

“Stallion’s troubles have sparked fears among banks about its state of health. This prompted their rush to salvage whatever they can get from the firm’s visible assets.

“We acted to protect depositors funds”, said a top officials in one of the affected banks.

Our correspondent also gathered that banks will soon be on collision course over their moves to take over Stallion’s Groups properties in order to recover outstanding debts.

According to a source in a second generation bank, the Vaswani brothers had used the same assets to secure loans from multiple banks.

“If you go through Zenith Bank’s prayers in the suit it instituted at the Igbosere High Court marked LD/3945GCMW/2020 very well, it joined all commercial banks, microfinance banks and other parties as respondents, praying the court to restrain them from tampering with, remaining in, selling, leasing, or dealing in whatsoever manner with any of the defendants’ assets/mortgaged properties covered by the order.

“No doubt, we are going to soon witness fireworks as banks and concerned parties working to recover their trapped funds grapple among themselves on who gets what”, the official stated.

Efforts to get the reaction of Stallion Group’s failed as all messages sent to its were not acknowledged.