‘A mere circular is not law’ — court faults CBN, unfreezes Rise Vest’s accounts

A federal high court sitting in Abuja has vacated the interim order freezing the accounts of Rise Vest Technologies Ltd, a fintech company.

The Central Bank of Nigeria (CBN) had on August 17, 2021 secured, through an ex parte motion, an order freezing the accounts of some fintech companies for 180 days over alleged forex infractions.

The affected companies are Rise Vest Technologies Limited, Bamboo Systems Technology Limited, Bamboo Systems Technology Limited OPNS, Chaka Technologies Limited, CTL/Business Expenses, and Trove Technologies Limited.

Rise Vest Technologies Ltd, in a motion filed through its counsel, Seni Adio, had submitted that there was no evidence that it engaged in unlawful conduct, adding that the CBN did not meet its burden of proof in support of its allegations.

Responding, Mathew Onoja, CBN’s counsel, argued that the ex-parte order of the court was proper, lawful, and valid.

He contended that the order was in accordance with the provisions of Section 97 (1) of the Banks and Other Financial Institutions Act (BOFIA) 2021, which empowered the plaintiff/respondent (CBN) to invoke the jurisdiction of the court via an ex parte application.

Ruling on the application on Monday, Taiwo O. Taiwo held that the CBN could not rely on a circular to freeze the bank account of a company.

The judge noted that the CBN failed to provide any law showing that it is illegal to deal in cryptocurrency in Nigeria, adding that the CBN circular, referenced as BSD/DIR/PUB/LAB/014/001 of February 5, 2021, is not a law.

The judge, among others, held that although the CBN has the power to investigate any infraction, the infraction must relate to BOFIA or any other enactment administered by the regulator.

“I have perused the counter affidavit of the respondent and I see that the reason for freezing the account of the applicant is based on the alleged infraction of the circular of the CBN. The law is trite that any conduct that must be sanctioned must be expressly stated in a written law,” he said.

“Being unknown to law, circulars cannot create an offence because it was not shown to have been issued under an order, Act, Law or Statute.

“The learned counsel for the respondent has also raised the issue of public policy in his submissions against the application.

“Can this court decide this application based on public policy as being urged on it by the learned counsel for the respondent? I think not.

“I hereby discharge the interim freezing order of this court made on August 17, 2021, made against the defendant/ applicant.”

The judge ordered the banks – Zenith Bank Plc and Guaranty Trust Bank – to immediately grant the firm unfettered access to its accounts.