INNOSON, Client, Bicker over Non-Supply of Vehicles

By Jude Atupulazi

These do not seem like the best of times for Chief Innocent Chukwuma, the chairman of Innoson Vehicle Manufacturing Company whose company has been dragged to the Federal Competition and Consumer Protection Commission (FCCPC) over a failed business by a dissatisfied client, Petronella (Nig) Limited, for failing to supply N415 million worth of vehicles to the firm.

This comes at a time the News Agency of Nigeria (NAN), has gone public against Innoson for a breach in contractual agreement over supply of vehicles.

This time, Petronella (NIG) Ltd wants Innoson to refund the sum of N415m paid to him by the client for the supply of vehicles, as well as compensation.

A lawyer, Olaniwun Ajayi, has asked the FCCPC to investigate the allegations levelled against the motor manufacturing company and grant appropriate relief to his client, Petronella.

The petition dated 10th January 2023 and made available to Fides, within the last week, 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 and due compensation paid.

According to the petitioner, Petronella purchased goods from Innoson Vehicle Manufacturing Company Limited (IVM), but 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 his client.

He therefore urged the Commission to investigate what he called IVM’s unlawful behaviour and also compel IVM to pay due compensation to Petronella.

The petition read, ‘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 said that 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,’ the petitioner further alleged.

He said that 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 out 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,’ the petition further stated.

It said 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 but that IVM did not respond to those requests.

The petitioner maintained that ‘IVM’s false representations and failure to refund the monies 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. It 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.

But reacting to the allegations, the Chairman of Innoson Manufacturing Company, Chief Innocent Chukwuma said rather played safe, pointing out that the matter was in court. He however said it was up to the complainant to do the needful and get back the vehicles.

‘The complainant is still with my vehicles. If the company brings my vehicles, I will pay them their money, it’s as simple as that,’ Chukwuma stated.