The Central Bank of Nigeria (CBN) has urged the Federal High Court in Abuja to dismiss a forfeiture case brought by the Economic and Financial Crimes Commission (EFCC) against a N2.7 billion property (located at Plot 781, Cadastral Zone 001, Karmo District) used as collateral to secure a loan from the apex bank through the Nigeria Incentive-Based Risk Sharing System for Agricultural Lending (NIRSAL).
CBN’s lawyer, Joseph Abah, told Justice Emeka Nwite on Thursday that the apex bank had filed court documents seeking to join the EFCC case and argue for its outright dismissal through its proposed counter-affidavit and written address to show cause.
Nairametrics reports that the legal dispute arose after the EFCC, on August 8, 2024, filed an originating motion ex parte requesting the court’s approval for the interim attachment/forfeiture of Plot 781, Cadastral Zone 001, Karmo District, Abuja.
The EFCC legal team also sought a court order authorizing the anti-graft agency to appoint a competent person or firm to manage the asset temporarily forfeited to the federal government pending the conclusion of investigations and possible prosecution of Toks Properties Limited.
Justice Nwite had, on September 3, 2024, granted the EFCC’s request while prohibiting any disposal, lease, sale, or mortgage of the property in line with the agency’s application.
What transpired in court
At the resumed hearing on Thursday, the CBN lawyer and another lawyer representing Salis Ventilated Homes Limited stated that they had separately filed applications to join as parties (defendants) in the EFCC forfeiture case.
- In the CBN’s court filings seen by Nairametrics, the apex bank argued that it is responsible for the monitoring and regulation of banks and all banking activities in Nigeria.
- The CBN legal team, including Abah, stated that sometime in 2020, the CBN, through NIRSAL under its Anchor Borrowers’ Programme (ABP), granted a loan of N3,872,882,250.00 to Sadolen Interworld Limited to finance rice production.
- According to the CBN, the loan had a tenor of 12 months and was secured by a third-party collateral belonging to Messrs Toks Properties Limited, which served as surety for the loan transaction.
“The said collateral (property), which is located in the Karmo District of the Federal Capital Territory, is valued at N2.7 billion,” the CBN stated.
The apex bank added that during the loan transaction, the surety executed a Deed of Legal Mortgage in favor of the CBN through NIRSAL, and the original title document of the collateral was deposited and handed over to NIRSAL.
Additionally, the CBN explained that the surety executed an undertaking not to alienate, sell, or transfer the property without the prior written approval of the CBN through NIRSAL.
- The apex bank stressed that “the loan sum has not been discharged, and the subject property remains the security for the mortgage,” maintaining that the CBN has an equitable interest in the property.
- The bank, therefore, asked the court to allow it to join the case as a defendant so it could present its arguments through its proposed counter-affidavit and affidavit to show cause.
The CBN further submitted, through its affidavit to show cause, that the court cannot grant a forfeiture order over the property, as doing so would prejudice the legal and equitable rights of the CBN, which retains the right to hold the property until the loan is fully discharged.
“We urge the Honourable Court to resolve the sole issue in favor of the respondent (CBN), set aside the interim forfeiture order, and dismiss the instant suit (by the EFCC) for want of jurisdiction,” the CBN stated in its court filings.
Justice Emeka Nwite asked the CBN lawyer whether he had served the EFCC legal team with the court processes, to which Abah responded in the affirmative.
- The EFCC legal team informed the judge that they had received the CBN’s documents that day and would need time to file a formal response.
- The EFCC maintained that the anti-graft agency merely sought to preserve the property pending the outcome of its financial crimes investigation against the parties involved.
- After hearing from both sides, Justice Nwite adjourned the case to May 21, 2025, for the hearing of all pending applications related to the property temporarily forfeited to the federal government.
What This Means
The outcome of this case will have significant implications for both the regulatory and monitoring powers of the CBN and the scrutiny of financial transactions by anti-graft agencies.
