Court stops Imo govt accounts with CBN, 16 banks over N1.5b debt

Court stops Imo govt accounts with CBN, 16 banks over N1.5b debt

An Abuja High Court has stopped the Imo State government from withdrawing money from its account with the Central Bank of Nigeria (CBN) and 16 other banks across the Country on account of a N1.5billion debt it owed a firm, E. F. Network Nigeria Limited. Justice Bello Kawu who gave the ruling gave the affected banks 14

An Abuja High Court has stopped the Imo State government from withdrawing money from its account with the Central Bank of Nigeria (CBN) and 16 other banks across the Country on account of a N1.5billion debt it owed a firm, E. F. Network Nigeria Limited.

Justice Bello Kawu who gave the ruling gave the affected banks 14 days within which to show cause why the garnishee order nisi should not be made absolute in satisfaction of the judgment sum contained in the Supreme Court judgment.

The banks listed with the CBN are Access Bank, Zenith Bank, Jaiz Bank, Union Bank, First Bank, U.B.A, Ecobank, Keystone Bank, Diamond Bank, Fidelity Bank, Polaris Bank, GTBank, Stanbic IBTC Bank, Unity Bank, Heritage Bank and FCMB Bank.

The order was sequel to a motion ex-parte for garnishee order nisi brought by a firm, E. F. Network Nigeria Limited and Gideon Egbuchulam.

The garnishee proceedings followed the judgment of the Supreme Court delivered on March 8, 2019, which ordered the Imo State government to pay E. F. Network and Egbuchulam N1.5b as a debt arising from the contract executed for the government.

The judge ordered that all money held by the state in its accounts with all the listed banks, should be attached for the purpose of satisfying the judgment of the Supreme Court delivered on March 8, 2019 (which affirmed the concurrent judgment of the Court of Appeal and the High Court of Imo State).

Meantime, the matter has been adjourned to May 3 for the banks to show cause and for hearing on whether or not the garnishee order should be made.

The debt was incurred during the administration of former Governor Ikedi Ohakim, which the Rochas Okorocha administration succeeded. It had contracted E. F. Network for the implementation of the state government’s Clean and Green Initiative, in pursuit of which the firm was awarded a contract to supply 10 million refuse bags and 40,000 plastic rolling containers at N42 per bag and N20 per plastic container.

By the contract, the Imo State governor and others, listed as appellants in the appeal, guaranteed payment through an irrevocable mandate of the payment of N35million monthly to the contractor.

It was found that after the execution of the contract, the Imo State government kept to the agreed schedule of payment for 12 months and subsequently stopped, leaving an outstanding balance estimated at N800m.

In a bid to recovered what the Imo State government and its agencies owed it, the firm sued at the High Court of Imo State, which gave judgment in its favour on February 11, 2014 and ordered the defendants to, among others, pay the firm N1b, a judgment the Imo State governor and others appealed at the Supreme Court and lost on March 8, 2019.

In its March 8, 2019 judgment, the Supreme Court, besides upholding the N1b awarded against the state by the trial court, which the Court of Appeal affirmed, awarded N500,000 cost against the appellants.

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