Innoson Vehicles Sues Imo Government Over N2.5bn Debt

Innoson Vehicle Manufacturing Company has filed a lawsuit against Imo State Government over its failure to pay a N2.54 billion debt owed to the firm.

Innoson Sues Imo Government

The company’s Corporate Communications Head, Cornel Osigwe disclosed this in a statement released on Friday.

According to the statement, in a lawsuit filed at an Nnewi high court, the company is claiming over N2.5 billion with a 10 percent interest.

It said the state government had purchased various IVM vehicles – including their parts which it manufactured, sold, and delivered – worth N2.54 billion and refused to make payment “despite repeated demands and appeals”.

“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,” the statement reads.

“For the avoidance of doubt, sometimes 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 include “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), 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 and 20 sets of B. Canopy,” Innoson Vehicles said.

“The above vehicles, which were valued at over N2.5 billion ($6.3 million), 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 grants the state the favor of paying for the vehicles after deliveries to them and which request was granted and honored.

“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.”

Innoson Vehicles further disclosed that the situation has led to “difficulties in fulfilling its loan repayment obligations to Keystone Bank Limited and Bank of Industry (BOI)”.

The company noted that the banks granted its credit facilities at the rate of 10 percent interest and other fees therein.

“More so, it has led to the loss of profit arising therefrom and the accruing interest,” the manufacturing company added.

‘It is also interesting to note that as of July 27, 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 percent.”

Therefore, Innoson Vehicles said it was “slamming a lawsuit of over N2.5 billion with an interest rate of 10 percent on the entirety of the sum claimed at the high court of Anambra state, Nnewi division”.

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