Following a historic court decision, the Federal Government now entirely owns Keystone Bank Limited, a momentous step for the Nigerian banking industry. On Tuesday, February 11, 2025, the Lagos State Special Offences Court, located in Ikeja, ordered the government to forfeit shares that Sigma Golf Nigeria Limited, a former key shareholder in the bank, had previously owned. An ongoing investigation into suspected financial irregularities involving Sigma Golf and former Asset Management Corporation of Nigeria (AMCON) officials is the reason behind this decision.
The case, brought forth by the Economic and Financial Crimes Commission (EFCC), centred around the alleged diversion of N20 billion of AMCON funds for the acquisition of shares in Keystone Bank. While former AMCON Managing Director Ahmed Kuru pleaded not guilty, Sigma Golf’s Chairman, Umaru Modibbo, admitted guilt and entered into a plea bargain agreement with the EFCC.
“Upon the conviction of Sigma Golf Nigeria Ltd, all its rights, title, and interest in the one (1) unit of Keystone Bank Limited’s ordinary shares allotted to Alhaji Umaru Hamidu Modibbo, the current Chairman of the company, shall forthwith also be forfeited to the Federal Government of Nigeria, represented by the Economic and Financial Crimes Commission (EFCC),” the plea bargain agreement stated.
The court, accepting the plea bargain, ordered the forfeiture of all Sigma Golf’s shares in Keystone Bank to the Federal Government. This effectively transfers full ownership of the bank to the government, marking a significant turning point in its history.
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The court’s decision has far-reaching implications for Keystone Bank. It brings an end to a period of uncertainty and instability following the Central Bank of Nigeria’s (CBN) dissolution of the previous Board and Management in January 2024 due to corporate governance breaches. The CBN subsequently appointed a new Board and Management to steer the bank towards a more stable future.
“This development marks a significant milestone in our journey, reinforcing our stability and paving the way for a seamless recapitalisation process,” stated Keystone Bank in an official statement. “With this clarity, we are well-positioned for sustained growth, stronger partnerships, and enhanced profitability.”
The bank emphasised its commitment to strengthening its balance sheet and fulfilling all its obligations to customers. “We assure our customers that the bank remains safe, healthy, strong, and resilient,” the statement concluded.
Implications for the Banking Sector
The government’s acquisition of Keystone Bank underscores its commitment to maintaining stability and integrity within the Nigerian banking sector. This decisive action sends a strong message to all financial institutions regarding the importance of adhering to sound corporate governance principles and complying with all regulatory requirements.
Furthermore, the government’s intervention highlights the crucial role it plays in safeguarding the interests of depositors and ensuring the overall health of the financial system. While government intervention in the private sector can raise concerns, in this instance, it appears to be a necessary step towards restoring confidence in Keystone Bank and ensuring its long-term viability.
The future of Keystone Bank now lies in the hands of the Federal Government. The success of this transition will depend on the government’s ability to effectively manage the bank, implement necessary reforms, and ensure its continued growth and profitability. This development will undoubtedly significantly impact the Nigerian banking landscape, and industry observers and stakeholders alike will closely watch its implications.
