By TAIYE AGBAJE

The Central Bank of Nigeria (CBN) and Nigeria Deposit Insurance Cooperation (NDIC), on Monday, challenged the jurisdiction of the Federal High Court in Abuja to hear a suit jointly filed by Aso Savings & Loans Plc and Union Homes Savings & Loans Plc over their licence revocation.

CBN’s lawyer, Onyeka Ezeah, and NDIC’s counsel, Abubakar Shehu, raised the objection before Justice Emeka Nwite shortly when the case was called for defendants to show cause.

The News Agency of Nigeria (NAN) reports that Justice Nwite had, on Dec. 29, declined to grant a motion ex-parte filed by Aso Savings and Union Homes seeking to stop the CBN and NDIC from taking further actions over the recent revocation of their operating licences.

The judge, in a ruling on the plaintiffs’ ex-parte motion moved by their lawyer, Joseph Silas, rather held that the interest of justice would be better met by putting the defendants on notice to show cause why the relief should not be granted.

The judge then adjourned the matter until Jan. 5 for the defendants (CBN and NDIC) to show cause.

When the matter was called on Monday, Silas informed the court that case was fixed for defendants to show cause.

The lawyer told the court that the CBN served on them an affidavit to show cause, a notice of preliminary objection and a counter affidavit to their originating summons.

He added that earlier in the morning, the NDIC served them with a counter affidavit and a preliminary objection.

Silas, however, restated that today’s hearing was for the defendants, especially the NDIC, to show cause why their application should not be granted.

He said from what the NDIC served on them, the agency had not shown any cause.

He said though the CBN revoked their licences, they still have within 30 days to appeal against the apex bank’s action, hence, the need to restrain NDIC from liquidating the two mortgage financial institutions until the hearing and determination of the substantive suit.

The lawyer argued that if the NDIC was allowed to liquidate the plaintiffs and in the final decision, the court found that the CBN’s action was unlawful, his clients would have been prejudiced.

He, therefore, sought an application for parties to maintain a status quo pending the determination of the matter.

But Ezeah vehemently opposed Silas’ application.

According to her, counsel for the plaintiffs is already delving into the issue with such application.

“We have a matter of jurisdiction here,” she said.

Ezeah, who described jurisdiction as “the life wire of a case,” argued that this had to be settled first.

Citing a 2022 case between Waziri and PDP, the lawyer said the Supreme Court held that issues of jurisdiction should first be decided before any other matter.

Shehu, who appeared for NDIC, aligned with Ezeah’s submission.

He insisted that the corporation was acting in accordance with its statutory power.

The lawyer told the court that they had equally filed a preliminary objection and that the application was ripe for hearing.

“What should be done now is to adjourn for a date to allow counsel for the plaintiffs to respond so that our applications can be heard,” he said.

Responding, Silas said that while the case is pending, the NDIC is still carrying on with its action of liquidation.

“All we are action for is for parties to stay action,” he said, citing a case of Savannah Bank to back his argument.

Shehu, however, said that the court is aware that as soon as licences of financial institution are revoked, the NDIC is empowered to take over in the interest of the depositors.

But Silas explained that law gives the plaintiffs a 30-day window to challenge the CBN’s actions but that the NDIC “is only predicating its actions on the CBN.

“So they should allow the plaintiffs because the plaintiffs will surely succeed.”

The lawyer also argued that their application is in the interest of the depositors “because the only amount NDIC can pay to a depositor is the sum of N2 million, even if the depositor had N1 billion with the plaintiffs.”

Shehu said the NDIC’s action became necessary because the depositors were unable to access their funds any longer.

He said what the shareholders of the plaintiffs could do in the event they won the case was to sue for damages.

“And that is what they are entitled to if they succeeded at the end,” he said.

Justice Nwite, however, asked Silas if it would be fair to make any order when the defendants had filed preliminary objections challenging the jurisdiction of the court.

“What we are trying to do is to preserve the res my lord,” the lawyer responded.

“I don’t want to embark on exercise in futility and that is why I am being careful,” the judge said.

Justice Nwite, who described jurisdiction as a threshold of a case, adjourned the matter until Jan. 21 for hearing of the defendants’ preliminary objections.

