Moves by a private company to auction the assets of Ghana’s biggest insurance company, State Insurance Company (SIC), have been put on hold until October 19, 2015.The Commercial Court in Accra will, on October 19, 2015, decide whether or not to allow the attachment and subsequent sale of SIC’s assets by Ivory Finance Company Limited.
At the court’s hearing in Accra yesterday, the presiding judge, Mr Justice George Koomson, gave lawyers from both sides 10 days each to file their written submissions.
He then fixed October 19, 2015 to deliver the court’s decision on the attachment or otherwise of SIC’s assets for auction.
The effect is that Ivory Finance cannot continue executing a court order to auction SIC’s assets, while SIC is barred from selling or touching assets so far attached by Ivory Finance until the determination of the case by the court.
Ivory Finance this month began attaching vehicles and buildings belonging to SIC for auction, following SIC’s inability to settle a GH₵232 million plus debt owed Ivory Finance.
The two companies are currently engaged in a legal tussle over the GH₵232 million debt emanating from penalties and interests which accumulated on a GH₵19.3 million facility SIC guaranteed for a private company, ITAL Construct International Limited.
The attachment of SIC’s assets began on Wednesday, July 8, 2015, following a court order giving Ivory Finance the go ahead to retrieve the money.
ITAL Construct International Limited, Mr Kwesi Baidoo and Mr James Kwegyir Aggrey, both directors of the construction company, are the other defendants in the case.
The SIC served as a guarantor for ITAL Construct, after the company contracted a loan of GH₵19.3 million from Ivory Finance on April 10, 2013.
Interests and other penal charges stood at GH₵232 million as of June 2015.
AssetsThe lawyer for Ivory Finance, Mr Richard D. Amofa, has filed a list of assets belonging to SIC and the construction company for auction.
In its bid to stop the attachment of its properties for auction, lawyers for SIC filed an application for an order to suspend enforcement of the consent judgement, which was entered by the court after the parties had signed the terms of settlement.
The SIC is asking for a suspension until the final determination of an appeal against the Commercial Court’s decision to sanction the retrieval of the amount from SIC.
According to the SIC, it would suffer “untold hardship” if Ivory Finance was permitted to recover the judgement debt, “as third-party interests would have set in and the decision in the pending appeal would be rendered a nugatory if successful”.
BackgroundThe parties in the substantive case at the Commercial Court on November 24, 2014 entered terms of settlement after Ivory Finance had, on November 21, 2013, issued a writ against the defendants to claim GHc19.3 million, with interest and penalties, until the final date of payment.
Signatories to the terms of settlement were a former Managing Director of SIC, Mrs Doris Awo Nkani; Mr Emmanuel Adu-Sarkodee, the Chief Executive Officer (CEO) of Ivory Finance, and Mr Baidoo, who initialled on his behalf and that of ITAL Construct and Mr Aggrey.
Despite the terms of settlement, which were entered and adopted by the Commercial Court on November 27, 2014, the defendants failed to fully meet their debt obligations.
The SIC later paid GHc19.3 million per the court’s orders in January 2015 but has since not settled its interest and penalties which keep accumulating.
As a result of ITAL Construct’s failure to fully settle its debt, Ivory Finance filed the necessary legal documents to recover the interest from SIC, which had served as the guarantor for the credit facility.