Court Orders Diamond, Fidelity, First Bank, 4 others to remit $793 Million to TSA

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LAGOS, JULY 21, 2017 – Justice Chuka Obiozor of the Lagos Division of the Federal High Court on Thursday ordered the momentary remittance of $793,200,000 by seven Nigerian commercial banks to the federal government.

The money was allegedly hidden with the banks in violation of the Federal Government’s Treasury Single Account policy.

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

The judge ordered the banks to remit the various amounts into the designated Federal Government’s Asset Recovery dollars account domiciled with the Central Bank of Nigeria.

According to court documents filed by counsel to the Attorney General of the Federation, AGF, Yemi Akinseye-George, “a total of $367.4m was illegally hidden by three government agencies in UBA, while a sum of $41m was illegally kept in a NAPIMS fixed deposit account with Skye Bank.”

The documents indicated that “$277.9m was hidden in Diamond Bank; $18.9m in First Bank; $24.5m in Fidelity Bank; $17m in Keystone Bank; and $46.5m in Sterling Bank.”

A lawyer from Mr. 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 were revenues, donations, transfers, refunds, grants, taxes, fees, dues, tariffs etc accruable to the Federal Government from different ministries, departments, parastatals and agencies,” said Mr. Adodo.

Mr. 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.

The 1st to 7th respondents (banks), he said, “in collaboration with and/or collusion with unknown officials of the Federal Government, conspired to disobey the relevant constitutional provisions, thereby depriving the Government of the Federal Republic of Nigeria of funds belonging to it, which are needed urgently to fund pressing national projects under the 2017 budget.”

Among the allegedly culpable government agencies is the National Petroleum Development Company.

Moving the ex-parte application on Thursday, Mr. George said “it would best serve the interest of justice for Justice Obiozor to order the banks to remit the funds to the Federal Government, to prevent the funds from being moved or dissipated.

“The withheld funds are urgently required for the implementation of the 2017 budget. The budget has a lifespan of 12 months and we are already in the middle of the year. By hiding these funds, the Federal Government is being forced to borrow money from these commercial banks at exorbitant interest rate,” Mr. Akinseye-George added.

After listening to the counsel, Mr. Obiozor granted the interim orders.

He directed that the order should be published in a national daily newspaper.

He, subsequently, adjourned till August 8, 2017, for anyone interested in the funds to appear before him to show cause why the interim orders should not be made permanent.

‘We are not guilty’

In a swift response to the judge’s decision, Fidelity Bank Plc denied holding any wrongdoing.

Charles Aigbe, the Divisional Head, Brand and Communications at the bank, said since the commencement of the TSA policy, all TSA related accounts held by the bank were fully disclosed to the authorities.

“We do not have any TSA related account with a balance of $24.5m in Fidelity Bank which has not been remitted to the authorities,” Mr. Aigbe said in a statement.

“This matter is coming to us as a surprise. We are therefore reaching out to the Office of the Attorney-General of the Federation to ascertain which account or parastatal they are referring to with a view to carrying out a detailed reconciliation.”

DCSL 90X780

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