The Lagos Division of the Federal High Court on Tuesday ordered the freezing of the Kogi State salary bailout account domiciled in Sterling Bank over a N20 billion loan obtained from the bank.
Tijjani Ringim, the judge who gave the order, said it would subsist pending the conclusion of an investigation or possible prosecution by the Economic and Financial Crimes Commission (EFCC).
The EFCC had made an ex-parte application before the judge which, according to the agency, was brought pursuant to section 44(2) of the Constitution and section 34(1) of the Economic and Financial Crimes Commission Act and under the court’s jurisdiction.
A. O. Mohammed, counsel to the EFCC, told the court that the order was necessary to stop further dissipation of the funds in the account.
According to Mr Mohammed, the N20 billion loan, meant to augment the salary payment and running cost of the state, was kept in an interest-yielding account with Sterling bank.
He added that instead of using the money for the purpose it was meant for, Sterling Bank Plc, acting on the instruction of the Kogi State Government, transferred the money from the loan account into a fixed deposit account.
He stated that Sterling Bank Plc is yet to present any credible evidence to show that the facility is well secured.
Granting the application, Mr Ringim ordered the EFCC to publish the order in a national newspaper and make a quarterly report to the court on the progress of its investigation.
The judge adjourned the matter till December 1 for the report of investigation.
The EFCC had filed a 13-paragraph affidavit in support of its ex-parte originating summons stating that the commission received “a credible and direct intelligence” which led to the tracing of funds reasonably suspected to be proceeds of unlawful activities warehoused in account No. 0073572696 domiciled in Sterling Bank, Plc with the name Kogi State Salary Bailout Account
It said the commission acted on the said intelligence and assigned same to the Chairman Monitoring Unit, where it was discovered that on April 1, 2019, the management of Sterling Bank Pic approved an offer of N20 billion bailout loan facility for Kogi State government.
According to the deponent, on June 19, 2019, the Kogi State government applied for a credit facility of N20 billion with an interest rate of 9 per cent for a tenure of 240 months from Sterling Bank Plc.
He added that the said facility was meant to augment the salary payment and running costs of the state government.
The deponent added that on June 26, 2019, the credit facility offer was accepted vide a memorandum of acceptance signed by Governor Yahaya Bello; Asiru Idris, the Commissioner of Finance; and Momoh Jibrin, Accountant-General of the state.
He stated that prior to the said loan application, the Kogi State government, through a letter to the Manager of Sterling Bank Plc, Lokoja, applied for an account opening in the bank with the name Kogi State Salary Bailout Account.
Jibrin and Elijah Evinemi, acting director of Treasury in the state, served as the signatories to the account.
“That upon the opening of the said account with No. 0072969301, Sterling bank Plc disbursed salary intervention loan to the tune of N20,000,000,000.00 to the account.
“That rather than use the intervention funds for the purpose for which it was granted, the State Government proceeded to open a fixed deposit account No. 0073572696.
“That on the 25 day of July 2019, Sterling Bank Plc acting on the instruction of the Kogi State Government transferred the money from the loan account and placed same on the aforementioned fixed deposit account.
“That the said Account sought to be frozen received the Sum of Twenty Billion Naira, (N20, 000,000,000) on the 25th July 2019.
“That as at 1st day of April 2021, the balance standing to the credit of the said fixed deposit account was N19, 333, 333, 333.36.
“That we are still tracing what the sum of N666,666,666.64 has been deducted from the said funds and was not used for the payment of the salary.
“That the Commission has the statutory mandate to prevent the Commission of economic and financial Crimes with the shores of the Federal Republic of Nigeria.
“That investigation in this matter is still ongoing and this application is pertinent to secure the funds in the said account to prevent them from being totally dissipated.
“That without freezing the nominated accounts, there is no better way of preserving res.”