Alleged N50bn fraud: Court to hear suit against Sanusi Nov 18

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BY IKECHUKWU NNOCHIRI
ABUJA – The Abuja Division of the Federal High Court, yesterday, fixed November 18 to commence hearing on the suit alleging that the erstwhile Governor of the Central Bank of Nigeria, CBN, and Emir of Kano, Mallam Sanusi Lamido Sanusi, was involved in an alleged N50billion fraud.

Justice Ahmed Ramat Mohammed okayed the matter for hearing after it was confirmed that all the parties had filed and exchanged relevant court processes pertaining to the case.

The suit was entered before the high court by three shareholders of the defunct Intercontinental Bank Plc, Abdullahi M. Sani, Adaeze Onwuegbusi and Chijioke Ezeikpe.
Emir-Sanusi
The plaintiffs, through their lead counsel, Chief Chris Uche, SAN, alleged that Sanusi, as the CBN governor, acted contrary to the provisions of sections 12, 32, 35 and 39 of the Banks and Other Financial Institutions Act, Cap B4 Laws of the Federation of Nigeria 2004, by deliberately falsifying the actual financial state of affairs/solvency of intercontinental bank Plc and subsequently sold it to his cronies at a ridiculous sum of N50bn.

They accused Sanusi of violating section 35(2) (d) of the Banks and Other Financial Institutions Act, Cap B4 Laws of the Federation of Nigeria 2004, by appointing Mahmoud Lai Alabi an agent/staff of Senator Bukola Saraki as Managing Director of Intercontinental Bank Plc, to superintend the eventual sale/transfer of the bank to the trio of Mr Imokhuede, Mr. Wigwe, the MD and Deputy MD respectively of Access Bank and Senator Saraki.

Consequently, the plaintiffs are praying the court to among other things, determine “Whether the 1st defendant, acting as the Governor of the 2nd defendant did not act fraudulently, in breach of his public office, against the public interest and contrary to the provision of sections 12, 32, 35 and 39 of the Banks and Other Financial Institutions Act, Cap B4 Laws of the Federation of Nigeria 2004, in taking over Intercontinental Bank Plc, of which the plaintiffs are shareholders, and selling same to Access Bank Plc, notwithstanding that the facilitator of the said sale/buy-over transaction, Senator Bukola Saraki, was also indebted to Intercontinental Bank Plc, to the tune of N8.9bn, through his companies, Limkers, Dicetrade, Skyview Properties and Joy Petroleum, to the knowledge of the 1st defendant.

As well as whether Sanusi, “Did not act fraudulently in waiving/writing off the sum of 16.2bn owed by the Mr. Aig-Aigboje Imokhuede and Mr. Herbert Wigwe, the Managing Director and Deputy Managing Director of the Access Bank and the sum of N8.9bn owed by Senator Bukola Saraki and other sums so owed, all totalling over N40bn in a bid to enable the said Access Bank Plc to fraudulently purchase Intercontinental Bank Plc at a ridiculous sum of N50bn only, even when the quarterly profit of the said Bank was more than N50bn and which Bank at the material time was worth more than N1trillion, to the detriment of the Plaintiffs as shareholders and investors.

Aside Sanusi, the CBN and the Security& Exchange Commission were also joined as defendants in the suit.

Already, the former CBN boss has responded to the suit, contending that the high court lacks the constitutional powers to adjudicate on the matter.

In his preliminary objection, Sanusi relied on the provisions of section 53(1) of the Banks and Other Financial Institutions Act and section 52(1) of the Central Bank Act 2007, to challenge the competence of the suit.

In an affidavit deposed to by one Nduka Okatta, Sanusi, insisted that in his capacity as the governor of CBN, he had the statutory duty to ensure monetary stability and to avert any imminent threat to the soundness of the financial system in Nigeria.

Sanusi told the court that in June 2009, pursuant to the exercise of his statutory functions and powers under the CBN Act 2007 and the Banks and other Financial Institution Act, 2004, as governor of the 2nd defendant, ordered a special examination into the books and affairs of the defunct Intercontinental Bank Plc.

He said the examination revealed that the Bank was in grave financial situation following its inadequate capital provision, poor liquidity ratio and non-compliance with corporate governance obligation.

Besides, he maintained that it was in his bid to protect the financial interests of depositors of the bank that he had on August 14, 2009, removed the then Managing Director and the management team of the bank and appointed a new management team to oversee the affairs of the bank.

