CBN Asks Court To Dismiss EFCC’s Forfeiture Bid Against N2.7bn Collateral Property

CBN Asks Court To Dismiss EFCC’s Forfeiture Bid Against N2.7bn Collateral Property

The Central Bank of Nigeria (CBN) has urged the Federal High Court in Abuja to dismiss a forfeiture case filed by the Economic and Financial Crimes Commission (EFCC) against a N2.7 billion property (located at Plot 781, Cadastral Zone 001, Karmo District) used as collateral for a loan secured through the Nigeria Incentive-Based Risk Sharing System for Agricultural Lending (NIRSAL).

Joseph Abah, counsel for the CBN, informed the court that the apex bank had filed documents requesting to join the EFCC’s case and seek its dismissal through a counter-affidavit and a written address to show cause.

The dispute arose when the EFCC filed an originating motion ex parte on August 8, 2024, requesting the court’s approval for the interim attachment/forfeiture of the Karmo District property.

The EFCC also sought a court order to appoint a qualified person or firm to manage the asset temporarily forfeited to the federal government, pending investigations and possible prosecution of Toks Properties Limited.

On September 3, 2024, Justice Emeka Nwite granted the EFCC’s request, prohibiting the disposal, lease, sale, or mortgage of the property in line with the agency’s application.

During the resumed hearing on Thursday, lawyers representing the CBN and Salis Ventilated Homes Limited announced they had separately filed applications to join as parties (defendants) in the EFCC forfeiture case.

In its filings, the CBN argued that it is responsible for regulating and overseeing all banking activities in Nigeria.

The CBN legal team explained that in 2020, the apex bank, through NIRSAL’s Anchor Borrowers’ Programme (ABP), granted a loan of N3,872,882,250.00 to Sadolen Interworld Limited for rice production. The loan, with a tenor of 12 months, was secured by a third-party collateral owned by Messrs Toks Properties Limited, which acted as the surety for the loan.

The CBN stated that the collateral, located in Karmo District, was valued at N2.7 billion. The surety executed a Deed of Legal Mortgage in favor of the CBN through NIRSAL, and the original title document of the property was deposited with NIRSAL. Additionally, the surety agreed not to sell, transfer, or alienate the property without prior approval from the CBN through NIRSAL.

The CBN further emphasized that the loan had not been repaid, and the property remained the security for the mortgage, giving the bank an equitable interest in the property. Therefore, the CBN sought to join the case as a defendant and present its arguments through a counter-affidavit.

Through its affidavit to show cause, the CBN argued that granting a forfeiture order over the property would undermine its legal and equitable rights, as the bank retains the right to hold the property until the loan is fully discharged.

“We urge the Honourable Court to resolve this matter in favor of the respondent (CBN), set aside the interim forfeiture order, and dismiss the EFCC’s suit for lack of jurisdiction,” the CBN stated.

Justice Nwite inquired whether the CBN lawyer had served the EFCC legal team with the court documents, to which Abah confirmed. The EFCC’s legal team acknowledged receipt of the documents and requested time to file a formal response.

The EFCC clarified that its intention was merely to preserve the property pending the conclusion of its investigation into financial crimes involving the parties.

After hearing arguments from both sides, Justice Nwite adjourned the case to May 21, 2025, for the hearing of all pending applications related to the property temporarily forfeited to the federal government.