Tuesday, 20 October 2015

N3bn debt: Court freezes Zamfara’s accounts in 21 banks

A Federal High Court in Lagos on Tuesday barred the Zamfara State Government from withdrawing funds from its accounts in 21 banks in the country.

Justice Okon Abang ordered all the banks involved to disclose the amount of money which the state had in its accounts with them.
He ordered the 21 banks to appear before him on November 6, 2015 to give reasons, if they have any, why such funds should not be withdrawn to defray a debt of N3.1bn with interest, which Zamfara State owed Ecobank Nigeria Limited.
Abang had on September 30, 2015, entered judgment in favour of Ecobank in a N3.1bn debt recovery suit the bank filed against Zamfara State Government and six others.
The judge had granted the bank’s claim of N3.1bn with 30 per cent interest from March 1, 2013 till judgment day and 10 per cent thereafter until the final liquidation of the debt.
In the said judgment, Abang said the papers before him showed that Zanfara State obtained a credit facility in sum of N1.5bn in 2009 from the defunct Ocean Bank Plc, which was later acquired by Ecobank.
The judge said Zamfara State neither denied being indebted to the bank nor proved that it had liquidated the loan, which it obtained to execute a water project.
He then ordered the Accountant-General of the Federation to ensure that the judgment sum, with interest, was deducted from funds accruable to Zamfara State in the Federation Account and to pay it to Ecobank until the debt was fully liquidated.
But both Zamfara State and the CBN went on an appeal and subsequently urged Abang to stay execution of the judgment pending the determination of the appeals.
In a ruling on Tuesday, however, Abang dismissed both applications and asked Ecobank to proceed with the process of recovering the debt from Zamfara State.
Ruling on the CBN application, the judge said, “I have been wondering how the order will affect the CBN so that the CBN will now go and apply for a stay of execution of not just the order made against it but the entire judgment.
“It is my humble view that CBN will not lose anything if the order is complied with.
“The Central Bank should assist Ecobank in its time of need because if Ecobank’s liquidity is affected on account of non-payment of loan by Zamfara State, it is the same CBN that will withdraw Ecobank’s licence; and it is the innocent depositors that will be affected if the licence of Ecobank is withdrawn by the CBN.”
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