Police Housing Scam: Court Freezes Accounts Of Mortgage Firm - P.M. News

Police Housing Scam: Court Freezes Accounts Of Mortgage Firm


A Federal High Court sitting in Lagos, southwest Nigeria has frozen all the accounts of a mortgage bank, Centage Savings and Loans Limited, for allegedly diverting the sum of N1.578 billion meant for police officers’ national housing fund scheme.

The order of the court was sequel to a winding up petition filed by Lagos lawyer, Barrister Ade Oyebanji on behalf of First Bank of Nigeria Plc. urging the court to wind up the mortgage bank for diversion of fund.

In an affidavit sworn to by a recovery team leader of First Bank, Nkem Ikotowu, the deponent alleged that the Nigeria Police Force was granted N2 billion facility by First Bank sometime in February, 2009 on behalf of 4,000 officers of the rank of Assistant Superintendent of Police and above.

The facility was to serve as the 10 percent mandatory equity contribution towards accessing the mortgage facility from the Federal Mortgage Bank for each of the participating officers under the National Housing Fund Scheme. The balance of 90 percent was to be sourced through their appointed primary mortgage institution.

Consequently, the NPF in the transaction, chose Centage Savings and Loans limited as a primary mortgage institution.

Thereafter, the respondent applied to the bank to transfer the sum of N1.8 billion into its account with Access Bank.

Upon this instruction, First Bank transferred N1.87 billion 10 percent equity contribution by 3,174 officers of the NPF in tranches to the respondent’s account in Access Bank.

However, the said facility has since expired as the respondent could not conclude the processing of the 90 percent of the expected fund from the FMBN. When the respondent failed to access the balance of 90 percent from the FMBN, he never refunded the sum of N1.87 billion to First Bank. The money was diverted.

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Consequent upon the failure of the respondent to use the said fund of N1.87 billion in its custody, for the purpose it was meant for, a criminal complaint was lodged against it and was investigated by the police.

The bank has written many letters demanding that the money be paid but the respondent has so far failed to pay.

The current indebtedness of Centage Savings and Loans Limited to First Bank stands at N1,950,458,862.85 plus the accrued interest of N451,792,840.02.

First Bank has made demands to the respondent to pay but it cannot because it is insolvent.

The bank therefore urged the court to freeze the account of the respondent in all the 18 banks and also restrain their officers from tampering with the account of Centage Savings and Loans limited.

The presiding judge, Justice Okon Abang, after listening to the argument and submission of Mr. David Aransiola from the law firm of Oyebanji and Company acceded to the request of the petitioner and granted the order.

—Akin Kuponiyi