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Shareholder group drags CBN to court

By  Peter Egwuatu
A foremost shareholder group in the country, Proactive Shareholders Association of Nigeria (PSAN) on Friday filed a suit in Federal High Court, Abuja with the Central Bank of Nigeria (CBN) and the CBN Governor, Lamido Sanusi, as the first and second defendants.


According to PSAN Solicitor, Barrister Nnodi Okeke, the plaintiff is praying the court to determine whether the CBN under the Banks and Other Financial Institutions (BOFIA) has power to sell or to invite investors to buy any bank in the country without reference to the shareholders at all.He listed the affected banks as Intercontinental Bank Plc, Oceanic Bank International Plc, Union Bank and Afribank Plc.

The shareholders also prayed the court to determine if the CBN has the power to invade the banks, take over the managements and sell it to whoever it pleases without consulting the shareholders, adding that “whether by a composite reading of BOFIA and with particular reference to section 5 (4) thereof, the 1st defendants can take action pertaining to the banks mentioned without reference to the shareholders.”

It therefore sought the court to declare that the apex bank has no such powers to sell any bank in the country or invite investors to buy into the banks as stated above.

They also prayed the court to restrain the CBN from going ahead with the planned sale of the four banks. In affidavit in support of originating summons, PSAN’s National Chairman, Mr. Oderinde Taiwo, affirmed that his members have substantial shares in the affected banks, adding that, they are therefore part owners of the banks.

He chronicled the actions and efforts of the CBN to sell the four banks, stating that the defendants’ action is prejudicial to their interests and could destroy their investments in the affected banks.

It would be recalled that in a meeting with CBN, banks executives and major shareholders recently held in Abuja the stakeholders of the failed out banks agree to work with the apex bank on recapitalisation.

According to a statement signed by M. M. Abdullahi, Head Corporate Affairs of CBN, the meeting with the ten affected banks comprising their directors was to inform the stakeholders on plans for the implementation of the second phase of the on-going banking sector reforms.

The banks comprising AfriBank Plc, Bank PHB, Equitorial Trust Bank Ltd, Finbank Plc, Intercontinental Bank Plc, Oceanic Bank International Plc, Spring Bank Plc, Unity Bank Plc, Union Bank of Nigeria Plc and Wema Bank Plc were represented at the meeting by board members,management andindependent

shareholders.According to the statement, “ All stakeholders present at the meeting unanimously agreed that the board and the principal shareholders of the affected banks will collaborate with the CBN and advisors to successfully carry out the recapitalization of the affected banks. Stakeholders found the meeting

informative and acknowledged their support for the CBN reform programme. A number of stakeholders proposed that the CBN hold more of such interactive sessions with stakeholders to provide the forum for continued co-operation. Finally, the CBN informed the stakeholders that the Asset Management
Company as proposed could provide the banks with the much needed liquidity and facilitate their recovery.


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