Nigerian Bank Nigeria Bank PHB Plc – Judge Nullifies Bank PHBs Acquisition Of Spring Bank

Source Punch On The Web: Tony Amokeodo, 17th December 2009

The Federal High Court sitting in Lagos on Wednesday nullified the BankPHB Plc’s acquisition of the Spring Bank Plc and held that the action of the regulatory agencies – the Central Bank of Nigeria, the Securities and Exchange Commission and the Nigerian Stock Exchange – to endorse the acquisition was done in flagrant disrespect to the subsisting order of the court.

In his ruling on a suit brought by some aggrieved shareholders of Spring Bank, Justice Lambo Akanbi consequently set aside the new board and management of Spring Bank as announced in the media on September 22, 2008.

The judge further restrained the defendants from changing or taking any steps towards the changing of the name, logo and title of Spring Bank, either on its own or as member of BankPHB.

The aggrieved shareholders of Spring Bank, Chief Udensi Ifegwu and Emmanue Okorie, had filed the legal action against BankPHB and urged the court to put on hold the planned acquisition of the shares of the bank by BankPHB.

The plaintiffs had also joined Spring Registrars Limited, the Central Bank of Nigeria, Securities and Exchange Commission, the Nigerian Stock Exchange, Spring Bank and Westcom Technologies and Energy Services Limited as co-defendants to the suit.

The court had on October 2008, restrained the defendants from sanctioning the planned acquisition of the shares of Spring Bank by BankPHB pending the determination of the plaintiffs’ suit.

But shortly after the ruling was delivered, the defendants reportedly announced the acquisition of the share capital of Spring Bank by BankPHB, just as the development was said to have irked the court.

Justice Akanbi further held in his ruling on Wednesday that it was regrettable that the agencies of the Federal Government (CBN, NSE and SEC) could in total disregard for the rule of law and in a brazen show of power, proceed to deride the laudable and welcome desire of President Umaru Yar’Adua, to give to the country a lasting democracy built on a solid foundation of the rule of law by colluding with other defendants to disobey the order of the court.

According to him, the disobedience of the court order by the defendants should not only be seen as an offence directed against the personality of the judge, but as a calculated act of subversion of peace, law and order in the country.

It was not immediately clear what effect the judgement would have as the Central bank of Nigeria had appointed a new management for both banks in October after the second round of stress tests in the banking sector found the banks under capitalised and in need of a bail out.

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