By Omoh Gabriel, Business Editor
LAGOS — Investors who put their money in any of the rescued banks may be doing so at their peril, going by the series of court action a number of shareholders have instituted against the CBN on its take-over of these banks.
Dr. Eze Nwabaraji, who is a lawyer, a fund manager as well as an investment banker, in an interactive session two weeks ago told Vanguard editors that if the shareholders were in court to contest CBN action, any investor who puts his money in any of the banks without a court judgment giving the right of ownership of the banks to CBN would be doing so at their peril.

He said no right-thinking investor or portfolio manager would risk funds entrusted to them to invest in an institution that is clouded with litigation.

This might have informed the U-turn of the CBN on the sale of the banks as the apex bank on Friday said shareholders would have the final say in the  recapitalisation of the rescued banks.

According to Nwabaraji, “if shareholders  are in court, legally if you buy them, you buy them at your own peril. If you are in court, the CBN  governor’s statement is not going to make the asset toxic.

If it is an asset that is in court, and if your lawyers are involved, the first thing they will get is a declaratory judgment from the court to bar anybody from proceeding to sell the asset and if you are using your own money to buy these assets, you will not want to touch them when they are clouded by legal issues.

“I do not believe that the CBN governor has the power to say that asset X that is in court is toxic.

We might be making this statement and again, that goes to the credibility of whoever is making that statement. Does he know what he is saying