Enugu seals eight commercial banks over N1b debt

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The Enugu State Board of Internal Revenue on Monday sealed 36 branches of eight commercial banks allegedly indebted to the state government to the tune of N1 billion.

The News Agency of Nigeria reports that the exercise, which started by 6am, was carried out at 23 locations of the affected banks across the Coal City.
Addressing newsmen after the exercise, the Chairman of the BIR, Emeka Odo, said the board sealed the banks due to their failure to remit about N1 billion owed the state government.

Odo said that the board had on February 6 obtained an exparte order from the state high court to distrain the affected banks.

He said that the debts were part of the withholding taxes they were supposed to remit to the state government which dated back to 2007.
The affected financial institutions are Access Bank, Stanbic IBTC Bank, Skye Bank, Union Bank and Unity Bank.

The other banks are Heritage Bank, Keystone Bank and Sterling Bank.
Odo said: “The branches of the affected banks which are now under lock and key will remain locked until they pay to the state government the taxes they have collected on its behalf.

“In the past one year we have written the affected banks severally and held meetings with them on the subject matter but they would rather hold onto government funds illegally.”

Odo said the eight banks had combined branch network of 36 branches in Enugu urban and the neighbouring towns of Agbani and Ituku Ozalla.
He said: “The sealing of these banks is the first phase of the enforcement exercise on major companies and institutions to ensure that they perform their civic obligation to the state government.

“We can no longer allow banks to behave like corporate outlaws when it is on record that the withholding taxes have been deducted by the banks from the interest they pay on customers’ deposits.”

Odo appealed to customers of the affected banks not to panic but see the exercise as a measure to enable government serve them better, adding that their deposits in the banks were still intact.

He said that the board did not expect the sealing of the banks to last for more than three days, especially if they complied.

NAN reports that the staff of the affected banks as well as customers could not gain access to the banks as a red ribbon was used to cross the entrance of the banks and a notice pasted on the wall with the inscription: “Sealed by Court Order.”

However, managers of some of the affected banks were sighted at the head office of the BIR consulting with officials of the board.
In its reaction, Sterling Bank expressed shock at the development.

It said in a statement on Monday: “The attention of Sterling Bank has been drawn to a report of the closure of its branches in Enugu State by the State Government’s Board of Internal Revenue Service (BIR) for alleged failure to pay withholding tax to the Board.

“The reported closure came to us at Sterling Bank as a shock considering the robust relationship that exists between the Bank and the Board just as we had conducted ourselves as a responsible corporate financial institution through prompt payment of all our taxes, fees, levies and all other payments not only due to BIR but to all government institutions both at the states and national level.

“We would like to confirm that the Board approached the Bank with a request to pay outstanding withholding tax to it which we agreed to settle but after due reconciliation of the books.

“We had scheduled a meeting with the officials of the Board this Monday only to hear of the closure of our branches on Sunday night.

“While we are not joining issues with the Board over the closure, we believe the Board should have waited for the conclusion of the process of reconciliation before engaging in the closure of the branches without due consideration of the effect of such closure not only to the Bank but on our numerous customers who have been denied access to their funds for business opportunity and personal use.

“Sterling Bank hereby use this opportunity to apologize to our customers who were affected by this temporary business disruption. We want to give assurance that the Bank is working with the Board to ensure that the issue is resolved today to enable the branches to open for business tomorrow morning.”
The statement was signed by Henry Bassey, the Chief Marketing Officer of Sterling Bank Plc.

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