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Government applies to withdraw case against seven commercial banks

The Federal Government on Tuesday, August 8, 2017 applied to withdraw the case it instituted against seven commercial banks in the country, which were accused of violating the government’s Treasury Single Account (TSA) policy.

Federal High Court

The Federal High Court in Lagos

Government had alleged that the banks connived with some government agencies to illegally hide in their coffers a total of $793,200,000, which was meant to have been transmitted to the TSA account domiciled in the Central Bank of Nigeria.

The concerned banks are United Bank for Africa, Diamond Bank Plc, Skye Bank Plc, First Bank Limited, Fidelity Bank Plc, Keystone Bank Limited, and Sterling Bank Plc.

Justice Chuka Obiozor of the Federal High Court in Lagos had on July 20, 2017 granted an interim order in favour of the Federal Government, directing the seven banks to temporarily remit the funds to the TSA.

The court had then adjourned till Tuesday for the banks to appear before him to show cause why the interim order should not be made permanent.

But, at the resumed proceedings on Tuesday, counsel for the Federal Government, Prof. Yemi Akinseye-George (SAN), said he had been instructed by the Attorney General of the Federation to discontinue the case in the overall interest of the public.

“It is not out of weakness that the Federal Government is withdrawing this case. The banks are corporate citizens and we are interested in the well-being of everybody,” Akinseye-George said, urging Justice Obiozor to strike out the suit.

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But the banks, which claimed that the Federation Government’s allegation against them was false and that they had already been unjustly disparaged, urged the judge not to merely strike out the suit but to dismiss it and award N20 million cost against the Federal Government.

They noted that any case struck out could be re-filed while a case that is dismissed could no longer be re-filed.

Counsel for the banks, including Mr. Seyi Sowemimo (SAN) and Mrs. Abimbola Akeredolu (SAN), took turn to argue that the proper order that the court ought to make in the circumstances of the case was to dismiss the suit and not strike it out.

Akeredolu, who represented Sterling Bank Plc, argued that, just like the rest of the counsel, the Federal Government decided to withdraw the case having realised that it was filed in error.

“My Lord should not allow the instrumentation of the law to be used as a vehicle of mischief. And nobody is above the law, even the Federal Government of Nigeria…We are praying the court make an order for a meagre cost of N10 million against the plaintiffs,” Akeredolu said.

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Counsel for Keystone Bank Limited, Mr. Babatunde Ogungbamila, however, insisted on a cost of N20 million against the Federal Government, saying his client had suffered a substantial damage to its reputation.

“They have destroyed the reputation of our banking industry and they did this recklessly because the fundamental economic underpinning of this country was actually targeted,” Ogungbamila said.

But the Federal Government’s lawyer, Akinseye-George, countered them, arguing that the parties had yet to join issues because the Federal Government had yet to respond to the court processes filed by the banks.

He added that the Federal Government came to court early enough before the maturation of time for the court to arguments on the substantive suit.

Akinseye-George also argued that the banks were not entitled to any cost because they did not file any affidavit to particlurise the nature of the damage they claimed to have suffered.

He urged the court to discontenance their arguments and strike out the suit as prayed by the Federal Government, rather than dismiss it.

He said the suit was not being withdrawn because it lacked substance or was baseless but because it was in the overriding interest of the public to withdraw it.

After taking arguments from the parties, Justice Obiozor adjourned till August 9, 2017 for ruling on whether the case would be struck out or dismissed.

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The Federal Government had in the suit alleged that total of $367.4 million was illegally hidden by three government agencies in UBA, while a sum of $41 million was illegally kept in a NAPIMS fixed deposit account with Skye Bank.

The court papers stated that $277.9 million was hidden in Diamond Bank; $18.9 million in First Bank; $24.5 million in Fidelity Bank; $17 million in Keystone Bank; and $46.5 million in Sterling Bank.

A lawyer from Akinseye-George’s law firm, Vincent Adodo, who deposed to a 15-paragraph affidavit in support of an ex parte application filed by the AGF, stated that seven banks colluded with Federal Government officials to hide the funds in breach of the government’s TSA policy.

The funds, he said, were revenues, donations, transfers, refunds, grants, taxes, fees, dues, tariffs etc accruable to the Federal Government from different ministries, departments, parastals and agencies.

Adodo said the banks had failed to remit the funds to the TSA domiciled in the CBN in violation of the guidelines issued by the Accountant General of the Federation which fixed September 15, 2015 as the deadline for such funds to be moved.‎

By Chinyere Obia

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