The federal high court in Lagos has ordered the Kogi state’s salary bailout account domiciled in Sterling Bank Plc be frozen.
This comes after over N20 billion loan obtained from the bank supposed to be used for payment of salaries was diverted.
The EFCC had approached the court for an order in an ex-parte application brought pursuant to section 44 (2) of the Constitution and section 34(1) of the Economic and Financial Crimes Commission Act.
Counsel to the EFCC, Abass Muhammed who told the court that the order was necessary so as to preserve the ‘res’ and abate further dissipation of the funds in the account, noted that the N20 billion loan meant to augment the salary payment and running cost of the State Government was kept in an interest-yielding account with Sterling bank.
Muhammed said instead of using the money for the purpose it was meant, Sterling Bank Plc acting on the instruction of the Kogi State Government transferred the money from the loan account and placed same in a fixed deposit account. He added that Sterling Bank Plc is yet to present any credible evidence to show that the facility is well secured.
In a 13-paragraph affidavit in support of the motion, the anti-graft agency disclosed that a member of a team of investigators attached to the Lagos monitoring unit of the EFCC whose name wasn’t given in the affidavit, discovered that in June 19, 2019 fiscal year, the state government, ministry of finance and economic development, office of the honourable commissioner, applied for a credit facility of N20 billion with an interest rate of nine percent for a tenure of 240 months from Sterling Bank Plc.
It was also gathered that prior to the application for the loan, the state government had also on June 19, 2019, via a letter to the manager of Sterling Bank Plc, Lokoja, applied to open an account in the bank with the name ‘Kogi State Salary Bailout Account’, with Momoh Jubril, accountant-general of the state, and Elijah Evinemi, acting director of treasury, as signatories to the said account.
On April 1, 2019, the management of Sterling Bank Plc approved an offer of N20 billion bailout loan facility for the Kogi state government and was secured through a memorandum of acceptance signed by Yahaya Bello, Kogi governor; Asiwaju Asiru Idris, commissioner for finance, and Jibrin, the accountant-general.
The affidavit read;
“That upon the opening of the said account with No. 0072969301, Sterling bank Plc disbursed salary intervention loan to the tune of N20,000,000,000.00 to the account.
“That rather than use the intervention funds for the purpose for which it was granted, the state government proceeded to open a fixed deposit account No. 0073572696.
“That on the 25 day of July 2019, Sterling Bank Plc acting on the instruction of the Kogi state government transferred the money from the loan account and placed same on the aforementioned fixed deposit account.
“That the said Account sought to be frozen received the Sum of Twenty Billion Naira, (N20,000,000,000) on 25th July, 2019.
“That as at 1st day of April, 2021, the balance standing to the credit of the said fixed deposit account was N19,333,333,333.36.”
The EFCC also revealed that it is “still tracing the sum of N666,666,666.64”, as the missing amount was allegedly not used for payment of salaries.
Ruling on the case, Justice Tijjani Ringim granted the order to freeze the account pending the conclusion of the investigation or possible prosecution by the Economic and Financial Crimes Commission (EFCC).
The EFCC was also directed to publish the court order in a national newspaper and to make a quarterly report to the court on the progress of its investigation.
Ringim then adjourned the matter till December 1, for the report of investigation.