Innoson Motors sues Imo government over N2.5 billion debt

Innoson Vehicle Manufacturing Company (IVM) says it has filed a lawsuit against Imo State Government in Anambra State High Court for unpaid debt

The company said the lawsuit followed the failure of the state government to pay or repay a debt of more than 2.5 billion naira for the purchase of vehicles and their parts.< /p>

Innoson's head of corporate communications, Cornel Osigwe, who disclosed in a statement on Friday, said the state government had refused to pay the debt despite "repeated requests and pleas" of the company

He said Innoson Chairman Innocent Chukwuma repeatedly asked Imo State Governor Hope Uzodinma to pay the debt but the governor refused.

"The inability of the state government to pay the N2.5 billion purchase price of the supplied vehicles has resulted in difficulty for Innoson Vehicles to meet its loan repayment obligations to Keystone Bank and the Bank of Industry,” he said.

"More so, this resulted in the consequent loss of profit and accrued interest."

The vehicles were provided in good faith to the state government based on an agreement with the governor that payments would be made after deliveries, the company spokesperson said.

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Mr. Osigwe said the debt value of 2.5 billion naira, worth $3.8 million in dollars, has now risen to around $6.3 million, pointing out that the value of the silver has depreciated by more than 40%.

He said it is on this premise that the company seeks to collect the debt with an interest rate of 10%.

"You are covering up some facts" - Imo government tells Innoson

Reacting, Imo State Information Commissioner Declan Emelumba said the company Innoson was covering up some facts in the allegation.

He accused the company of intentionally refusing to admit that the state government had made certain payments and that the amount claimed by the company was only a balance of the total cost of the vehicles purchased by the government.

READ ALSO: Why we are starting production of tricycles in Nigeria - Innoson

“The truth is that the total value of the contract we had with them was over 5 billion naira, of which we paid 3.5 billion naira. So they are talking about the balance,” Mr. Emelumba told PREMIUM TIMES.

The Information Commissioner argued that the state government had shown confidence in the contract by making a partial payment to the Innoson Group, insisting that the impression created by the company against the government was "false and incorrect".

"And second, they also didn't admit that as part of this agreement they had to set up a maintenance shop for the vehicles, because part of the agreement was that they would maintain vehicles,” he said.

"They didn't start this shop, but that didn't stop us from paying off the debt."

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