A former Minister of Petroleum, Chief Don Etiebet, has asked Justice Mohammed Liman of a Federal High Court in Lagos to nullify the merger between Access and Diamond Banks over alleged non-disclosure of vital information. The two banks, Securities and Exchange Commission (SEC) as well as the Central Bank of Nigeria (CBN) were joined as co-respondents in the suit.
In an affidavit in support of the motion on notice deposed to by the applicant (Etiebet), it was averred that prior to the commencement of the merger, the 1st respondent (Access Bank) and two of its Directors were being investigated by the police in an allegation bordering on forgery of a Bill of Lading, obtaining money by false pretence and conspiracy to commit felony.
The deponent said the bank hid the financial fraud cases it has from both the CBN and SEC, saying if the regulators had got wind of the case which the bank had hidden from them while seeking their approval, they would not have given approval for the merger. He further averred that his decision to seek the nullification of the merger was sequel to the provision of Section 127 of the Investment and Securities Act 2007, which states that “the Commission may revoke its own decision to approve or conditionally approve a small, intermediate or large merger, if the decision was based on incorrect information for which a party to the merger is responsible and the approval was obtained in deceit.”
Etiebet, who is a shareholder in Access Bank had, last month, petitioned SEC on his position against the merger based on the fraud case his company has against the bank, including another one in Ogun State involving a steel company. In his petition, dated March 19, 2019, he averred that his decision to seek the nullification of the merger was in pursuant to the provision of Section 124 (3) of the Investment and Securities Act 2007 which “empowers any person to voluntarily file any document, affidavit, statement or other relevant information in respect of the merger.” In the petition, Etiebet drew the attention of SEC to the fact that Access Bank and its Managing Director, Herbert Wigwe and other Executive Directors are currently facing criminal charges before the High Court in Shagamu, Ogun State and the High Court in Ikeja, Lagos. He also stated the import of the case in Ikeja with charge number ID/8795/2019 bordering on conspiracy, fraud, stealing, obtaining by false pretences and forgery.
The former minister stated that the bank had surreptitiously omitted and failed to disclose the pendency of the criminal charges having known that doing otherwise would have led to SEC and CBN declining approval of the merger. He had, in the petition, requested SEC to revoke the approval-in-principle and cancel the merger given the power it derives from the Section 127 (2) of the Investment and Securities Act 2007. The court had fixed hearing of the substantive suit for 7th May, 2019 after declining to grant a motion for interlocutory injunction against the merger. Justice Liman held that the motion for injunction was not ripe for hearing because with the merger entity having commenced operation on April 1, 2019, it was “better to adjourn the matter for hearing of substantive suit.” It would be recalled that the management of the two banks had, last year December, went into a merger process which was formalized on April 1, 2019, with the launching and unveiling of the new logo of the merged banks after the final approval from CBN and SEC.