NAN reports that Aso Savings, Union Homes, Ridhwan Hamza and Ismaila Adamu are 1st to 4th plaintiffs respectively in the suit marked: FHC/ABJ/CS/2776/2025.

The plaintiffs had sued the CBN and NDIC as 1st and 2nd defendants.

In the ex-parte motion, dated Dec. 22 but filed Dec. 23 by Silas, they sought two reliefs.

“An order of this honourable court restraining the defendants/respondents from taking further steps on the purported revocation of the operational licence of the 1st and 2nd plaintiffs, pending the hearing and determination of the motion on notice.

“An order of this honourable court barring the defendants/respondents from enforcing their unlawful decision in any way, form or manner, against the 1st and 2nd plaintiffs/applicants, pending the hearing and determination of the motion on notice.”

Given four-ground argument, the lawyer argued that the CBN did not follow the condition precedent to the invocation of its power to revoke the operating licence of the 1st and 2nd plaintiffs/applicants.

Silas submitted that the NDIC also had, without allowing the two mortgage institutions to exhaust their rights of action, moved to curtail such rights by attempting to take over the 1st and 2nd plaintiffs/applicants.

“That if the defendants/respondents are not restrained, they will impose upon the plaintiffs/applicants their unlawful decisions in an irreversible way.

“That it is necessary to restrain the defendants/respondents from taking any other step in the interest of justice,” the lawyer said.

In the affidavit in support of the motion ex-parte, Ridhwan Hamza, an Aso Savings Shareholder and the 3rd plaintiff in the suit, acknowledged that the institutions had operational challenges which were within the knowledge of the CBN.

He averred that the CBN, without carrying out any measure to intervene on the failures of the plaintiffs, gave Aso Savings an ultimatum to meet its minimum capital requirement “by ensuring that all share reconstruction activities are concluded in a manner that fully address the capital shortfall not later than Aug. 31, 2025.”

Hamza said: “I know that notwithstanding the positive updates made to the 1st defendant/respondent by the plaintiffs/applicants, on Dec. 16, 2025 in a press release titled, ‘Revocation of the Operational Licenses of Aso Savings and Loans Plc and Union Homes Savings and Loans Plc.

“The first defendant/respondent, relying on Section 12 of BOFIA 2020 and Section7.3 of its Revised Guidelines for Mortgage Banks, revoked the license of the plaintiffs/applicants.

“I know that the 1st defendant/respondent grounded its decision on:

“Failure to meet the minimum paid-up share capital requirement for the category of the bank licence granted to the plaintiffs/applicants

“Having insufficient assets to meet its liabilities.

“Being critically undercapitalized with a capital adequacy ratio below the prudential minimum ratio as prescribed by the 1st defendant/respondent; and

“Failure to comply with several directives and obligations imposed upon the plaintiffs/applicants by the 1st defendant/respondent.”

He, however, said that the CBN was aware of all the steps and progress made by the Aso Savings in raising its minimum capital requirement, with absolute success.

He said CBN did not act in public interest when it made the press release revoking the operational license of the two institutions, without following the requirement of Section 34 (4) of the Banks and Other Financial Institutions Act, 2020.

According to him, the action of the 1st defendant/respondent was arbitrary, rash unreasonable and runs contrary to public policy of developing the Nigerian economy, creating jobs and encouraging investments.

Hamza said the NDIC had sent out messages to Aso Savings’ customers “asking them to fill out an online claims form against the plaintiffs/applicants, even as the law allows the plaintiffs/applicants a window of 30 days to challenge the actions of the 1st defendant/respondent.

“I know that the steps taken by the 2nd defendant/respondent are aimed at extinguishing the right of the plaintiffs/applicants to challenge the actions of the 1st defendant/respondent by immediately commencing liquidation process.

“I know that the plaintiffs/applicants have constitutional rights to be heard fairly and to challenge the actions of the defendants/respondents.”

He said that the defendants would not be prejudiced by the granting of the application and that it was just, equitable and within the law that the application be granted.

NAN had, on Dec. 16, reported the revocation of the operating licences of Aso Savings and Loans Plc and Union Homes Savings and Loans Plc by the CBN. (NAN)

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