Firm sues INNOSON Motors for Allegedly Failing to Supply N415m Worth of Vehicles


By Kamsi Anayo

A lawyer, Olaniwun Ajayi, has dragged INNOSON Vehicle Manufacturing Company to the Federal Competition and Consumer Protection Commission for failing to supply N415 million worth of vehicles to Petronella (Nig) Limited.

Ajayi who sued INNOSON on behalf of the firm asked the FCCPC to investigate the allegations levelled against the motor manufacturing company and provide appropriate relief to his client(Petronella).

The petition dated 10th January 2023 and made available to our correspondent on Sunday in Awka, was addressed to the Executive Vice-Chairman, Federal Competition and Consumer Protection Commission, Abuja.

The petitioner accused INNOSON Manufacturing Company of violating the FCCPC Act and sundry infractions by false representation, insisting that his client should be refunded N415m paid to the motor manufacturing company with due compensation.

The petition reads in part, “We are solicitors to Petronella (Nig) Limited (“Petronella” or “our client”), a limited liability company duly registered under the laws of the Federal Republic of Nigeria, on whose instructions we write.

“Petronella purchased goods from Innoson Vehicle Manufacturing Company Limited (“IVM”), and in the course of that relationship IVM behaved in ways that breached several provisions of the Federal Competition and Consumer Protection Commission Act, resulting in considerable damages to our client. We urge the Commission to investigate IVM’s unlawful behaviour and cause IVM to pay due compensation to our client.

“Petronella carries on business as an oil servicing company. Its business involves leasing operational vehicles to, and maintaining the fleet of oil companies in Nigeria. In September 2021 Petronella entered into an agreement with Shell Petroleum Development Company of Nigeria Ltd. (“SPDC”), under which Petronella would provide SPDC with pick-up trucks for use in SPDC’s operations.

“Given the environment in which SPDC operates, vehicles intended for the company’s use must meet certain engineering and safety specifications. In particular, SPDC required that vehicles leased from Petronella must possess a five-star New Car Assessment Programme (NCAP) rating.

“Eager to support local enterprise, Petronella opted to buy made-in-Nigeria vehicles rather than vehicles of foreign manufacture. Petronella therefore approached IVM in September 2021 and inquired about IVM’s ability to produce and supply Petronella with vehicles that meet SPDC’s specifications. In an email to IVM on 04 September 2021, Petronella’s Managing Director listed the specifications that SPDC required and sought assurances that IVM vehicles met those specifications.

“One of the requirements listed in Petronella’s email was that “all vehicles must have New Car Assessment Programme (NCAP) 5-Star rating”. A copy of the email of 04 September 2021 from Petronella to IVM is attached herewith as Annexure A.

“IVM responded to Petronella’s inquiry by an email dated 07 September 2021, assuring Petronella that “IVM Vehicles have all the features as requested by your client, as contained in your email of September 04, 2021.

“On the strength of IVM’s representation , Petronella requested, and IVM issued an invoice for twenty units of IVM’s five-seater, double-cabin, 3.0L diesel pick-up known as the IVM Granite. Each unit of the IVM Granite was priced at N21.5m , bringing the price for all twenty vehicles to a total sum of N430m. Petronella’s request for an invoice was conveyed by email dated 23 September 2021.

The petitioner added, “Having received the invoice, Petronella placed an order for twenty units of the IVM Granite on 11 October 2021, and also paid a deposit of N65 million. Petronella then paid the rest of the purchase price in two tranches, comprising N80 million on 28 October 2021 and N270 million on 29th October 2021, leaving a balance of only N15 million. IVM issued a receipt for the initial deposit of N65m and assured Petronella that the vehicles would be delivered within two weeks from 11 October 2021.

“IVM only supplied eight out of twenty vehicles, the vehicles supplied did not have the features that IVM claimed they would have, and IVM has refused to refund money paid by Petronella

“Despite having received about N415 million from Petronella by 29 October 2021 for twenty units of the IVM Granite, IVM did not deliver the vehicles within the two-week timeframe that it had promised. When IVM finally delivered vehicles to Petronella, it delivered only nine vehicles, one of which it immediately retrieved because of a defect in the engine, so that Petronella was ultimately left with eight vehicles of the twenty that IVM had agreed to supply. IVM never delivered the remaining twelve vehicles.

“Crucially, the vehicles that IVM delivered did not meet the specifications that IVM had represented that they would meet. Specifically, the vehicles did not possess a five-star NCAP rating. When Petronella requested an NCAP crash test report, IVM did not provide one; instead, IVM forwarded by email a document that had the appearance of a crash test report, but which gave no indication that it had been issued by a crash testing authority.

“Petronella made repeated requests to IVM for details of the authority that issued the crash report via emails dated 20 and 22 November 2021, as well as a letter dated 21 November 2021. IVM did not respond to these requests.

The petitioner maintained that IVM’s false representations and failure to refund the moneys paid to it had caused Petronella to incur huge losses, including about N805,443 per day in expected income from the rescinded SPDC lease, from 04 November 2021 to date.

He added that his client obtained a substantial part of the purchase price through a bank loan, which was hoped to be repaid from the proceeds of the SPDC lease.

When contacted on the telephone for reaction, the Chairman of INNOSON Manufacturing Company, Chief Innocent Chukwuma said, “The matter is in court and the complainant is still with my vehicles. If the company brings my vehicles, I will pay them their money.



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