Bank MD Stole Shares Worth 97 Billion Naira

Following the second round of banks’ audit exercise conducted by the Central Bank of Nigeria (CBN), officials of the apex bank found that a managing director (name withheld), whose shareholders have strong political influence in the current administration, allocated to himself share capital of N85 billion that is yet to be paid up.

Daily Sun source also revealed that the same MD allocated shares to a local airline to the tune of N18 billion as corporate investments. The airline, the source said, denied knowledge of the deal. The bank MD is also alleged to have invested N12 billion depositors’ funds in a supposed subsidiary of the bank.

The source said the company was found to be the MD’s private firm. The conclusion of the latest audit has already sparked fear in the financial sector. The CBN examiners were said to have concentrated on liquidity; loan verification such as loans to stockbrokers, petroleum products importers, performing and non performing loans; corporate governance issues; processes and resources spent on information technology.

The funding is contrary to CBN Governor, Mallam Sanusi Lamido’s conclusion that the remaining banks were not as bad as the others.
According to him, he did not expect many surprises as the remaining 14 banks were not significantly different but latest development had proven him wrong.

It was gathered that the apex bank was yet to conduct what they described as forensic accounting investigation on any of the 24 banks in the country.

The managing director of at least one bank has reportedly visited the State Security Service (SSS), to deposit his passport. This is to prevent him from travelling abroad.

Bankers are of the view that two or three banks may be affected by the decision of Mallam Lamido not to allow family banks in the country anymore.
The CBN governor’s policy to end family owned banks, the bankers believed, may be partly responsible for the fate of Oceanic Bank and Intercontinental Bank, seen as being dominated by the personality of their managing directors.

Sanusi at a forum on Wednesday while briefing capital market operators warned that CBN would not allow banks to be run as a sole proprietorship but as institutions that would imbibe the tenets of good corporate governance, promising to treat shareholders of the affected banks fairly and also ensure that, henceforth, banks in the country were run as institutions rather than as sole proprietorships.

Sanusi also allayed fears of nationalizing the five troubled banks whose managing directors and executive directors were sacked following their gross misuse of shareholders’ funds and inability to meet up with other banking statutory obligations.

The governor said the results of the remaining banks would be made known in October 2009, but opined that their results would be better than those of the 10 banks examined earlier from which five were summarily sacked.

The CBN governor had on August 14 sacked the managing director of and executive directors of Afribank Plc, Finbank Plc, Intercontinental Bank Plc, Oceanic Bank Plc and Union Bank Plc. The examination was conducted by a joint team of CBN and NDIC officials.

According to the CBN audit the major findings on the five banks were excessive high-level non-performing loans, which led to poor corporate governance practices, lax credit administration processes and the absence or non-adherence to the bank’s credit risk management practices, leaving the percentage of non-performing loans from 19 per cent to 48 per cent. The five banks will, therefore, need to make additional provision of N539.09 billion.

The total loan portfolio of these five banks was N2, 801.92 billion. Margin loans amounted to N456.28 billion and exposure to oil and gas was N487.02 billion. Aggregate of non-performing loans were N1,143 billion representing 40.81 per cent. The five banks accounted for a disproportionate component of the total exposure to capital market and oil and gas, thus reflecting heavy concentration to high risk areas relative to other banks in the industry.

The five banks were either perennial net-takers of funds in the inter-bank market or enjoyed liquidity support from the CBN for long periods of time, a clear evidence of liquidity problem. In other words, these banks were unable to meet their maturing obligations as they fall due without resorting to the CBN or the inter-bank market.

Further checks revealed that the outstanding balance on the EDW of the five banks amounted to N127.85 billion by end July 2009, representing 89.81 per cent of the total industry exposure to the CBN on its discount window while their net guaranteed inter-bank takings stood at N253.30 billion as at August 2, 2009. Their liquidity ratios ranged from 17.65 per cent to 24 per cent as at May 31, 2009. The banking regulatory minimum is 25 per cent as spelt out by the apex bank.

Following the second round of banks’ audit exercise conducted by the Central Bank of Nigeria (CBN), officials of the apex bank found that a managing director (name withheld), whose shareholders have strong political influence in the current administration, allocated to himself share capital of N85 billion that is yet to be paid up.
 

The above highlighted says it all, the bank under question must be bankPHB. The yar'adua family has major stakes in the bank and their MD is one of the four bank MDs whose passport was seized last week to prevent them from travelling.

let them continue to loot all the money in the bank, one day they will loot their life in place of money. useless people

You are right and my own gross is why is the CBN so slow in releasing this second report?