Auto firm petitions Gov. Sanwo-Olu over unpaid debt, threatens N5bn legal action

Michael Olumide

An automobile company, Alujo Asiwaju Auto Nigeria, has raised an alarm over an alleged outstanding debt owed by the Lagos State Government, calling on Governor Babajide Olusola Sanwo-Olu to urgently intervene or risk legal consequences.

The firm, a dealer in multiple vehicle brands, disclosed that it is considering instituting legal proceedings against the state government, with a demand for N5 billion in damages over what it described as a prolonged delay in settling payments for vehicles supplied.

According to the company, the dispute dates back to July 2025, when it supplied a fleet of vehicles to the Lagos State Government under an agreement that payment would be made promptly.

While acknowledging that part payment has been received, the company insisted that a substantial balance remains unpaid.

In a letter written on its behalf by Kpetsigo Oliver Ayodele of Rolling Hills Chambers, the company lamented that several correspondences and reminders sent to the state government have yet to yield any positive response.

The legal representative noted that the delay in payment has plunged the company into severe financial distress, affecting its operations and stability. He described the situation as not only a business setback but also a deeply troubling humanitarian issue.

According to the letter, the consequences of the unpaid debt have extended beyond financial losses, with tragic outcomes reported among financiers linked to the transaction. One financier, who reportedly funded the vehicle supply, was said to have lost his life after being unable to afford a critical medical procedure due to lack of funds tied up in the unpaid contract.

In another instance, the lawyer alleged that a separate financier also suffered a devastating personal loss, as his son reportedly died due to the inability to secure adequate medical care, a situation attributed to the delayed payment.

The company argued that these incidents underscore the urgency of the matter and the far-reaching impact of the government’s alleged failure to honour its financial obligations.

In its latest correspondence dated March 24, 2026, and addressed through the Office of the Chief of Staff to the Governor, the firm issued what it described as a “strong and final demand” for immediate payment of the outstanding balance.

The letter referenced earlier communications sent in December 2025 and January 2026, reiterating the company’s claims and emphasizing the need for urgent action.

Giving the Lagos State Government a 48-hour ultimatum from receipt of the letter, the company warned that failure to comply would leave it with no option but to initiate legal proceedings to recover the debt and seek damages amounting to N5 billion for breach of agreement, financial losses, and associated consequences.

As of the time of filing this report, there has been no official response from the Lagos State Government regarding the allegations.

The unfolding dispute highlights growing concerns over contract execution and payment delays in public sector transactions, with stakeholders warning that such issues could undermine confidence in government partnerships if not promptly addressed.