Go after bank loan defaulters, Yar’Adua tells security agents
Cover Stories Aug 17, 2009 By Daniel Idonor & Michael Eboh
ABUJA— PRESIDENT Umaru Yar’Adua, yesterday, ordered security agents to move against those who took non-servicing huge loans from the five banks, which received the Central Bank of Nigeria, CBN hammer Friday, with the sacking of their Chief Executive Officers, CEOs.
Meanwhile the Nigerian Stock Exchange (NSE) will today, Monday, place the shares of Intercontinental Bank Plc, Oceanic Bank Plc, Afribank Nigeria Plc, FinBank Plc and Union Bank Nigeria Plc on technical suspension.
Briefing State House Correspondents in Abuja, Presidential Spokesman, Mr Olusegun Adeniyi, said that the security agents were drafted in immediately to restore the hope of the customers of the affected banks and many other ailing ones yet to be identified.
President Umaru Yar’Adua and IG Onovo
He said that Yar’Adua had also affirmed that his government would remain committed to genuine efforts by the new leadership of the apex bank to put a final stop to the sharp practices by few people which led to the non- servicing of the huge loans.
According to him,“along with stricter supervision and regulation by the CBN, the administration will continue to do whatever is necessary to guarantee the safety of deposits in Nigerian banks and entrench best corporate practices and better credit administration processes in the management of banks.
“The President has directed all law enforcement agencies to give their fullest support to efforts by the new teams of the five banks which have received bail-out funds from the CBN to recover the huge loans, the non-servicing of which placed the banks at risk of distress.”
New Dep. Gov appointed
To ensure that the hitherto lucrative business of loan-taking without servicing in the banking sector is made less attractive, through stricter monitoring, supervision and regulation by the apex bank, President Yar’Adua has nominated Dr. Kingsley Chiedu Moghalu for confirmation by the Senate as the Deputy Governor of the CBN.
“To strengthen the Apex bank further for the effective and efficient performance of its supervisory and regulatory functions, President Yar’Adua has nominated Dr. Kingsley Chiedu Moghalu for confirmation by the Senate as a Deputy Governor of the CBN”.
He stated: “The “President Umaru Musa Yar’Adua fully endorses the measures announced by the Central Bank of Nigeria (CBN) at the weekend to sanitize Nigeria’s banking sector and prevent fresh bank failures with their attendant negative effects on the national economy.”
According to him, president Yar’Adua has also “assured all Nigerians that their deposits in Nigerian banks are safe as the Federal Government will continue to act in concert with the CBN to ensure that no bank is allowed to fail or become distressed.”
While observing that there is no cause for alarm over recent developments in the banking sector, Adeniyi stated that “the over N400 billion already injected into the five affected banks to ensure their continued viability affirms the Yar’Adua Administration’s commitment to taking all necessary actions to ensure the stability and well-being of the country’s financial sector.”
Moghalu, 46, according to Adeniyi, who holds a doctorate degree from the London School of Economics and has many years of experience in corporate governance, risk management and strategy, will expectedly complement the collective strength of the CBN board and management.
He added that “the President has also approved the appointment of two additional members on the Board of the CBN.
They are Mr. Stephen Oronsaye and Mr. Nebolisa Arah. Oronsaye who is currently the Head of the Civil Service of the Federation is to serve on the CBN board in his personal capacity and is to replace Prof. Akpan H. Ekpo (South-South Zone), while Arah who was the pioneer Managing Director of Fidelity Bank is to replace Mrs. Juliet Madubueze (South_East Zone).”
He explained that “the appointments of Mr. Samuel Olofin, Dahiru Muhammad and Joshua O. Omuya to the CBN board have also been renewed by the President. All the board appointments are subject to confirmation by the Senate.”
“In further action to enhance the effectiveness of the CBN as an institution, President Yar’Adua has also approved the nomination of Dr. Adedoyin Salami, Mr. John Oshilaja, Prof. Chibuike Ugochukwu Uche, Dr. Shehu Yahaya and Mr. Abdul-Ganiyu Garba for confirmation by the Senate as members of the Bank’s Monetary Policy Committee,” he stressed.
The Governor of the CBN, Mallam Sanusi Lamido Sanusi, had last Friday sacked the Chief Executive Officers, CEOs and Managing Directors, and the management teams of five banks including Oceanic Bank Plc, Afribank Plc, Intercontinental Bank Plc, Finbank Plc and the Union Bank Plc.
The sack notice, according to the CBN boss, was in line with the apex bank’s Act, which prescribes such penalty for banks CEOs who indulge in sharp practices such as loaning huge sums of money to customers of questionable characters who lack the needed financial management skills to service such borrowings.
Nigerians were recently told that about 50 highly influential Nigerians are owing banks about N2 trillion, which spurred the apex bank to probe the transactions of all banks.
Shares of troubled banks on technical suspension
According to a statement by Mr. Sola Oni, Spokesperson for the NSE, the action is to protect investors of these banks from erosion of their capital and to help safeguard their investments in the bank and the capital market in general.
Speaking on the condition of anonymity, the Managing Director of a stock-broking firm, who first hinted Vanguard of the suspension, noted that if the shares were not placed on technical suspension, investors would want to dump the shares of these banks, thereby, causing their prices to fall rapidly.
He noted that this is the practice in the NSE and advanced capital markets worldwide, noting that protection of investors’ interest, will further help in promoting confidence in the capital market.
As at Friday, August 14, 2009, the shares of Afribank Nigeria Plc stood at N5.22 per share and it recorded a transaction of 4.45 million shares, FinBank Plc’s share price stood at N1.55 per share and it recorded the exchange of 0.82 million shares, Intercontinental Bank Plc traded 1.49 million shares at N6.93 per share, Oceanic Bank International Plc’s share price stood at N4.94 per share and it recorded a turnover of 12.5 million shares, while Union Bank Nigeria Plc’s share price stood at N12.60 per share and it recorded a turnover of 10.74 million shares.
http://www.vanguardngr.com/2009/08/17/go-after-bank-loan-defaulters-yaradua-tells-security-agents/ |
What YAR A'FAILURE should ask is for SSS to chase all CORRUPT POLITICIANS as they form the bulk of those taking 'default loans'
Also former IGP OKIRO and wife N166 million Naira secured by the 'exalted office of IGP' until he was retired before 'security' stop being security.
The whole Political and economic system is ONE BIG FRAUD including all the President's men.
Has anyone forgot the House Power probe, what happens with lawmakers, they became the FRAUD and CORRUPTION themselves when they have been asked to investigate allegation of mismangement of power funds.
I have said it before and I will continue to say it, we have
AWFUL LEADERSHIP in this country and Madam Nafdac can continue to Rebrand a non existing brand from now till kingdom come. She is not only wasting Nigerians time but our resources.
Did any one voted YAR A'LIAR, nor the numerous politicians in power today ?
LEADERSHIP, CORRUPTION., ELECTORAL REFORMS, ELECTRICTY, INFRASTRUCTURES.
Those are the issues that we need to be tackled in that order.
Banking fraud is just an extension of POLITICAL FRAUD and CORRUPTION
Also there issues with whether the CBN has in place proper regulatory framework as these banks that the are sacking and replacing their CEO's are Public company and Not government businesses. |
