By Babajide Komolafe

The legal suit instituted by Progressive Shareholders Association has suffered a major setback as the Federal High Court sitting in Lagos declared that the action of the plaintiffs was unsustainable.

In his ruling on July 9, 2012, in Lagos, Justice Achibong upheld the preliminary objection of the Central Bank of Nigeria (CBN) through its counsel, that the plaintiffs had no right of action to institute the suit against it and that they also lack the locus stand to institute or maintain such action.

The CBN counsel who raise the preliminary objection to the effect that having regard to the true and proper meaning of section 53(1) of the Banks and other Financial Institution Act (BOFIA), also argued that the condition precedent to the jurisdiction of the court to entertain the suit was not fulfilled and as such, the case was not properly commenced.

Meanwhile, the shareholders association led by Boniface Okezie had approached the court and sought for declaration that the action of the CBN and NDIC in purporting to transfer the assets, businesses and operations of former Afribank PLC, Bank PHB and Spring Bank to Mainstreet Bank Limited, Keystone Bank Limited and Enterprise Bank Limited respectively is a breach of the fundamental human right of the plaintiffs to freedom from compulsory acquisition of property as guaranteed under section 44(1) of the constitution. They also averred that the action of the CBN and NDIC is injurious to the interests of the plaintiffs, unlawful, null and void of any effect whatsoever.

The statement of claim by the plaintiffs also sought for perpetual injunction restraining the bridge banks, NDIC and AMCOM from further dealing in or operating the assets, businesses of the erstwhile Afribank, Bank PHB and Spring Banks.

The Progressive Shareholders Association had equally sought the court’s order among other to grant the affected banks to a period of six months within which to recapitalize or attain any requisite level of recapitalization as determine by the court of any interference from the CBN or its Governor.