On Monday, 8th of May 2017, it was reported that a Federal High Court sitting in Abuja had ordered the Central Bank of Nigeria, its governor, Godwin Emefiele, and the management of Keystone Bank to discontinue the ongoing process of transferring shares to those it was supposedly sold to.
Earlier in March, it was reported that Keystone bank, which was acquired by the CBN under the leadership of Sanusi Lamido Sanusi in 2009 has been sold off. The Asset Management Company of Nigeria (AMCON) in a statement said the bank was sold to Sigma Golf Nigeria Limited and Riverbank Investment Resources Limited through a consortium known as the Sigma Golf – Riverbank consortium. According to Jude Nwauzor, AMCON’s Head of Corporate Communications, the completion of the Transaction is subject to the fulfilment of the conditions precedent as stated in the Share Sale and Purchase Agreement (SPA) executed between AMCON and the Sigma Golf – Riverbank consortium.
With the recent warning by the Federal High Court AMCON and the Central Bank will be forced to halt the sale of the bank pending when they fix the issue raised by the court.
Why was the sale halted by the court
The decision to halt the sale was taken after the court heard the counsel to the plaintiff, Wole Balogun, address the court on the failure of the governor of the CBN to obey a court order.
The Counsel to the defendants, Samuel Onah, pointed out that there was already an order of stay of proceedings.
According to the court presided over by Justice Valentine Achi, the CBN governor has to explain why he should not be committed to prison for contempt of court on account of the supervisory and regulatory power of the CBN regarding the purported sale of Keystone Bank to Sigma Golf Nig Limited and River Bank Consortium.
Justice Valentine also said that after due notice of a pending order of the court all parties are to maintain the status quo on one hand and the CBN governor is to mediate the dispute and report back to the court on the other. The case was adjourned for ruling till June 19, 2017.
This announcement would affect the plans of the investor who had already commenced the process of transition governance and announced key appointments of Umaru Modibbo as Chairman of the new Board of Directors and Hafiz Bakare as the acting Managing Director, which took effect on April 1, 2017.