Abubakar Malami

N249b: Fed Govt stops case against banks

•Banks seek compensation 

The Federal Government yesterday applied to discontinue its suit at the Federal High Court, Lagos seeking $793,200,000 (about N249,659,700,000) from seven banks, which it claims they hid for “unknown government officials”.

Prof. Yemi Akinseye-George SAN, who brought the notice of discontinuance, said the government had decided to explore an “out of court settlement” with the banks in the public interest.

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

Last July 20, the government accused the commercial banks of hiding $793.2m in contravention of the Treasury Single Account (TSA) policy.

Attorney-General of the Federation (AGF) Abubakar Malami (SAN) through Akinseye-George, sought and obtained an interim order directing the banks to remit the $793.2m to a designated account at the Central Bank of Nigeria (CBN).

Justice Chuka Obiozor, who granted the ex-parte application, adjourned till yesterday for the banks to show cause why the interim order should not be made permanent.

However, at the resumed hearing of the matter yesterday, Akinseye-George notified the court of the notice of discontinuance dated August 7, pursuant to Order 50 Rule 2 Subsection 1, Federal High Court Civil Procedure Rules of 2009.

He said he had been instructed by the AGF to discontinue the case in the overall interest of the public.

“We have decided that the matter is better resolved through other means apart from litigation. We are all Nigerians and we all meant well for the country.

“The rule, under which the application was brought, allows the withdrawal of the suit without seeking the court’s leave.

“The rules also allow the withdrawal of the suit not later than 14 days of serving the defendants. We are still very much within the 14 days, pleadings have not been concluded while issues are yet to be joined.

“For these reasons, I enjoined the court to strike out the suit,” Akinseye-George said.

He added: “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.”

However, lawyers representing six of the banks, except Skye Bank Plc, which had no legal representation, accused the government of unjustly damaging the banks’ reputation by making a false allegation.

They urged the court to dismiss the suit instead of striking it out, noting that any case struck out could be re-filed while a case that is dismissed could no longer be re-filed.

UBA’s counsel Dr. Ajibola Muraina said the government served him the notice of discontinuance only after he had filed all necessary court papers.

He contended that issues had already been joined and as such the proper thing to be done by the court was to dismiss the suit and not to strike it out.

He asked the court to award the cost of N10 million as damages against the government.

Muraina urged the court to direct the publication of the notice of discontinuance in all national dailies.

The lawyer’s submission was adopted by other defendants’ lawyers, namely, Seyi Sowemimo (SAN) for Fidelity Bank; Abimbola Akeredolu (SAN) for Sterling Bank; N. A. Oragwu (Diamond Bank); E.A. Okorie (First Bank) and Babatunde Ogungbamila (Keystone Bank).

Akeredolu contended that the Federal Government decided to withdraw the case having realised that it was filed in error.

Ogungbamila, however, insisted on a cost of N20 million, saying his client had suffered a substantial damage to its reputation.

But Akinseye-George countered 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 government came to court early enough before the maturation of time for the court to hear arguments on the substantive suit.

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

He urged the court to discountenance their arguments and strike out the suit rather than dismiss it.

He emphasised that 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.

Justice Obiozor adjourned till today for ruling on whether the case would be struck out or dismissed.

According to court processes filed by the government on July 20, $367.4 million was allegedly hidden by three government agencies in UBA; $41 million was kept in a National Petroleum Investment Management Services (NAPIMS) fixed deposit account with Skye Bank.

The documents stated that $277.9 million was 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.

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