EFCC vows to hold on to arrested bank CEOs
Headlines Aug 21, 2009

By Omoh Gabriel, Business Editor, Emma Ujah, Abuja Bureau Chief, Kenneth Ehigiator, Prince Osuagwu & Emma Ovuakporie
LAGOS— The drama and war of words over the sack of five banks’ boards and managing directors; and the subsequent publication of a list of debtors by the Central Bank of Nigeria, CBN, continued yesterday, with the Chairman of the Economic and Financial Crimes Commission, EFCC, Mrs Farida Waziri, vowing that the arrested executives would not be released until all the debts have been recovered, even as the apex bank said it would soon release list of more debtors.

Also, the Head of the Civil Service of the Federation, Mr. Stephen Oronsaye, has directed Permanent Secretaries to ensure that ministries, departments and agencies do not withdraw funds or close their accounts in the five banks where the Central Bank of Nigeria effected some changes.
Chairman, EFCC, Mrs Farida Waziri, vows that the arrested executives would not be released

Chairman, EFCC, Mrs Farida Waziri, vows that the arrested executives would not be released

Meanwhile some of the bank debtors have continued their vehement dispute of the debt profiles published against them by the CBN while the erstwhile management of Oceanic Bank petitioned President Umaru Yar’Adua, alleging malice.

In another development, the CBN issued a statement asking those disputing their debts to reconcile with their banks.
Waziri vows

Mrs Waziri who spoke at the Murtala Muhammed Airport, Lagos, said also that there was no discrepancy between what appeared on the list of banks’ debtors and what they actually owed, noting that those owing have no choice but to pay up as soon as possible.

“There is no discrepancy in the figures quoted by the CBN as they affect what the persons mentioned owe the banks. There is nothing like discrepancy, if there is, it is either you are owing, whatever amount you claim to be owing and you will come and pay.

“We will meet with the banks and reconcile them, but the important thing is that you are owing , just come and pay. They have no choice, they have to comply. Do not forget we are working together with other relevant agencies on the matter.

“It is a very serious matter pertaining to the economy and the entire country as a whole. Nigerians are watching , the international community is watching and we are working with other agencies, the Nigeria Police, Security and Exchange Commission, NDIC, etc. All hands are on deck, there is no way that we will not accomplish this task of recovering this money.

“It is a shock to me; I never realised that any bank anywhere in the world will give such magnitude of money without any collateral. I am learning about it for the first time, it is amazing to me.

“The other security agencies are right inside the banks now. They are working, and by next week, I will give an update.”

She said only one of the bank chiefs who was outside the country at the time of the CBN revelation was not with the EFCC.

According to her, names of those who have paid up their debts will be de-listed as soon as they pay up their debts.
“ Well, one is outside the country, and the others are with us. We will give feed back on those that have paid. I will be briefing the media to remove the names of those that have paid, but they are speculating that one escaped abroad,” Mrs Waziri said.

On the recent statement by the United States Secretary of State, Mrs Hillary Clinton, the EFCC boss said events had overtaken the development, as the anti- graft agency had demonstrated that “action speaks louder than words. We do not need to be talking about it, action speaks louder than words. It has been over flogged, it is enough, we should leave it at that.”

On how the EFCC is gaining the sympathy of Nigerians, she said : “ Many Nigerians now believe in us, gradually, we will get there.”

On how, the judiciary should assist the EFCC, Mrs Waziri said: “ This is one area where we need the support of the media because of the frivolous court interlocutory injunctions given by judges.

“All the time, this stalls our cases. Judges should put down their feet and ensure that this distraction is stopped.

Imagine the case of Madoff in the United States, the case was dispensed with within two weeks. What about O.J Simpson’s? It was double murder and the case was dispensed with within two years. Why can’t we have cases fast-tracked , within the shortest possible time?

“That is why, I am still appealing for special courts because of the nature of the judiciary in this country. It is people who do not want to face reality that attack the EFCC. They like to blackmail the EFCC when the passports of indicted people are released. We need the support of every body in this war against corruption.”

Mrs. Waziri said the anti-graft agency would not allow itself to be frustrated by the antics of people who want the status quo of corruption to subsist in the country.
More names of debtors coming– CBN

Meanwhile, The CBN yesterday in Abuja, said more names of those owing the five banks whose Managing Directors were removed last Friday, would soon be released.

The apex bank sacked the bank chief executives for incompetence on debt management and consequently injected N400billion to boost their operations.

The affected banks are Intercontinental Bank, Oceanic Bank, Union Bank, Finbank and Afribank.

According to the statement, the banks are exposed to the capital market to the tune of N500billion out of the N800billion exposure by all the banks.

The CBN said the capital market lost more than 70 per cent of value in stocks in less than a year from 2008 and 2009, making the banks to fall short of standard.

The sack of the chief executives was followed by a publication of individual and company names of debtors to the banks, in which many prominent business magnates featured.

However, the CBN in the statement, admitted errors in the titles of some agencies indebted to the banks.
“Meanwhile, more lists of other debtors and defaulters are being compiled and will be published in due course,” a statement from the regulatory body said.
CBN asks debtors with doubtful figures to reconcile

In a related development, the apex bank has asked banks’ debtors who disagree with the published debt figures to reconcile with the affected banks.

“The general public and all concerned should note that the list published is as at 31st May, 2009 and if any of the defaulters/debtors have made any repayments after that date, they should sort it out with the relevant bank”, it said in a brief statement.

