FG Takes Over Keystone Bank After Plea Bargain Agreement

In a significant legal development, the federal government has officially taken over Keystone Bank Limited following a ruling by the Lagos State Special Offences Court in Ikeja.

On Tuesday, February 12, 2025, Justice Ramon Oshodi ordered the forfeiture of 6.3 billion units of the bank’s ordinary shares, previously held by Sigma Golf Nigeria Limited, to the government.

The ruling followed a plea bargain agreement in which Sigma Golf Nigeria Limited, chaired by Mr. Umaru Modibbo, pleaded guilty to charges of fraudulently converting N20 billion in funds from the Asset Management Corporation of Nigeria (AMCON). The funds were allegedly diverted through Heritage Bank to facilitate the acquisition of Keystone Bank.

The case, initially highlighted in a report by President Bola Tinubu’s Special Investigator, Mr. Jim Obazee, led to the Central Bank of Nigeria (CBN) taking over Keystone Bank on January 10, 2024. The CBN’s intervention was prompted by the fraudulent takeover, with the bank’s management subsequently dissolved and replaced by new leadership, including Managing Director, Mr. Hassan Imam and Executive Director, Chioma A. Mang.

The Economic and Financial Crimes Commission (EFCC) continued the prosecution of those involved, including Mr. Ahmed Kuru, the former Managing Director of AMCON, who is accused of playing a role in the fraudulent transaction. Mr. Kuru, however, pleaded not guilty to the charges. Sigma Golf Nigeria Limited, as part of the plea agreement, was found guilty, and its rights to the 6.3 billion shares in Keystone Bank were transferred to the federal government.

In the plea bargain arrangement, the EFCC agreed not to pursue further criminal charges against Mr. Modibbo. The court also granted Mr. Kuru bail, pending the commencement of his trial on March 7, 2025, and ordered that his passport be seized by the Nigerian Immigration Service.

Following the court’s ruling, Keystone Bank confirmed its new status as fully owned by the federal government of Nigeria. The bank expressed confidence that this transition would enhance its stability and facilitate a smooth recapitalisation process. It reassured its customers of its continued financial health, commitment to regulatory compliance, and operational resilience.

This development marks a key milestone in Keystone Bank’s journey, positioning the bank for long-term growth and improved partnerships. The ruling reinforces the government’s commitment to ensuring accountability and transparency in the banking sector, particularly in the wake of financial misconduct.