Thursday, May 12, 2011

Sale of Banks: Shareholders Lose Bid to Stop CBN

Attempt by a group of shareholders of banks under the auspice of Registered Trustees of Proactive Shareholders Association of Nigeria to stop the proposed sale of some sick and distressed banks by Central Bank of Nigeria (CBN) to private investors has suffered a setback as a Federal High Court in Abuja has struck out their suit for incompetence.

Ruling on the suit, Acting Chief Judge of the Federal High Court, Justice Ibrahim Auta struck out the case and upheld the objection of the defendants that the plaintiff’s suit was grossly incompetent having been filed by a non-juristic person.

Justice Auta lambasted the counsel for the plaintiff for not taking time to cross check that the name used in the incorporation of the plaintiffs is the same name used in the commencement of the action particularly writ of summons.

He accordingly struck out the suit and ordered the plaintiff to pay to each set of defendants the cost of N10,000.
In the substantive suit filed on behalf of the shareholders by their lawyer Nnodu Okeke, the plaintiffs had sought among other reliefs, a declaration that the CBN has no powers to sell any bank in Nigeria or invite any investor to buy any bank without reference to the shareholders of the banks.

The group also sought an order stopping the proposed sale of Oceanic Bank Plc, Intercontinental Bank Plc, Afribank Plc and Union Bank Plc to private investors.

The CBN and its Governor, Mallam Sanusi Lamido Sanusi  through their counsel comprising Dr. Konyinsola Ajayi (SAN), Kola Awodein (SAN) and Chief Emeka Ngige (SAN) brought a preliminary objection challenging the competence of the action.

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