A Federal High Court sitting in Osogbo has issued an order restraining a commercial bank from releasing allocations meant for local government councils in Osun State, pending the determination of a substantive suit. The ruling followed a motion filed by concerned parties who approached the court over alleged irregularities in the management and disbursement of council funds.
The presiding judge, while delivering the order, directed the bank to maintain the status quo and suspend all transactions relating to the allocations until the court decides on the matter. The court stressed that releasing the funds before the final determination of the case could render the suit meaningless and cause irreparable damage to the claimants.
It was gathered that the dispute originated from disagreements over the control and disbursement of federal allocations to local government areas in the state. Stakeholders had raised concerns about alleged mismanagement and diversion of the funds, prompting legal action to safeguard the allocations pending clarification of their lawful use.
The order has heightened political and administrative tension in Osun State, as local government councils rely heavily on these allocations for the payment of workers’ salaries, execution of community projects, and delivery of basic services. Observers fear that a prolonged freeze on the funds could disrupt governance at the grassroots and deepen financial strain on the councils.
Legal experts noted that the decision to halt the release of funds underscores the judiciary’s role in ensuring accountability in the management of public resources. They explained that the order was a protective measure to ensure that the subject matter of the suit is preserved until the substantive issues are resolved.
Meanwhile, reactions have trailed the development across political circles, with some stakeholders welcoming the decision as a step towards transparency, while others expressed concern that it may paralyze local administration. Civil society groups in the state have also called for a speedy resolution of the matter in order to prevent negative impacts on residents who depend on council services.
The case has been adjourned to a later date for further hearing, as the court continues to deliberate on the legality of the disbursement process and the rightful authority over the management of the allocations. Until then, the funds remain under judicial embargo.