According to him, as part of the efforts to protect the interest of the bank’s depositors and the banking industry in general, the 2nd defendant, CBN, injected the sum of N100billion into Intercontinental Bank Plc, as a loan upon the terms set out in the order of August 14, 2009.

“At the time the 2nd defendant injected the said sum of N100billion into the defunct Intercontinental Bank Plc, the bank had gross insufficient operating capital and was not always on its own able to meet its obligations to its depositors”, he argued.

He further argued that the merger, take-over and subsequent transfer of the assets and liabilities of Intercontinental Bank Plc were done pursuant to a valid court order that was made on January 23, 2012.

“The merger and takeover of the bank by Access Bank Plc is lawful and valid, same having been done in good faith and in full compliance with all the relevant laws and regulations”, Sanusi argued, saying he was not in any way involved in the transactions that resulted in the said merger.

“I did not in any way act in any fraudulent manner or did anything outside the purview of my powers exercisable under the CBN Act”, he insisted.

Likewise, the CBN, through its team of lawyers led by Chief Kola Awodein, SAN, challenged the locus-standi of the plaintiffs, saying the suit was premature and statute barred by reason of section 2(a) of the Public Officers Protection Act, Cap P41, Laws of the Federation of Nigeria, 2004.

“The plaintiffs alleged fraud but failed to provide the essential particulars of fraud and this action, as presently constituted, does not disclose a cause of action against the applicant,” CBN argued.

CBN further told the court that sometime in 2011, certain shareholders of the defunct Intercontinental Bank Plc, on behalf of themselves and other affected shareholders including the plaintiffs in the instant suit, commenced an action before this court.

It said the suit was dismissed on June 11, 2013, on the grounds that it was statute barred and amounted to an abuse of court process, noting that there has been an interval of more than two years between the merger of the Bank with Access Bank Plc and the institution of the instant matter.

It will also be recalled that three persons, Mrs. Queentte Lewit Alagua, Charles Nwuba and Cyprian Nwuba, earlier applied to be joined as co-plaintiffs in the suit, an application that was vehemently opposed by Chief Uche, SAN, who accused them of “masquerading for Access Bank Plc”.

Uche had prayed the court for an adjournment to enable him to respond to Sanusi and CBN’s objections, as well as, to oppose the joinder applications.

Meantime, the plaintiffs have also prayed the court to determine “Whether the 1st defendant, acting as the Governor of the 2nd defendant, did not act fraudulently, in breach of his public office, against the public interest and contrary to the provisions of sections 12, 32, 35 and 39 of the Banks and Other Financial Institutions Act, Cap B4 Laws of the Federation of Nigeria 2004 in deliberately strangulating the banking operations and falsifying the actual financial state of affairs/solvency of intercontinental bank Plc as a ground for revoking the operating licence of and taking over the management of the said Intercontinental Bank Plc, of which the plaintiffs are shareholders, only to undervalue the said Bank to the detriment of the plaintiffs as shareholders and investors and sell the said Bank to his friends/associates/cronies in Access Bank Plc where Mr. Aig-Aigboje and Mr. Herbert Wigwe, the Managing Director and Deputy Managing Director respectively of the said Access Bank Plc, acting indebted to Intercontinental Bank Plc, to the tune of N16.2bn, to the knowledge of the 1st defendant.

“Whether in the light of the letter of the Federal Government of Nigeria dated February 19, 2014, and the report of the Financial Reporting Council of Nigeria exposing the misdeeds of the 1st defendant as Governor of the CBN, the handover of the Intercontinental Bank Plc by thr 1st defendant in questionable circumstances to Access Bank Plc is not an act of unprofessional conduct carried out in utmost bad faith which has adversely affected the rights and interests of the plaintiffs.

As well as, “Whether the 3rd defendant, as the official and apex regulator of the Nigerian Capital Market acting under her powers pursuant to section 13 of the Investments and Securities Act 2007 ought not to conduct a detailed enquiry/investigation into the circumstances relating to and connected with the sale/acquisition/take-over/transfer of the shares, assets and securities of Intercontinental Bank Plc to Access Bank Plc, in order to protect the plaintiffs as shareholders and investors of Intercontinental Bank Plc from fraudulent and unfair practices and their adverse consequences and for the maintenance of fair and orderly securities market and to protect the integrity of the securities market against all forms of abuse as occasioned herein by the 1st defendant and his friends/associates/cronies”.

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