After accusing 7 commercial banks of illegally withholding government funds, that were meant for the Treasury Single Account (TSA), the federal government has made a U-turn withdrawing the case against them citing public interest.

The government had late last month accused UBA, Diamond bank, Skye bank, First Bank, Fidelity bank, Keystone bank and Sterling bank of allegedly withholding the sum of $793 million funds $364 million was allegedly hidden with UBA, $41 million with Skye Bank, $277.9 million with Diamond bank, $18.9 million with UBA, $24.5 million with Fidelity bank and $17.5 million with Keystone bank. The Nigerian National Petroleum Corporation (NNPC) and several of the banks issued statements denying the allegation.

Lawyer representing the government, Professor Yemi George Akinseye-George said he had been instructed to explore settlement with the banks in view of public interest. Lawyers representing several of the banks have however asked for damages to be paid by the federal government.

Why the banks want damages

The banks are asking for damages (which is monetary compensation) due to the reputational damage the case has caused them and costs incurred. The banks would also have briefed (paid lawyers) to handle the case for them, possibly running into billions of Naira. Government agencies, that hitherto did business with them, may decide to shut down their accounts with them to avoid being accused of withholding TSA funds.

Lessons for the government

The Federal Government should have done a thorough investigation before going to court. This is not the first time government or its agencies will take agencies to court based on charges that are later struck out. There are appears to be a lack of coordination between government agencies, as a simple clarification could have been sought from the agencies that held the funds, before going to court.

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