Financial Strain Deepens as Innoson Drags Imo Government to Court Over Unpaid N2.5 Billion Vehicle Deal Gone Sour

 

In a bold legal move, Innoson Vehicles Manufacturing Company Ltd has taken the Imo State Government to court over an outstanding debt that has plunged the indigenous automobile manufacturer into financial distress. The amount in dispute stands at a staggering N2,547,666,435.00, translating to approximately $6.3 million. This figure represents the total cost of vehicles and automotive parts supplied to the state government.

This legal action is the result of what Innoson describes as prolonged silence and inaction on the part of the Imo State administration, led by Governor Hope Uzodinma. The company said the transaction was based on a mutual understanding that payment would be completed after delivery. However, despite receiving the vehicles, the Imo State Government has allegedly failed to honor its financial obligations.

The case was formally filed at the High Court of Anambra State, Nnewi Division. Innoson is asking the court to compel the Imo Government to pay the full debt along with an additional 10 percent interest on the amount, a demand aimed at covering the financial damage and losses incurred due to the delay in payment.

Cornel Osigwe, Head of Corporate Communications at Innoson Group, said the legal route became unavoidable after numerous attempts to reach an amicable resolution were ignored. The company made multiple appeals, both formally and informally, hoping to resolve the situation outside court. These efforts, Osigwe stated, were met with silence or broken promises.

The delayed payment has had a significant impact on Innoson's operations. According to Osigwe, the financial strain has made it increasingly difficult for the company to meet its own loan obligations to banking institutions. The burden of the unpaid debt, he noted, has disrupted the company’s production schedule and strained its working capital, threatening its long-term viability if not addressed swiftly.

Beyond the financial hit, the delay has also led to the devaluation of the debt's worth. Osigwe explained that the real value of the N2.5 billion has dropped by over 40 percent due to inflation and market depreciation, making the loss even more painful for the company. Despite these setbacks, Innoson remains committed to defending its rights and is hopeful the court will deliver a fair judgment.

The court filing outlines that the vehicles supplied were essential for the operations and development goals of the Imo State Government. According to Innoson, the deliveries were made in good faith, with full documentation, and were meant to enhance public services across the state. The refusal to pay, therefore, not only undermines business confidence but also sets a worrying precedent for indigenous suppliers and manufacturers across Nigeria.

Legal analysts watching the case note that this development could have broader implications for government-private sector relationships in the country. Should the court side with Innoson, it may push other companies who have remained silent in similar circumstances to pursue justice through legal means. Conversely, if the Imo Government manages to avoid payment or secure delays through legal loopholes, it could erode trust in public procurement agreements.

As the court proceedings continue, all eyes are on the Nnewi Division of the Anambra State High Court, where the outcome of this legal battle will unfold. Both the Nigerian business community and governance watchdogs are closely monitoring the case, viewing it as a crucial moment in enforcing accountability and fairness in commercial transactions involving public institutions.

The stakes are high. For Innoson, the case is not just about recovering money but about protecting its brand, preserving its financial health, and affirming its role as a trusted indigenous manufacturer. For the Imo State Government, the outcome could shape perceptions about its credibility and commitment to honoring contractual agreements.

For now, the wheels of justice are in motion. Whether they will turn in Innoson’s favor remains to be seen.