It also corrected what it said was an error in the title “Accountant General” under Intercontinental Bank Plc list, which it said should read “Accountant General of Zamfara State” while the name “Delta State Government” under the Oceanic Bank list, should read “Delta Steel Company.
Mobitel faults CBN on list of debtors

The management of Mobitel Nigeria limited, yesterday faulted the Central Bank of Nigeria, CBN on the list of debtors that resulted in the sack of five bank managing Directors.

The telecommunications company, said that going by the inconsistencies on the list, a proper probe should be conducted to find out if people did not use the opportunity to get at their perceived enemies.

Mobitel was actually reacting to its inclusion in the list of debtors linking it to about N1.3b debt to Intercontinental Bank.

Spokesperson of the company, Mr Okon Iyanan, told Vanguard that contrary to the CBN’s list of debtors, Mobitel had cleared every outstanding debt to Intercontinental Bank as far back as 2008, and did not see reason why the company’s name would be linked to such a damaging scenario playing out in the banking sector now.

According to Iyanam, “ I think that somebody wants to use this opportunity to get at their perceived enemies or how can one say that Mobitel is still owing a bank that has given its duly executed Deed of Release in line with the settlement arrangement.

“As a matter of fact, we also have a letter written by the bank to that effect, which dated as far back as August 2008. In fact some of the things happening in this country is to say the least, terrible.”

A copy of the letter allegedly written by Intercontinental Bank to Mobitel, made available to Vanguard, confirmed that the company was in the clear to any indebtness to the bank.

The letter dated August 8, 2008 and signed by two Loan Recovery officials of the bank, Kehinde Okelade and Ifeanyi Onyimadu, read in part “ we acknowledge the receipt of your Skye bank draft for the sum of 1000,000,000.00 being the full and final settlement of your company’s outstanding indebtedness to the bank. Further to the above, please find attached, 8 copies of the Deed of Release duly executed by the bank in line with the settlement arrangement.”

However, efforts to get the Corporate Affairs of the bank to confirm if the bank actually did get value of the draft proved abortive as the phones rang without anybody picking them
Otedola reacts, too

Mr. Femi Otedola, in his reaction said his alleged indebtedness to Union Bank to the tune of N6 billion, in an advertorial by the Central Bank of Nigeria was caused by huge losses as a result of the slump in oil price from $147 to $36, coupled with the devaluation of the naira.

According to him: “When we sold the oil, exchange rate was N116 to the dollar but when we wanted to repurchase the dollar, the exchange rate had gone up to N156 to the dollar. That variation alone created a massive loss on us. But Zenon being a responsible corporate entity entered discussions with Union Bank on the issue. We decided to take our loss in our stride.And as at July 29th, Zenon Petroleum and Gas paid the sum of N3billion into the account of Union Bank which was acknowledged by the bank.”

He further declared that all his loans are fully collaterised, adding ” it bears restating here that Zenon will always fulfil its obligations to its bankers and creditors.”
Oceanic Bank petitions President

Oceanic Bank under the management of Dr. Cecilia Ibru has raised a petition to the President, alleging that “the conclusion in the context of section 33 is therefore premature, smacks of pre-emption of the examination results and would support the view that the CBN Governor already had a mind-set on the issue and was only justifying a preconceived course of action by ordering an inspection.”

In the petition by R. Ajibola Oluyede TRLPLAW, Lagos, the petitioner stated that Section 35 of BOFI prescribes that the CBN must be satisfied that the bank examined under section 33 “is in a grave situation as regards the matters referred to in section 33(1) of the Act” before the CBN Governor can exercise the power to order “for reasons to be recorded in writing” the removal of any manager, officer or director of the bank examined

The petition further said: “Our client is being punished because of its heavy support for the importation of petroleum products, which is an essential commodity, and without such support could have become scarce and result in political upheaval.

To ensure that the country has uninterrupted supply of petroleum products, banks finance importers of petroleum products. These importers are licensed and duly approved by PPPRA, an agency of the government, which issues importers with import quotas based on which it pays subsidies on imports of Kerosene and Petrol.

“Based on amounts advised by Oceanic Bank’s customers, over N20 billion is yet to be paid by PPPRA to these customers’ accounts with Oceanic Bank in respect of LCs dating as far back as December 2008. The bank has fully paid the overseas suppliers whilst PPPRA is over 8 months in arrears in reimbursing the bank. There was a letter from the Association of Major Marketers of petroleum products to the PPPRA advertised on page 16 of the Punch newspaper of Tuesday 18th August 2009, which confirms that PPPRA owes members of their association over N70 billion. How are the banks that have in good faith supported the government’s petroleum subsidy programme to be held responsible for the delay by PPPRA to pay?”
HOS tells permsecs not to move funds

The Head of the Civil Service of the Federation, Mr. Stephen Oronsaye, has told Permanent Secretaries to ensure compliance with the directive issued by the Secretary to the Government of the Federation to ministries, departments and agencies not to withdraw funds or close their accounts in the five banks where the Central Bank of Nigeria effected some changes.

Mr. Oronsaye said this when he met with all Federal Permanent Secretaries yesterday in Abuja .

He reiterated his earlier statement that the action of the CBN was to pre-empt any chaotic situation and the injection of funds into them has stabilized the liquidity problem that might have arisen in the banks.

He urged the Permanent Secretaries to ensure that normal banking transactions are carried out between the banks and all MDAs and to further enlighten their staff members on the facts of the situation.

The Secretary to the Government of the Federation, had last Monday, issued a circular advising MDAs not to move their accounts from the affected banks. This measure was also endorsed by the Federal Executive Council at its meeting on Wednesday.