A former Attorney General of Imo State, Chuckwuma-Machukwu Ume (SAN), has threatened legal actions against Polaris Bank for deliberately withholding a loan facility of N868 million belonging to a customer, Kenchez Nigeria Limited.
In a demand letter addressed to the Managing Director of the bank dated September 15, 2025, Ume further threatened to report Polaris Bank to the Central Bank of Nigeria (CBN) and other relevant regulators, including the National Deposit Insurance Company (NDIC), of the alleged financial misconduct.
The senior lawyer is further demanding another refund of N16, 206,860.66 representing the first month’s interest which his client has already paid to Lecon Finance Company Limited, on the loan facility now being withheld by Polaris Bank.
The letter explained that Kenchez Nigeria Limited, which had 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 it’s operational activities.
However, long after the loan facility of N868 million was paid to Polaris Bank, which acted as the guarantor 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 it’s property in Port Harcourt.
This is after several demand letters by the company requesting for the utilization of the guaranteed funds or a refund of same to Lecon Finance Company Limited have not been acted upon by the bank.
Ume noted that by holding unto funds earmarked for a defined purpose, “your bank has acted contrary to 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.
In addition, he stated: “Your bank is already violating both section 7 of the Money Laundering Act and section 34 of the EFCC Act, as it cannot unilaterally freeze our client’s account or prevent it access to it’s account outside the rule of law.”
Specifically, on March 6, 2025, Kenchez Nigeria Limited applied to Lecon Finance Company Limited for a direct finance lease facility of N902, 720, 000.00 to acquire a 160-ton Terez Demag AC160-2 Crane for it’s operational activities.
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, 000.00 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 1 unit of Terex Demag AC160-2 ton Crane which will be deployed for company’s use.”
“That pursuant to this offer letter, our client complied with all preconditions and paid an upfront bank guarantee fee of N4, 513, 600.00. Polaris also compelled our client to perfect a legal mortgage over property in Port Harcourt, obtain counter-idemnity issuance and provide executed personal guarantees with notarized net worth statements.
“Furthermore, in compliance with the conditions imposed by Polaris Bank, our client executed a third-party deed of legal mortgage over it’s property in Port Harcourt, together with personal guarantees and indemnities.
“By clause 4:01 of the mortgage, Polaris required that “the mortgagor as beneficial owner hereby conveys to the bank all that property specified in the schedule…as continuing security for the payment of all monies and the discharge of all obligations and liabilities hereby covenanted to be paid.
Subsequently, on July 16, 2025, Polaris Bank issued it’s bank guarantee No Polaris/PH/BG/382/2025 in favour of Lecon Finance Company Limited, which expressly provided in clause 12: “that upon receipt of the portion of the principal sum into the account of the borrower, the guarantor shall not retain the funds in it’s custody but shall release the funds for the purpose for which it was granted not later than 30 days for Naira denominated loans.”
Ume stated that; “acting on the strength of the above guarantee by the bank, Lecon Finance Company Limited on August 4, 2025, disbursed the sum of N868m into the bank guarantee account of our client (Kenchez Nigeria Limited), domiciled with your bank.
“This disbursement triggered interest obligations under the facility at the rate of N16, 206, 860.66 per month, payable in arrears, notwithstanding that our client had not yet accessed the fund.