From Godwin Tsa Abuja

An indigenous firm, Kenchez Nigeria Limited, has asked the Central Bank of Nigeria (CBN) to take immediate regulatory sanctions against Polaris Bank for deliberately and unlawfully withholding a loan facility of N868 million belonging to it in clear breach of guarantee terms.

The company in its letter to the Governor of the Central Bank of Nigeria (CBN) and its Director of Consumer Protection, chronicled the numerous unethical conducts of Polaris Bank amounting to violations of banking laws and regulatory safeguards put in place for the stability of the banking sector.

The letter dated October 2 and written by its lawyer and former Attorney General of Imo State, Chuckwuma-Machukwu Ume, noted that the unethical conduct of Polaris Bank by unlawfully withholding N868m, which was duly disbursed into its custody by Lecon Finance Company Limited on the strength of Polaris’ own guarantee, transcends mere breach of contracts, but amounts to an attempted economic murder and financial strangulation of Kenchez Nigeria Limited, that has maintained 22 years of an unbroken banking loyalty with the bank.

Ume explained that his client, Kenchez Nigeria Limited, which has been banking with Polaris Bank limited for 22 years, had applied and obtained the loan from Lecon Finance Company Limited to acquire a 160-ton Terex Demag AC160-2 Crane for its operational activities.

Specifically, on March 6, 2025, Kenchez Nigeria Limited applied to Lecon Finance Company Limited for a direct finance lease facility of N902, 720, 000 to acquire a 160-ton Terez Demag AC160-2 Crane for its operational activities.

That by a Revised Indicative offer dated May 19, 2025 and subsequent letter of offer dated June 30, 2025, Lecon Finance approved the facility subject to some conditions, including the provision of a bank guarantee from a commercial bank acceptable to Lecon, to secure the principal, accruing interest and end-of-lease payments.

In addition, on July 8, 2025, Polaris Bank limited issued an offer letter approving a bank guarantee facility in the sum of N902, 720, 000 to Kenchez Nigeria Limited.

In the said offer letter, Polaris expressly stated the purpose of the facility as follows: “To secure equipment lease facility of equivalent sum at Lecon Finance Company; to finance the leasing of one unit of Terex Demag AC160-2 ton Crane, which will be deployed for the company’s use.”

However, long after the loan facility of N868 million was paid to Polaris Bank, which acted as the guarantee bank for the loan, it has refused to release same to its owner, Kenchez Nigeria Limited, even after satisfying all the preconditions put in place by the bank, including perfecting a legal mortgage over its property in Port Harcourt.

“It is important to state that our client duly complied with all preconditions, including execution of a third-party legal mortgage, thereby placing valuable landed property in Rivers State at the bank’s disposal, yet refused to release the funds even after extracting the substantial collateral and security from our client on the clear representation that guaranteed facility would be promptly released for the procurement of the crane.

“In law, contractual obligations expressed in mandatory terms, such as “shall not retain” and “not later than 30 days,” admit of no discretion or qualification. See Diamond Bank V Partnership Investment Co.Ltd (2009) 18 NWLR (Pt.1172) 67.

“Section 13 of the Banks and other Financial Institutions Act (BOFIA) 2020, mandating banks to conduct their operations in accordance with sound banking practices, and in breach of the CBN Consumer Protection Regulations, 2019, which requires fairness, transparency and good faith in dealings with customers.

“We, therefore, bring to your good office that Polaris bank’s actions amount to grave violations of both statutory and judicially recognised obligations. By unlawfully withholding N868m duly credited into our client’s account, while permitting interest of N16.2 million to accrue monthly, Polaris bank is in breach of its core duty of trust and sound practice under section 13 of BOFIA.

“We wish to bring to your attention that our office formally wrote to Polaris bank on September 15, 2025, seeking urgent resolution to this matter. The bank scheduled a meeting in response but subsequently cancelled it on no fewer than five occasions, demonstrating a clear and deliberate refusal to engage in good faith, despite being in possession of the funds owed.

The senior lawyer said this inaction by Polaris bank has forced his client to continue paying substantial interest on idle capital, causing severe disruption of its operational activities and economic growth.

“Crucially, withholding N868m funds expressly disbursed for the procurement of a critical crane has paralysed Kenchez Nigeria Limited, a Nigerian enterprise that has contributed significantly to local employment, commerce and industrial activity, thereby effectively strangling the lifeblood of this legitimate Nigerian business.

“Flowing from the above, the company is urging the CBN to direct Polaris bank to immediately release or refund the N868m, wrongly withheld, together with all interest already accrued and wasted since August 4, 2025; to mandate Polaris bank to assume liability for all subsequent monthly interest of N26, 206.860.66 until the facility is released or refunded, in line with clause 12 of the guarantee and its banker-customer duty and that the CBN should exercise its supervisory and disciplinary powers against Polaris bank to safeguard the stability of the banking sector, uphold depositor confidence and prevent a precedent that could embolden similar acts across the industry.”