A Federal High Court situated in Abuja has granted the Apex bank an order to freeze the accounts of Nigerian fintech companies which are RiseVest Technologies Limited, Bamboo Systems Technology Limited, Chaka Technologies Limited and Trove Technologies Limited.
The companies were accused of operating without license as asset management companies, and utilising foreign exchange sourced from the Nigerian market to purchase foreign shares in contravention of CBN’s directives.
As seen in a court paper, the Central Bank of Nigeria said it is investigating ‘illegal foreign exchange transactions’ by the fintech companies and also sought the court injunction to freeze their bank accounts for 180 days pending the completion of investigations.
The motion marked FCH/ABJ/CS/822/2021 and filed at the High Court on August 4, CBN through its counsel Michael Kaase Aondoakaa, submitted that “the investigation being carried out concerns what has been discovered to be serious infractions by the defendants/respondents in connection with some foreign exchange transactions, and non-documentation by the respondents in violation of the extant laws and regulations, particularly the Foreign Exchange (Monitoring and Miscellaneous Provisions) Act and the Central Bank of Nigeria foreign exchange manual.
“That more specifically, there is a grave allegation that the respondents are engaged in illegal foreign exchange transactions, procuring of foreign
exchange via their banks from the Nigerian foreign exchange market via several bureaux de change, international money transfer operators and have transferred cash deposit of more than $10,000.00 (Ten thousand dollars) to various accounts overseas contrary to provisions of extant laws and regulations and also traded in foreign securities and cryptocurrencies in contravention to CBN Circular referenced TED/FEM/FPC/GEN/01/012 and BSD/DIR/PUB/LAB/014/001, dated February 5, 2021, and July 01, 2015.
Justice Ahmed Mohammed, who delivered Tuesday’s ruling said: “having listened to senior counsel to the applicant, on the motion with respect to filed in August, it is granted as prayed.” and asked aggrieved parties to approach the court to seek redress within the period. He then adjourned the matter to February 20, 2022, for hearing.
In a swift reaction to the court order, Rest Vest assured its customers that funding and withdrawals will continue to be processed as normal.
“We will work with regulators, as we always have to ensure that all issues raised are properly addressed. However, this does not affect our users or their investments, which are managed by regulated third parties in all jurisdictions in which we operate,” the company said in an email to their customers on Tuesday night.
Bamboo also said its legal and government relations team are already working to resolve the dispute.
“Your money remains safe with Bamboo and will always be readily accessible,” the company assured customer.
The regulator had advised capital market operators who work in concert with the referenced online platforms to desist.