$793.2m TSA scam: Federal Government withdraws suit against Diamond, Skye, Fidelity, other banks

The Federal Government, on Tuesday, at the  Federal High Court sitting in Lagos filed an application seeking to withdraw its suit against seven banks accused of violating the Treasury Single Account (TSA) policy.
The seven banks are Diamond Bank, United Bank for Africa (UBA), First Bank, Skye Bank, Fidelity Bank, Sterling Bank and the defunct Keystone Bank (now Heritage Bank).
The Federal Government had alleged that the banks connived with some government agencies to illegally conceal $793.2 million meant to have been transferred to the TSA domiciled in the Central Bank of Nigeria (CBN).
The government had in the suit alleged that $367.4 million was illegally hidden by three government agencies in UBA, while $41 million was illegally kept in a NAPIMS fixed deposit account with Skye Bank.
Another $277.9 million was allegedly hidden in Diamond Bank, $18.9 million in First Bank, $24.5 million in Fidelity Bank, $17 million in Keystone Bank and $46.5 million was kept in Sterling Bank.
The funds were alleged to be revenues, donations, transfers, refunds, grants, taxes, fees, dues, tariffs etc accruable to the Federal Government from ministries, departments and agencies.
Justice Chuka Obiozor had on July 20 granted an interim order in favour of the Federal Government, directing that the seven banks should temporarily remit the funds to the TSA.
The court then adjourned until August 8 for the banks to show cause why the interim order should not be made permanent.
At resumed proceedings on Tuesday, counsel to the Federal Government, Prof. Yemi Akinseye-George (SAN), said he had been instructed by the Attorney-General of the Federation to discontinue the case in the “overall interest of the public”.
Urging the court to strike out the suit, Akinseye-George said: “It is not out of weakness that the Federal Government is withdrawing this case; the banks are corporate citizens and we are interested in the well-being of everybody.”
However, the banks through their counsel, claimed that the Federation Government’s allegation against them was false.
They noted that they had already been unjustly disparaged and urged the judge not to merely strike out the suit but to dismiss it and award at least N20 million cost against the Federal Government.
The banks said that any case struck out could be re-filed while a case that is dismissed could no longer be re-filed.
Counsel to the banks, including Mr Seyi Sowemimo (SAN) and Mrs Abimbola Akeredolu (SAN), took turns to argue that the proper order that the court ought to make in the circumstances of the case was to dismiss the suit and not strike it out.
In her submission,  Akeredolu, representing Sterling Bank Plc, said that the Federal Government decided to withdraw the case having realised that it was filed in error.
“My Lord should not allow the instrumentation of the law to be used as a vehicle of mischief and nobody is above the law, even the Federal Government of Nigeria.
“We are praying the court to  make an order for a meagre cost of N10 million against the plaintiffs,” Akeredolu said.
Counsel to Keystone Bank, Mr Babatunde Ogungbamila, however, insisted on a cost of N20 million against the Federal Government, saying his client had suffered a substantial damage to its reputation.
“They have destroyed the reputation of our banking industry and they did this recklessly because the fundamental economic underpinning of this country was actually targeted.,”
Countering their arguments, Akinseye-George argued that the parties had yet to join issues because the Federal Government had yet to respond to the court processes filed by the banks.
He added that the Federal Government came to court early enough before the maturation of time to argue on the substantive suit.
Akinseye-George added that the banks were not entitled to any cost because they did not file any affidavit to particularise the nature of the damage they claimed to have suffered.
He urged the court to discountenance their arguments and strike out the suit as prayed by the Federal Government rather than dismiss it.
“The suit is not being withdrawn because it lacked substance or baseless but because it was in the overriding interest of the public to do so,” Akinseye-George said.
Justice Obiozor adjourned the case until August 9 for ruling.