News,Entertainment, Lifestyle, Trend, Fashion, Inspiration and yes... Gossip! *Wink*
PUBLICATION - Innoson Vehicles sues Imo State Government over N2.5 billion debt
Foremost Nigerian Indigenous motor manufacturing company, Innoson Vehicles
Manufacturing (IVM) has sued the Imo State Government under the leadership of Governor Hope Uzodinma, for N2.5 billion.
The lawsuit by the auto firm is over the failure of the Imo State Government to pay or service the debt of N2,547,666,435 being the purchase price of the various IVM Vehicles including their parts which IVM manufactured, sold and delivered to the State Government but Imo State Governor or its government has refused and failed to pay same despite repeated demands and appeals.
This disclosure is contained in a press release issued by the Head of Corporate Communications and Affairs of IVM Innoson Group, Cornel Osigwe, on Friday, July 29, 2022.
Osigwe in the statement said that the lawsuit which was filed by Prof Joseph N Mbadugha, SAN, FCPA of McCarthy Mbadugha & Co, the counsel to Innoson Vehicles, is coming against repeated attempts made by the Chairman of Innoson Vehicles Manufacturing, Chief Dr. Innocent Chukwuma OFR, to the Governor urging him to pay the company on the vehicles sold, and delivered to the State Government.
How the debts were incurred
It stated that sometime in April 2021, His Excellency, the Executive Governor of Imo State, Senator Hope Uzodinma invited the Chairman/CEO of Innoson Vehicles, Chief Dr. Innocent Chukwuma to the Imo State Government House, Owerri where they discussed and agreed that Innoson Vehicles would sell and supply various specifications of its brand of Vehicles to the State Government. The vehicles supplied included;
’70 units of Innoson 5 Seater double cabin pick-up (IVM Carrier) 4WD, 10 units of Innoson 5- Seater double cabin military pick up (IVM G12), 10 units of Innoson 5 seater single cabin military pick-up (IVM G12).
‘’Others are 100 units of a complete siren with public addressing system, revolving light, and street police light, 2 Units of IVM Ambulance Vehicles, 20 Units of IVM G12 MS11 7. 20 sets of B. Canopy.’’
Osigwe said that IVM reached an agreement with the Imo State Government that the payment for the vehicles would be made after deliveries, an agreement that was later reneged by the state government.
The statement added, ‘’The above vehicles which were valued at over N2.5 billion ($6.3M) were supplied in good faith to the Imo State Government based on an understanding with the Governor which arose after a special request that Innoson Vehicles grant the State the favour of paying for the vehicles after deliveries to them and which request was granted and honoured.
‘’The special and privilege request granted to the Governor turned into a nightmare for Innoson Vehicles and Its Chairman after Chief Chukwuma had at various times through several visits, phone calls, messages, and submission of letters requesting payment appealed to the Governor and his conscience to make total payments or set up a payment plan that will offset the debt.’’
IVM unable to meet loan repayment obligations, claiming interest on debt
IVM said that the inability of Imo State Government to meet up with its debt obligation to it has resulted in its having difficulties in fulfilling its loan obligations to some banks, adding that even the value of the expected payment has depreciated significantly due to a reduction in the value of the naira.
It stated, ‘’The inability of the State Government to pay the aforesaid purchase price of the vehicles supplied has resulted in Innoson Vehicles having difficulties in fulfilling its loan repayment obligations to Keystone Bank Limited and Bank of Industry.
‘’These Banks granted their credit facilities at the rate of 10% interest and other fees therein. More so, it has led to the loss of profit arising therefrom and the accruing interest.
‘’It is also interesting to note that as of July 27th, 2022, the over N2.5 billion worth of vehicles supplied to Imo State Government in April 2021 under the leadership of Hope Uzodinma with a dollar value of $6.3 million is now worth $3.8 million.
‘’Even if the money is paid today, the value of the money has depreciated by over 40%. It is therefore based on this premise that Innoson Vehicle Manufacturing Company Ltd has begun the process of recovering its debts against the Imo State Government by slamming a lawsuit of over N2.5 billion with an interest rate of 10% on the entirety of the sum claimed at the High Court of Anambra State, Nnewi Division.’’
What you should know
Innoson Vehicle Manufacturing Company Limited. (Commonly shortened to IVM) is a Nigerian automobile manufacturer headquartered in Nnewi, Anambra State and was founded by Chief Innocent Chukwuma Nwala.
Innoson Vehicle Manufacturing is regarded as the largest indigenous automobile manufacturing firm and produces 70% of the car parts locally, while the rest is sourced from Japan, China, and Germany.
This is not the first time that Innoson Vehicle is involved in a major legal battle with a major institution.
Innoson had been involved in a legal battle with GTB since 2011 over claims and counterclaims of loans between the vehicle manufacturing company and the bank over a N2.4 billion judgement and a 22% accrued interest per annum