N3.4 bn Debt: Oyo Government explains cash swap policy disrupts payment plans

*Prof. Oyelowo Oyewo (SAN), Oyo State Commissioner for Justice and Attorney General, explains the CBN cash swap policy disrupted the state’s payment plans for the judgement debt

Isola Moses | ConsumerConnect

The Oyo State Government has responded to a court order a High Court of the Federal Capital Territory, Abuja, temporarily placed on its local government funds in accounts with four banks operated by the State Government and its agencies.

Justice A. O Ebong of the Federal Capital Territory High Court, Abuja, had ordered a temporary blockade of the state government’s funds in four banks pending the time it could show cause on why the monies in there aren’t credited to some judgement creditors.

Justice Ebong had issued the order while ruling on a motion ex-parte for garnishee order filed by the ex-Chairpersons and Councillors, led by Misters Bashorun Majeed, Bosun Ajuwon and Idris Okusesi.

It was learnt the affected banks are First Bank Limited, United Bank for Africa (UBA), Wema Bank and Zenith Bank.

The Justice also ordered the banks to show cause why the order should not be made absolute in this regard.

In reaction to the garnishee order, Prof. Oyelowo Oyewo (SAN), Honourable Commissioner for Justice and Attorney General, Monday, March 27, 2023, said the recent Central Bank of Nigeria (CBN) cash swap policy had disrupted the payment plans of the explained the state is not in disobedience of the court order.

The Commissioner also stated: “Out of N4.2 billion, we have paid N1.5 billion, and we were also in the process of paying.

“But because of the cash swap policy, that disrupted our plans, so, the finances were disrupted and we could not.

“We are not in disobedience of the court, and we are going to go to the court, and also we observed that the Federal Capital Territory does not have jurisdiction on that matter, but these are matters that will be brought before the court.”

Oyewo further said: “Oyo State is amenable to installmental payment and even the judgements that were given during Ajimobi’s administration, we are still paying them. “The obligation that the payment has is spread across the spectrum.

“At the end of the day, the court will give a hearing and we are amenable to installmental payment and we are still going to go to court and quash the order.”

Funds for settlement of balance of judgement debt

According to court filings, the said funds are for settlement of the outstanding balance of N3,374,889,425.60 from the judgment debt owed some former local government Chairpersons and Councillors whom Governor Seyi Makinde of Oyo State sacked May 29, 2019, before the end of the officials’ tenure.

Musibau Adetunbi, their by their lawyer, had initiated the garnishee proceeding, for the chairpersons and councillors in the execution of a judgment they got against the governor and six others from the Supreme Court May 7, 2021.

The ruling reads that A garnishee order is hereby granted to attach the judgment debtors’ accounts with garnishees Nos. 1 to 4 in the motion ex-parte, for the purpose of settling the judgment debt outstanding in the sum of N3,374,889,425.60 as awarded by the Supreme Court and conceded by the judgment debtors in Exhibit 11 attached to the applicant’s motion.

“The garnishees (1st to 4th) shall file affidavits and attend court on the next adjourned date to show cause why the order nisi should not be made absolute.

The judgment creditors have since effected service of copies of the order on the judgment debtors as ordered by the court.

Listed as judgment debtors with the Oyo State Governor is the state’s Attorney General, the Commissioner for Local Government and Chieftaincy Affairs, the Accountant General, the House of Assembly, its Speaker and the Oyo State Independent Electoral Commission (OYSIEC).

The ex-Chairpersons and Councillors were elected in the election conducted by OYSIEC March 12, 2018, for a three-year term.

The plaintiffs had sued the government before the High Court of Oyo State to challenge the constitutionality of Sections 11 and 12 of the Oyo State Local Government Law 2001, which empowered the governor and the House of Assembly to dissolve LG executives in the state, according to report.

In its judgment on 6 May 2019, the Oyo State High Court declared Sections 11 and 12 of the state’s Local Government Law 2001 as unconstitutional, on the grounds that it violated Section 7(1) of the Constitution.

Despite the subsistence of the judgment, Governor Makinde sacked the Chairpersons and Councillors 29 May, 2019, and subsequently appealed the judgment.

The Court of Appeal, in its judgment 15 July, 2020, set aside the judgment of the High Court, a decision the affected officials appealed at the Supreme Court.

In its judgment 7 May 2021, a five-member panel of the Supreme Court presided over by Justice Kudirat Kekere-Ekun, allowed the appeal and set aside the decision of the Court of Appeal.

The court, which awarded a cost of N20 million against Makinde.

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