Nationalised Banks: CBN asks court to dismiss Bank PHB’s suit

Channels Television  
Updated March 6, 2012

The Central Bank of Nigeria (CBN), the Federal Government and Keystone bank limited have urged a Federal High Court in Lagos to dismiss a suit instituted by some shareholders of the defunct Bank PHB seeking to void the August 2011 action of the apex bank nationalising their bank.

The shareholders on behalf of Bank PHB had through their counsel, Anthony Idigbe contended that the apex Bank in nationalising their bank last year acted maliciously by singling them out for punishment without considering their investments.

In the suit, which had the CBN, the Federal government and Keystone bank Limited as defendants, the shareholders argued that the action of the apex bank was discriminatory and constitutes an abuse of its powers by nationalising the assets of Bank PHB and transferring the same to third defendant ( Keystone Bank limited).

The bank also contended that no compensation was given to its shareholders as a result of the action.

However, in three separate preliminary objections filed by Kola Awodein for the CBN, Fabian Ajogwu for the Federal Government and Khrushchev Ekwueme for Keystone Bank limited, the defendants urged the court to dismiss the action on the ground that it was not brought within the three months period stipulated by the Public Officers Protection Act.

They also submitted that the shareholders had not shown that the action by the apex bank on August 2011 was in bad faith.

The defendants further argued amongst other grounds that the Nigeria Deposit Insurance Corporation (NDIC) was the proper person to bring the action, and not the plaintiff, whose operating licence had been revoked.

In his responding to the objections, Mr Idigbe, faulted the arguments of the defendants on the issue of time limit, saying the action was brought within the three months’ time frame provided by law.

He also contented that Bank PHB had shown by its statement of claims that the CBN acted in bad faith by singling it out for punishment.

He further argued that the plaintiff and not the NDIC who can complain about the nationalisation of the former bank PHP.

On the issue on the revocation of Bank PHB’s operating licence, he said it was a substantive issue that the court cannot determine at the preliminary stage.

Ruling on the matter has been fixed for May 12, 2012 by the trial judge, Justice Charles Archibong.

The Nigeria Deposit Insurance Corporation (NDIC) last August announced revoked the operating licenses of Afribank Nigeria Plc, Spring Bank Plc and BankPHB on the bases that they have not shown capacity and ability to recapitalise before the September 30 deadline.