A Federal High Court has asked CBN to stop the sale of Keystone Bank

The Governor of the Central Bank of Nigeria (CBN) and its Governor, Godwin Emefiele, may be treading a fine line with the sale of Keystone Bank to Sigma Golf Nigeria Limited and Riverbank Investment Resources Limited consortium.

Here is why

• This is as a Federal High Court in Abuja has restrained the Governor of the Central Bank of Nigeria, CBN, Godwin Emefiele, and the management of Keystone Bank from the transfer of the bank’s shares and requested Emefiele to defend why he should not be detained over the failure of the CBN to obey a court order.
• According to Vanguard, Justice Valentine Achi, who presided over the court, wondered why the CBN went on with the sale of Keystone Bank when another court had ordered that all parties maintain the status quo on one hand and the CBN governor to mediate the dispute and report back to the court on the other. Rather than obey court order, the CBN had gone on with the proposed sale.
• Thus, the court asked the CBN governor to explain why he should not be committed to prison for contempt of court on account of the supervisory and regulatory power of the CBN regarding the purported sale of Keystone Bank to Sigma Golf Nigeria Limited and River Bank Consortium.
• Similarly, the new owners may have to wait a while longer before obtaining the shares of the former Keystone Bank as the Court has restrained the CBN from transferring the Keystone Bank’s shares to the new owners.

It will be recalled that one year after Sterling Bank cancelled its proposed purchase of Keystone Bank, the Asset Management Corporation of Nigeria (AMCON) sold Keystone Bank Limited, the last of the three nationalized banks to a consortium of local investors; Sigma Golf Nigeria Limited and Riverbank Investment Resources Limited on March 20, 2017.

The new owners almost immediately commenced the process of transition governance and announced key appointments of  Umaru Modibbo as Chairman of the new Board of Directors and Hafiz Bakare as the acting Managing Director, both of which took effect on April 1, 2017. Before then, the bank has been run by an AMCON-appointed board headed by Mr. Philip Ikeazor as Managing Director and Chief Executive Officer of the bank. This ruling will, however, be a big blow to the investors’ plans.