Indian billionaire Sunil Vaswani's Stallion Group loses $117 million court fight with Nigerian bank

A Nigerian federal court has ruled in favor of United Bank for Africa Plc in its three-year fight to recover ₦156 billion ($117 million) from Stallion Group, the Dubai-based conglomerate run by Indian-Nigerian brothers Sunil and Mahesh Vaswani, the bank said in a statement.

Justice Daniel Osiagor of the Federal High Court in Ikoyi, Lagos, upheld UBA's appointment of a receiver and manager over Stallion's mortgaged assets and affirmed the bank's right to enforce its security, according to a statement from the lender. The judge held that disagreement over the exact amount owed did not invalidate the underlying debt, and that a reconciliation of accounts between the two sides did not extinguish it.

The court also barred the defendants from diverting money owed to them by government agencies, confirmed the liability of the guarantors on the loans, and rejected an objection by one of the defendant companies that its consent had been needed before the mortgage was created. It resolved the issues before it in UBA's favor, the bank said.

UBA said the decision confirms that "disputes over the precise amount of an outstanding debt do not, by themselves, invalidate the underlying indebtedness." The ruling allows the receiver, Romeo Ese Michael, to take possession of the mortgaged property and seek protective orders over it.

UBA is chaired by Nigerian banker Tony Elumelu.

How the dispute began

UBA, along with its Cameroon and Ivory Coast units, sued in 2023. The defendants are Stallion Nigeria Ltd. and 10 others, among them Stallion Motors Ltd., The Honda Place Ltd., Von Automobile Nigeria Ltd., Popular Farms and Mills Ltd., Qingqi Motorcycle Manufacturing Ltd. and Sunil Vaswani himself.

In court papers, the bank said it began extending credit to Stallion Nigeria in 2014, that the facilities were used by sister companies and secured by mortgages, and that Vaswani personally guaranteed them. UBA said part of the money financed a 2014 federal government contract won by Stallion Motors to supply 700 Ashok Leyland trucks and troop-carrying vehicles and 50 buses. The bank alleged that Stallion Motors routed a $50 million first payment under that contract to an account in Dubai and moved other funds abroad.

On Oct. 20, 2023, Justice Akintayo Aluko ordered banks to freeze the defendants' accounts and allowed UBA to take over Stallion properties in Lagos, Port Harcourt and Kano, including sites on the Lagos-Badagry Expressway, in Port Harcourt's Trans Amadi industrial area and in Kano's Challawa industrial estate. The receiver and court bailiffs, escorted by police, took control of the sites on Nov. 10, 2023. The court later refused the defendants' request to set the order aside.

Stallion's side

Stallion Nigeria rejected the bank's claim in December 2023, calling it entirely false. "Stallion Nigeria Limited does not owe UBA the alleged sum of N156 Billion," Executive Director Tajudeen Olalere said in a statement at the time.

The company said it was the only group entity with a financing contract with UBA, that the bank had promised a reconciliation of accounts before going to court, and that it had made several deposits on the account while waiting to be paid on a part-financed federal government contract. It said its assets "are immoveable and with a combined value together with receivables over and above the alleged indebtedness." It also appealed the refusal to lift the 2023 orders.

In court, Stallion's lawyers led by Wahab Shittu argued that the mortgage had not been registered with the Corporate Affairs Commission within the required 90 days and that the suit should be struck out for lack of jurisdiction.

Who the Vaswanis are

Sunil Vaswani, who was born in India, chairs Stallion Group, which traces its roots to 1969 and now operates in 18 countries. His brother Mahesh is managing director. The family runs the business from Dubai.

In Nigeria, Stallion distributes Honda, Hyundai, Nissan, Volkswagen, Audi, Skoda and Porsche vehicles, assembles cars and trucks locally, and in 2014 rolled out the first Nissan Patrol built in Nigeria. The group also processes rice and trades sesame and other farm commodities, makes steel reinforcing bars, plastics and packaging, and runs aquaculture and logistics businesses.

It is not the group's first clash with a Nigerian bank. In 2019 Guaranty Trust Bank won a debt judgment against Stallion Nigeria in the same court. The parties agreed a settlement, and the bank's receiver later retook Stallion's showroom in Lagos's Victoria Island district after the company missed agreed payments.