A FEDERAL High Court, Lagos, has ordered the winding down of Afribank Nigeria Plc and Spring Bank Plc.
Justice Charles Archibong gave the order after listening to the arguments of Ayodeji Arowolo from the law firm of Olaniwun Ajayi.
The court held that since the licences of the two banks have been revoked by the Central Bank of Nigeria (CBN) and properly gazetted, there was no need for their existence.
By a notice dated August 8, 2011, and published as Government Notice No. 140 in the official gazette of the Federal Government No.63 Volume 98, the Governor of the CBN revoked the licences of Afribank Nigeria Plc, Bank PHB and Spring Bank Plc. .
Further to the revocation, the Nigerian Deposit Insurance Corporation (NDIC) acting pursuant to Section 40 of the NDIC Act 2006, filed winding down petitions dated November 22, 2011, to wind down the three banks. .
The said Section 40 stipulates: “Whenever the licence of an insured institution is revoked by the Central Bank of Nigeria, the corporation shall act as liquidator of such failed insured institution with powers conferred on a liquidator under the Companies and Allied Matters Act, 1990 and shall be deemed to have been appointed a provisional liquidator by the Federal High Court for the purpose of that Act.”
Subsection (2) of the same section reads: “Immediately following the publication in the gazette of the revocation of the licence of a failed insured institution, the corporation shall apply to the Federal High Court for an order to wind down the affairs of the failed insured institution.” .
On November 23, 2011, an order of court was obtained to serve the petitions by substituted means, to wit: advertising in the national daily. .
In compliance with this order, the petitions were advertised in the THISDAY Newspaper of December 30, 2011. .
So far, only two out of the three banks have been wound down by the order of court. A fresh petition has been filed to wind down Bank PHB.
