In a twist of events, Trove Finance walks as court orders CBN to unfreeze bank account
A federal high court sitting in Abuja has directed Nigeria’s apex bank to unfreeze the bank accounts of investment platform, Trove Finance.
Recall that the CBN on August 17, 2021 ordered the freezing of the bank accounts of Trove Finance and 3 other fintechs in Nigeria for allegedly violating some trading laws.
The apex bank then launched an investigation into the financial operations of various fintech platforms, especially the ones whose platforms enabled Nigerians to trade in local and foreign stocks.
The CBN, had alleged in a circular at the time that Trove Finance and other fintech firms “were complicit in operating as asset management companies without a license “and employing foreign exchange obtained from the Nigerian foreign exchange market for acquiring foreign bonds/shares in breach of the CBN circular referenced TED/FEM/FPC/GEN/01/012, dated July 01, 2015.”
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Trove had earlier gone to court seeking to unfreeze its bank accounts but eventually resolved to settle out of court with the CBN. Both counsels to Trove and CBN informed the court at a hearing on the 29th of September 2021, of their intention to settle the matter amicably.
The Presiding Judge made a pronouncement, ordering parties to settle the matter amicably and adjourned the next hearing till 30th of November.
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However, it appeared that the out-of-court settlement did not work out and the case went to trial. The court has now dismissed the case against Trove at a judgement delivered on February 23, 2022.
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“We are pleased to announce that on February 23, 2022, the Federal High Court in Abuja completely struck out & dismissed the case against Trove,” Trove’s Oluwatomi Solanke wrote in a statement to customers on Friday, adding “We would like to thank all our amazing users and we look forward to building a bigger future for you”.
The statement however did not contain the details of the judgement or the basis upon which the case was struck out. Nigeria Today will bring you the details of the judgement as soon as we lay our hands on it.
What This Means
Regulatory risks constitute one of the major threats to innovation in Nigeria. It is even more so for the highly regulated financial services industry. The ruling is an important one that now indicates that there could be a window of opportunity to seek redress in the face of an overbearing regulator. This is, arguably, the first time anyone in the tech ecosystem is daring to take up on a regulator and this victory could embolden many more to challenge some sanctions or actions that are borderline authoritative by any regulator in the future. Other regulators, knowing there could be litigation, could now consider their actions more carefully.