A Federal High Court in Lagos has entered judgment in favour of the Central Bank of Nigeria in a suit questioning its alleged printing and unilateral spending of N620bn in 2009 without first obtaining the approval of the National Assembly.

The suit marked FHC/L/CS/1125/2009 was instituted by a member of the House of Representatives, Femi Gbajabiamila, who is the Minority Whip of the House.

The action followed the decision of the CBN, under its then Governor, Mallam Sanusi Lamido, to rescue eight ailing or under-capitalised banks in the country, by granting them loan or bailout.

But Gbajabiamila, through his lawyer, Seni Adio, had asked the court to determine, among other things, whether the Constitution empowered the defendants to “raise money by printing the sum of approximately N620bn, and unilaterally and in their exclusive discretion, spending the money so raised by providing funds to certain banks earmarked to receive same or any other banks without first submitting the funds raised to the National Assembly for appropriation or otherwise obtaining the approval of the National Assembly.”

The lawmaker sought a declaratory order that the defendants did not have the constitutional authority to raise and unilaterally spend funds without first securing the approval of the National Assembly.

The defendants in the suit are the CBN, its Governor and the Attorney General of the Federation.

The case, which had earlier been decided in favour of the CBN by Justice Fatima Nyako, however returned to Justice Ibrahim Buba by the Appeal Court, which set aside Nyako’s judgment and ordered fresh trial before Buba.

But ruling on the case on Monday, Buba held that the defendants had been able to effectively refute the claims by the plaintiffs, adding that such denial had rendered the prayers of the plaintiff hypothetical and the declaration sought not grantable.

One Adeteju Ajimotokan, who deposed to a 17-paragraph affidavit in support of Gbajabiamila’s originating summons, had averred that sometime between July and August 2009, the CBN appraised or audited 10 commercial banks in the country and found out that five of them, lacked adequate liquidity ratios compared to their obligations.

According to Ajimotokan, following this discovery, Sanusi had sacked the executives and managing directors of the five banks said to be under-capitalised and decided to infuse N420bn into each of the banks.

Again, the CBN embarked on an audit of a second set of banks wherein 14 banks were audited in September 2009 and three were found to be under-capitalised.

Again, Sanusi sacked the executive and managing directors of the defaulting banks and decided to raise the banks with N200bn each.

The deponent said, “Therefore, based on these two audits, the CBN intends to unilaterally infuse the sum of approximately N620bn into eight banks.”

But in its counter-affidavit deposed to by one Damilola Amore, the CBN, however, denied raising any such money.

The deponent had averred that contrary to the submission of the plaintiff, “the CBN did not raise any money by printing nor did it spend any such monies raised by printing as alleged by the plaintiff.

“The governor of the CBN did not state at any time and or insist that he has the powers to spend the Federal Government funds.”

The deponent added that what the apex bank and his then governor did was to intervene by providing Intercontinental Bank with N100bn to sustain its operations.

The deponent stated further that prior to this move, Sanusi had appeared before and secured the endorsement of various committees of the National Assembly, adding that Gbajabiamila’s suit was meant to invalidate what had been commended by the National Assembly.

In a judgement delivered on Monday, Buba held, “This court is of the firm view that the counter-affidavits of the 1st and 2nd defendants are not only as solid as the Rock of Gibraltar but the plaintiff has also not been able to refute the averments.

“This court is of the firm view that those averments, in the absence of valid denial, have put the rock off the feet of the plaintiff. Consequently, the questions for determination have become hypothetical and therefore not grantable.”

The judge therefore resolved all the issues raised in favour of the defendants and struck out the suit.

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