Economic and Financial Crimes Commission (EFCC) secured a court order against Sterling Bank Plc.
The court order mandated the bank to freeze an account belonging to the Kogi State Government over a N20 billion bailout loan approved by the Central Bank of Nigeria (CBN).
About The Bailout Fund
Kogi State Government, under the leadership of Yahaya Bello, secured President Muhammadu Buhari’s approval of a bailout loan in July 2019. The fund was, accordingly, disbursed by the CBN through Sterling Bank Plc.
Gatekeepers News gathered that the bank, on July 23rd 2019, disbursed the loan using the Bailout loan account No 0073522756. The fund was after that moved to the Salary Accounts of the State for the payment of Arrears of Salaries and allowances owed to the workers of the State.
What Happened?
Last week, there were media reports that the anti-graft agency alleged that the State Government converted the bailout funds for salary payment into a fixed deposit investment to generate interest.
Part of the 13-paragraph affidavit tendered in court by the EFCC counsel, A. O. Mohammed, reads: “That upon the opening of the said account with No. 0072969301, Sterling bank Plc disbursed salary intervention loan to the tune of N20,000,000,000.00 to the account.
“That rather than used the intervention funds for the purpose for which it was granted, and the State Government proceeded to open a fix deposit account No. 0073572696.
“That on the 25th day of July 2019 Sterling Bank Plc acting on the instruction of the Kogi State Government transferred the money from the loan account and placed same on the aforementioned fixed deposit account.”
Kogi Government’s Reaction
The Kogi State Government denied the entire claim by the EFCC as the State Ministry of Finance, Budget and Economic Planning wrote to the Sterling Bank Plc to clear itself of any wrongdoing.
The Ministry, in a letter dated September 1, 2021, and signed by the Commissioner of Finance, Asiwaju Asiru Idris; Accountant General Momoh Jibrin; and Permanent Secretary Elijah Evinemi, directed the Bank to provide: “certified true copy of statements of accounts of the salary Bailout account from inception.
“Details of other accounts maintained by the State with the bank and their balances as of 31st August 2021.
“The Account Opening mandate and the loan documents and all withdrawal instructions on the Bailout account.”
Sterling Bank’s Position
In response, Sterling Bank Plc, in a letter seen by Gatekeepers News, said: “We are equally surprised and dismayed at the media’s narration of the events surrounding the transactions referenced and are disheartened at the characterisation implied in these narrations.
“As an ethical and law-abiding organisation, we are confident that our conduct on these accounts and related transactions are fully beyond reproach and are cooperating fully with the authorities in their inquiries on the Kogi State bailout accounts.”
The bank, in its response to the State’s enquiry, said that “the Kogi State government does not currently operate or maintain a fixed deposit account with Sterling Bank.
“There is no mandate letter from the Kogi State government to open account number 0073572696 with Sterling.
“Sterling Bank account 0073572696 is an internal (mirror) account operated by the Bank for purposes of managing the Kogi state bailout facility.”
Sterling bank disclosed that the balances in Kogi bailout accounts as of August 31 include: Kogi state bailout account 1 (0072969301) #NilBalance; Kogi state salary bailout account 2 (0073522756) – N999,190.50; Kogi state government salary account (0073499012) – N44,816,195.24.
Breakdown of Disbursement from the Bailout Funds
A document seen by Gatekeepers News revealed that the bailout fund of N20,000,000,000.00 was credited into Kogi State bailout loan account 0073522756 (Sterling Bank Plc) on July 23rd, 2019.
On the same day, a transfer of N16,450,000,000.00 was made into salary account no 0073499012 (Sterling Bank Plc.).
On July 29, 2019, another transfer of N3,000,000,000.00 was done into SRA Account no 1020895797 (UBA) for the payment of February 2019 Salaries and allowance of civil servants and pensioners.
On August 23rd, 2019, the State Government transferred N400,000,000.00 into salary account no 0073499012 (Sterling Bank Plc.).
And N149,000,000.00 was also transferred into salary account no 0073499012 (Sterling Bank Plc.) on September 25th, 2019.
In all of the transactions, Gatekeepers News observed that a total of 809.50 was deducted as bank charges and the subtotal of the utilised bailout loan was N19,999,000,809.50.
The balance left in the Kogi State bailout loan account is N999,190.50, according to the breakdown contained in the document.
Further checks revealed that the N19,999,000,809.50 was later disbursed into accounts that belong to the SSG’s Office, State Pension Board, House of Assembly, Nigeria
Labour Congress (NLC), Trade Union Congress, Joint Negotiation Council, Kogi State University, Kogi State (SRA) Account in various banks.
The EFCC’s claim in the suit it instituted against Kogi State that the bailout fund was converted into fixed deposit investment, however, does not tally with the document released by the bank itself and the state government.
