9 July 2012

Nigeria: Court Winds Up Afribank, Spring Bank

Justice Charles Archibong of the Federal High Court in Lagos has ordered the winding up the defunct Afribank Nigeria Plc and Spring Bank Plc.

The judge after listening to Mr. Ayodeji Arowolo from the law firm of Olaniwun Ajayi LP, held that since the licences of the two banks have been revoked by the Central Bank of Nigeria (CBN) and properly gazetted, there was no need for their existence.

It would be recalled that 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 Central Bank of Nigeria (CBN) revoked the licence 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 up petitions dated November 22, 2011 to wind up the three banks.

The said Section 40 stipulates that: "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."

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 Friday, December 30, 2011.

So far, only two out of the three banks have been wound up by the order of court.

A fresh petition has been filed to wind up Bank PHB. This according to Arowolo, is awaiting a hearing date.

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