Nationalised Banks: Judge Reverses Self

18 Nov 2011

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CBN Governor, Sanusi Lamido Sanusi

By Davidson Iriekpen

Justice Charles Archibong of the Federal High Court in Lagos Thursday reversed his earlier order temporarily halting the operations of the three banks that were recently nationalised by the Central Bank of Nigeria (CBN).

The three banks are Mainstreet (Afribank), Keystone (Bank PHB) and Enterprise (Spring Bank).

In the new order, Justice Archibong said the order granted on Monday was made specifically to freeze dealings in the equity of the affected banks in relation to the relief in the main application of the applicants for the enforcement of their fundamental rights in the suit.

The judge added that the order was not intended to freeze the day-to-day business or banking operations of the affected banks.

He submitted that the order was equally not intended to interfere with the current management of the banks in any way other than to freeze dealings with the equity of the targeted banks.

Archibong, while ruling on the ex-parte application filed by Chuks Nwachuku, on behalf of some aggrieved shareholders of the former banks, had restrained the banks from further dealing with the assets, businesses and operations of the three banks pending the determination of the motion on notice.

The order had caused panic in the banking industry and among depositors with analysts describing it as “reckless”. In spite of the order, normal banking activities had continued at the affected banks as their managements said that they were not served the injunction.

Even the CBN and the Nigeria Deposit Insurance Corporation (NDIC) said they were not aware of the order.

In a statement jointly signed by the Head, Corporate Communications, CBN, Mr. Mohammed Abdullahi, and the Head, Corporate Communica-tions, NDIC, Mr. H. S. Birchi, the two regulatory institutions insisted that the three banks had been duly licensed and are thus authorised to carry on banking business.

The shareholders among whom are Boniface Okezie, Adeyemi Kehinde, Adebowale Bolanle and Cole Alexander in the motion ex-parte are seeking for an order to restrain the three new banks, the CBN, the NDIC and the Assets Management Corporation of Nigeria (AMCON) from further dealing with the assets, businesses and operations of the nationalised banks.

The aggrieved shareholders of the affected banks had gone to court to challenge the nationalisation of the three banks, saying that the actions violated their rights to freedom from compulsory acquisition of property guaranteed under the constitution and the prohibition of nationalisation of enterprises contained at Section 25 of Nigeria Investment Promotion Commission Act.

Joined as respondents in the suit are the three nationalised banks, the CBN, NDIC, AMCON, the Securities and Exchange Commission (SEC), the Nigerian Stock Exchange (NSE), the three banks and the Minister of Finance.

In the suit, the shareholders argued that the revocation of the licences of the banks by the CBN Governor, Sanusi Lamido Sanusi, was prejudicial to their rights to invest in public quoted companies in accordance with the Nigeria Investment Promotion Commission (NIPC) Act and the Investment and Security Act (ISA).

Part of the reliefs sought by the shareholders include a declaration that the action of the CBN, NDIC and the AMCON in purporting to transfer the assets, businesses and operations of the nationalised banks to the new banks is a breach of their fundamental human rights to freedom from compulsory acquisition of property as guaranteed by the constitution.

They are also seeking for an order of the court for the respondents to jointly and severally pay them punitive damages to be determined by the court through their lawyer for the diminution in the value of their shares of the nationalised banks as a result of the unlawful and malicious conduct of the CBN governor.

The shareholders are equally seeking an order of perpetual injunction restraining the three new banks, the NDIC and the AMCON from offering for sale or advertising or representing to any person, any intention or offer for sale or transferring or purporting to transfer to any person any interest in the assets, businesses and operations of the three nationalised banks.

Tags: CBN, Featured, Nationalised Banks, News, Nigeria

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Comments (2)

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  • i strongly support the struggle restraining the CBN,NDIC,AMCON from transfering the nationalised banks asset to their new ones.


    Posted: 3 years ago

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  • Only in Nigeria can a Judge reverse himself or herself after signing and sealing an order or judgement. A judge can change is order with the slip rule but not when orders or judgements are signed and sealed. A Judge lives forever with his or her order or judgement and that order or judgement can only be changed or reversed in another place and at a higher level.

    From: Patrick Agbobu

    Posted: 3 years ago

    Flag as inappropriate

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