The Osun State Government has challenged the legality of the restriction placed on its statutory allocation account, insisting that no court order was served on either the state government or First Bank before the account was placed on Post No Debit.
Counsel to the state government, Prof. Mubarak Adekilekun, SAN, made the position known on Friday while speaking on the controversy surrounding the action of the Economic and Financial Crimes Commission.
According to Adekilekun, the law requires a court order to be obtained and properly served, particularly on the affected financial institution, before such a restriction can lawfully be placed on an account.
He explained that although the EFCC sent a letter to First Bank directing the restriction, the letter was later forwarded to the Osun State Government without any accompanying court order.
“You will recall that after the letter was written to First Bank in Osun, which in turn transmitted the letter to the state government, the requirement of the law in this regard is that a court order must be issued and served on, especially, First Bank,” he said.
Adekilekun maintained that the absence of such an order was central to the state government’s objection to the EFCC’s action.
He acknowledged that the commission has powers under the law to intervene where there are suspicions of financial crimes, but argued that those powers must be exercised within the limits prescribed by the Money Laundering (Prevention and Prohibition) Act.
He particularly referred to Section 7 of the Act, which, according to him, requires a court order to be served before the restriction can be maintained.
“They were trying to justify their action that if they do not do it, the account could be compromised. Yes, we agree there are some provisions of the law that say EFCC can, but if you interpret this in conjunction with Section 7 of the MLA, it says that there must be a court order served on that party,” he said.
The senior lawyer further rejected the suggestion that the EFCC could simply rely on the powers of its chairman to impose a Post No Debit restriction on a state government’s statutory account without first complying with the relevant legal requirements.
When asked whether the commission could restrict the account for 72 hours before obtaining a court order, Adekilekun remained firm that a court order was required.
“See, in this regard, EFCC must get a court order. The laws are there. If you read the provision I’m talking about, Section 7 of the Money Laundering Act, it stipulates that court order must be served. It is there,” he insisted.
Adekilekun also dismissed suggestions that the account was being used for money laundering, explaining that the account in question was primarily meant to receive the state’s statutory allocations from the Federation Account.
He questioned the basis for placing such a restriction on an account holding funds from the Federation Account, describing the money as being within the federal allocation system.
“You can’t do an act of this magnitude and just say you are transmitting a letter to put a PND on a state government account. The only money that is being transferred to that account is from the Federation Account, pure federal domain,” he said.
His position, however, differs from that of human rights lawyer and Senior Advocate of Nigeria, Femi Falana, who had earlier argued that the EFCC acted within its legal powers.
Falana maintained that the commission could restrict a state government account where there were grounds for such action, provided it obtained the necessary court order within the period prescribed by law.
He referred to a 2022 Court of Appeal decision involving the Benue State Government and the EFCC, which he said recognised the commission’s authority to place a Post No Debit restriction for up to 72 hours while seeking a court order.
According to Falana, the circumstances surrounding the Osun case showed that the EFCC had approached the court and that the Federal High Court subsequently intervened based on information presented by the commission.
The dispute over the restriction has also attracted political attention, particularly because of its timing ahead of the August 15 governorship election in Osun State.
President Bola Tinubu subsequently directed the EFCC to return to court, seek the vacation of the existing order and discontinue the action, citing concerns over the timing of the restriction and its possible implications for the election.
Despite the presidential intervention, it remains unclear whether the Osun State Government will continue with its legal challenge.
When asked whether the state would proceed with the case, Adekilekun said the decision ultimately rested with the government he represents.
“Well, it depends on what my client thinks, which is the Osun State Government. If they give us the go-ahead, but I think and I believe that it should be tried,” he said.
The dispute has therefore continued to centre on the extent of the EFCC’s powers to restrict government accounts, the interpretation of the Money Laundering Act and whether the required judicial process was properly followed before the Osun State Government’s account was placed under restriction.
