In the three weeks since the Central Bank of Nigeria (CBN) wielded the sledgehammer against the chief executives and boards of five banks, there has been a rash of further developments. The CBN has published the list of debtors whose non-performing loans reportedly occasioned distress in the five banks. In tandem, the Economic and Financial Crimes Commission (EFCC) deployed over 100 operatives to arrest former bank executives in Lagos, while also issuing dire warnings to the debtors to pay their debts immediately or face the consequences.

By last weekend, the threats by the EFCC had yielded some results. Some of the debtors had paid back about N44.7 billion. Two days ago, the former bank chiefs were formally arraigned at the Federal High Court in Lagos on an assortment of 117 charges, including granting uncollaterised and bad loans running into several billions of Naira. Those arraigned were Okey Nwosu (formerly of FinBank), Sebastain Adigwe (Afribank), Cecilia Ibru (Oceanic), Bartholomew Ebong (Union Bank) as well as the Chairman of Intercontinental Bank, Raymond Obieri, alongside six other non-executive directors of the bank. Intercontinental's ousted chief executive, Erastus Akingbola, has since been declared wanted by the EFCC.

Certainly, there are genuine concerns about the thoroughness of the CBN before it embarked on its shock-and-awe approach that has reverberative consequences for the health and stability of the nation's economy at large. Since the CBN released the list of alleged debtors, many of the latter have taken out costly advertisements in the media to dispute the claims of indebtedness. Even those whose names were not supposed to be on the list were scandalised as debtors by the apex bank.

The CBN was unduly hasty in compiling, verifying and publishing the list of debtors. In particular, the needless drama that accompanied the exercise has created the unfortunate impression that it is a criminal offence to be a debtor per se. This is not correct. In fact, these are mostly civil contractual transactions that have been criminalised. Unless, of course, due diligence as well as conditions precedent were jettisoned in granting the credit, it is only normal in the course of banker-customer relationship to allow the appropriate civil mechanism to be applied.

Furthermore, it is embarrassing that the definition of non-performing loans has been reduced to the whims of the CBN. A painstaking evaluation of the loan portfolios of the banks would have revealed certain critical transactions that are indeed tied to the Federal Government. This is true, for instance, with regard to some of the loans in the downstream oil and gas subsector, where the borrowers are still being owed by government agencies. There are also contractors handling various projects, including power, who are being owed by the government. This makes it all the more pertinent to undertake the impact assessment of the flurry of measures by the CBN and the EFCC over the past fortnight. Suddenly, the EFCC for one, has become so active chasing bank executives around Lagos, when many crooked present and former public officials of questionable character have gone unmolested. By last Friday, the EFCC had recovered N44.7 billion. But that is a pittance - barely six per cent - when measured against the total sum of N747 billion owed the five banks. As the days ahead will reveal, it will take more than grandstanding to recover the outstanding sums. This is even more so where the government is linked to the debts.

There is another reason not to exonerate the government in responsibility for the fate of the five banks. The five banks are said to account for more than half of the banking sector's exposure to the capital market via margin loans. Last year, as the Nigerian capital market crashed, the Federal Government set up a committee headed by Vice President Goodluck Jonathan to proffer solutions to reflate the stock market. The committee had a large membership of key players in the private sector. But the committee was subsequently mired in politics that altogether ruined its mission. If that committee had delivered on its mandate, chances are that the quantum of margin loans might have been reduced - and therefore improved the health of the five banks.

In spite of the rationalisation by the CBN Governor, Mr. Sanusi Lamido Sanusi, there seemed to have been inordinate haste in undertaking the examination of the indicted banks only, rather than a wholesale examination of all the banks, whereupon the apex bank could have proceeded with its combination of resusitatory and punitive measures.

The CBN had only pored over the books of 10 banks. It declared five healthy, while the other five were hit instantly with the sledgehammer. At his London roadshow at the weekend, the CBN Governor was judgmental in proclaiming that he did not expect major surprises among the banks yet to be audited. It is curious that despite widespread statements by certain stakeholders that the CBN did not undertake the statutory special examination, which incorporates a right of reaction by the affected institutions whose CEOs and boards were sacked, neither the CBN Governor nor its officials have rebutted these allegations.

Without question, there were visible and not-so-visible signs of the rot in the banking system. With their books so regularly cooked up, there was financial sector growth, but real sector decay. There were also abuses of banking manuals by owner-managers who recklessly and carelessly embarked on self-dealing. Knowledgeable insiders contend that these infractions were generally system-wide. In fact, this was fostered by the tardiness of the CBN in its supervisory role - and heads have not rolled in the apex bank over the glaring laxity. In addition, the abuses were engendered by the lack of follow-through of the requisite accompaniment of the post-consolidation exercise.

However well-meaning the intentions of the CBN are, it must not fail to address raging speculations as to its ultimate goal in sanitising the banking industry. Since last week, the media have been abuzz with a rendition of a scoop published in March, this year, by Vanguard newspaper. No discerning mind can fail to notice that, by and large, the actions of the CBN Governor in handling the sick banks have followed the template published by Vanguard five months ago. It is useful to ask just why the CBN Governor is in a hurry to sell the five banks, using the subterfuge of the entry of foreign investors. Mr.Sanusi cannot in one breath claim that the five banks will not be nationalised, yet the terms under which the five banks received the N420 billion bailout without appropriation by the National Assembly, are such that the CBN can at its option convert to equity.

Ultimately, one of the lessons that will be learnt from the on-going exercise is that there are deeply entrenched private property rights involved in the fate of the five banks or any other that might suffer similar fate in the near future. All the affected banks are public limited companies with hundreds of thousands of shareholders. These shareholders have rights, which they can and should assert, in spite of the quest by Mr.Sanusi to sell the banks to so-called foreign investors

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