Osun Govt Sues EFCC, First Bank for ₦2 Billion Over Unlawful Account Freeze

Osun Govt Sues EFCC, First Bank for ₦2 Billion Over Unlawful Account Freeze

The Osun State Government has initiated legal proceedings against the Economic and Financial Crimes Commission (EFCC) and First Bank Nigeria Limited, demanding ₦2 billion in exemplary and aggravated damages over what it describes as the unlawful freezing of its statutory allocation account. The suit, filed at the Federal High Court in Abuja, challenges the anti-graft agency’s authority to place a Post-No-Debit restriction on the state’s account without first obtaining a court order. Governor Ademola Adeleke, the state’s Attorney-General, and the Accountant-General are listed as plaintiffs in the suit, marked FHC/ABJ/CS/1762/2026. The defendants are the EFCC, its Executive Chairman, and First Bank of Nigeria Limited. A legal team led by Prof. M. T. Adekilekun (SAN) is representing the state government.

The dispute centres on a letter dated August 5, 2026, signed by Assistant Commander Adenike Babalola on behalf of the EFCC’s Director of Investigation, which directed First Bank to place restrictions on Osun’s Federal Statutory Allocation Account (No. 2017170947). The state government argues that this directive was issued without any court order authorising the freeze and that the EFCC acted outside its statutory powers.

The plaintiffs are asking the Federal High Court to determine whether the EFCC possesses lawful authority to freeze, restrict, or otherwise interfere with a state government’s statutory allocation account without regard to due process. They contend that the EFCC’s action constitutes an “egregious act of executive lawlessness, an unlawful resort to self-help, and a flagrant abuse of statutory powers.” According to court documents, the state government argues that the EFCC’s directive violates several provisions of the 1999 Constitution, including sections on federalism, fair hearing, property rights, and revenue allocation. The plaintiffs also rely on the EFCC Establishment Act, 2004, and the Money Laundering (Prevention and Prohibition) Act, 2022, maintaining that these laws require the EFCC to obtain a specific court order before freezing a state government account—something they say did not happen in this case. The state also questioned whether First Bank could lawfully restrict access to the account solely on the basis of an administrative letter from the EFCC. The plaintiffs argue that the bank should not have complied with the directive without being served with a valid court order and that it breached the duty of care owed to the state government by denying it access to the statutory account.

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Beyond a declaration that the freeze was unlawful and unconstitutional, the Osun Government is seeking several reliefs from the court. These include an order setting aside and nullifying the EFCC’s directive, an order mandating First Bank to immediately unfreeze the account and restore unrestricted access, a perpetual injunction restraining the EFCC from interfering with state accounts without due process, and a similar injunction preventing First Bank from complying with future restriction requests lacking court orders. The state is also seeking N2 billion in exemplary and aggravated damages for what it termed as “unlawful interference with public funds,” plus litigation costs. The state government maintained that the restriction was capable of disrupting salary payments, government programmes, and other constitutional obligations owed to residents.

The EFCC has defended its decision, stating that it has been investigating Osun State since March 2026 over alleged fraudulent handling of approximately N11 billion in Ecology Funds, Intervention Funds, and FAAC allocations. The commission claimed it observed suspicious transfers from the account into various corporate entities since August 2, 2026, and that its preventive mandate required it to protect public funds from being looted. EFCC Director of Public Affairs, Wilson Uwujaren, insisted that the action was not politically motivated or connected to the forthcoming governorship election in the state, stating that the EFCC “has always pointed out that it is non-partisan and non-sectarian but always working in the overall interests of Nigerians.” He argued that the EFCC possessed statutory powers under Section 34 of the EFCC Act and Section 7(6) of the Money Laundering (Prevention and Prohibition) Act, 2022, to place a temporary restriction on accounts for up to 72 hours, after which a court order would be required. The EFCC spokesman stressed that the restriction was a targeted measure on one account and did not constitute a blanket freeze on all of Osun State’s finances. He maintained that the Adeleke administration still had access to other government accounts and could continue its operations.

The controversy escalated when President Bola Tinubu publicly distanced himself from the timing of the account freeze, which came just days before Osun’s August 15 governorship election. In a personally signed statement, the President said he felt “deeply embarrassed, not by the EFCC’s exercise of its mandate backed by a court order, but by the timing of the agency’s action.” He directed the EFCC to approach the court to vacate the freezing order and discontinue all proceedings instituted against the Osun State Government. President Tinubu emphasised that “Osun State is only a few days away from its gubernatorial election. Therefore, nothing ought to be done to give an impression that the EFCC or indeed any other agency of the federal government is being used to interfere with the election.” He reaffirmed his commitment to allowing anti-corruption agencies to operate independently but stressed that the timing of the action necessitated his intervention.

Senior lawyers, including Senior Advocates of Nigeria (SANs), have faulted the EFCC’s action, insisting that the anti-graft agency lacks the constitutional and legal authority to freeze a state’s accounts without first obtaining a court order. Constitutional lawyer Prof. Konyinsola Ajayi, SAN, said the law is clear that bank accounts can only be frozen pursuant to a valid court order. Human rights lawyer Prof. Chidi Anselm Odinkalu maintained that “EFCC needs a court order to do that. It cannot be done lawfully as an administrative act.” The Human Rights Writers Association of Nigeria (HURIWA) also condemned the EFCC’s action, warning that democracy could be undermined where institutions with coercive powers are perceived as acting in a politically selective manner.

In summary, the Osun State Government is challenging the EFCC’s authority to freeze its statutory allocation account without a court order, seeking N2 billion in damages. The EFCC maintains its action was lawful and part of an ongoing N11 billion investigation. President Tinubu has intervened, directing the EFCC to vacate the freeze due to concerns about the timing ahead of the governorship election. No hearing date has been fixed for the suit.

Osun Govt Sues EFCC, First Bank for ₦2 Billion Over Unlawful Account Freeze