Afromedia accounts frozen, risk losing properties, as firm is slammed with lawsuit
Afromedia has been hit with a court order that has affected the release of their Audited Financial Statements for the year ended December 31, 2022.
The stock market-listed company said the court order led to all of Afromedia’s accounts being frozen, preventing it from accessing its funds.
As a result, Afromedia, in a statement to shareholders obtained by Ripples Nigeria on Tuesday, disclosed that the firm will be unable to meet the March 31, 2023, deadline to submit its annual report for last year.
Consequently, the advertising firm will not be releasing the fourth quarter financial result for 2022, neither will Afromedia hold its Annual General Meeting within the timeframe specified by the capital market authority, Nigerian Exchange Limited (NGX).
What you need to know
Afromedia has a court case involving Standard Chartered Bank Limited over the N3.15 billion loan extended to the advertising company under its former Managing Director, Akin Ire Olopade.
Ripples Nigeria understands the firm could lose property, plant and equipment collateral, as the assets were used to secure the loan.
“The loan from Standard Chartered Bank Limited is secured by property, plant and equipment and on the personal guarantee of the former Managing Director, Mr. Akin Ire Olopade.
“The average floating interest rate is 18.5%. The loan has remained stagnant as a result of concession by the Standard Chartered bank to stop charging interest pending the conclusion of a court case.” another statement seen by Ripples Nigeria said.
“Bank overdrafts were secured on the personal guarantee of the former Managing Director, Mr. Akin Ire Olopade and a fixed and floating charge on Afromedia Plc land and building in March 2010. The average floating interest rate is 18.5%,” the statement reads in part.
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Meanwhile, in its third quarter statement in 2022, Afromedia expressed worry towards its going concern, as the company is facing some uncertainties that could lead to material adjustment to the carrying amount of the company’s asset or liability affected in future periods.
“Afromedia Plc is currently undergoing some going concern uncertainties. Even though these uncertainties are present, the consolidated and separate financial statements are still being prepared ongoing concern basis.
“The preparation of its consolidated and separate financial statements in conformity with IFRSs requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, revenue and expenses and the accompanying disclosures, and disclosure of the contingent liabilities at the end of the reporting period.
“Uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of the asset or liability affected in future periods,” Afromedia wrote under its going concern
It was learnt that Afromedia’s 2022 Audited Financial Statements and the Unaudited Financial Statements for the first quarter of 2023 will now be filed on or before June 29, 2023, and July 29, 2023, respectively.
This is dependent on the outcome of the court order.
“On the 8th of December 2022, a Garnishee Order Nisi was given against the Company which resulted in all its bank accounts being frozen and funds therein rendered inaccessible.
“The Company has appealed the Order and is hopeful that the Garnishee Order would be vacated with dispatch.
“However, due to this Order, the Company is unable to fulfil its financial obligations towards the preparation of its Audited Financial Statements as well as prepare for its Annual General Meeting within the period stipulated by regulation.
“The Company shall file the 2022 Audited Financial Statements and the Unaudited Financial Statements for the first quarter of 2023 on or before the 29th of June 2023 and 29th of July 2023 respectively,” the company said.