biina:

@naijaking1
An armed robber is an armed robber because he robs people at gun point, and the only thing that changes after he has been convicted in court is that he becomes a convicted armed robber. It is obvious you just pander the phrase 'innocent until proven guilty' (where the innocent/guiltyis wrt to the law not the truth or morality) and have little idea of the role or how the legal system works.

Listen to yourself, a convicted armed robber, a convicted criminal? What school did you attend? You're either a criminal or you're not(maybe an alleged criminal).
A person becomes an armed robber after he's been convicted, not before. Before conviction he's an alleged armed robber with equal rights and privilages of a free/democratic society. Truth and morality? I have told you not to use those words with reference to our banking system in the past, because they're subjective.

Despite packing explosives in his under wear and trying to kill fellow passengers with a bomb over Detroit, your brother Mutallab is still being addressed as an alleged underwear bomber by civilized societies. Unfortunately, your primitive argument infers that he should have been referred to and treated as a terrorist bomber without due trial--not that I would mind, but that wouldn't be civilized. Do you even understand what it means to be civilized

Its bad enough that you are convinced it is the law courts, and not auditors, that are responsible for determining if bank statements were falsified, but worse is the fact that you cannot seem to put up a coherent argument without resulting to [b]persona[/b]l comments.

In your books, Mutallab should have been shot at the scene by the FBI agents who arrested him, but he's being tried and awaiting a judge
I certainly would not have wasted my time arguing with anybody who doesn't understand the basic concept accussation, trial, and conviction. I see it's the cockeyed premise you and Sanusi have chosen to argue, prosecute and convict hardworking bankers, shareholders, and employees in Nigeria

I am not interested in your academic background (though your posts makes it easy to ball park), nor am I interested in your attempts to degrade the discussion to an assessment of the individual. If this is all you have to offer, it is simply pathetic, and you have my sympathy.

Bringing up academic qualifications(me, you, Sanusi, Soludo) is important, because it makes all the difference when discussing concepts such as morality, religion, law, and banking. While Sanusi seems to only understand the risk management aspect of banking, Soludo has a global view of the subject.

In law, innocent or guilty, is with respect to the law and justice, and has little to do with the truth or morality e.g. being found guilty does not mean you committed the act, and being found innocent doesnt mean you didn't commit the act.

Your example of mutallab is wrong, cos he didnt blow up the plane, hence the intentions are alleged. On the other hand, the 911 actors are terrorists even though they were never tried (they were terrorist because of their actions, not a court conviction).

An armed robber is an armed robber because of what he does, same as a doctor is doctor, or a teacher is a teacher, because of what he/she does. You are a criminal if you commit a crime, irrespective of if you are caught or not. Being charged to court and found guilty simply makes you a convicted criminal.

It amazes me how you cannot (or refuse to) distinguish between committing an act and being found guilty of a crime. If you slap someone in front of credible witnesses, it becomes a fact that you did slap someone, which is different from saying you are guilty of assault (that is a legal issue).

The bank books were doctored by the executives, and that is a fact based on the evidence of the audit and other relevant circumstantial evidence, which is different from saying that they are guilty of crimes like embezzlement or fraud (that is a legal issue). Doctoring books is not a crime (else you can pull it out of a the CP act). I need an auditor, and not a judge, to tell me they doctored their books, but need a judge + prosecutor to determine if they are guilty of a crime and what the appropriate punishment should be if needed. That is why you have expert witnesses in court cases, as they are the ones who establish the facts of the matter, while the judge applies the law.

Its so simple, I am shocked you cant get it.

biina:

An armed robber is an armed robber because of what he does, same as a doctor is doctor, or a teacher is a teacher, because of what he/she does. You are a criminal if you commit a crime, irrespective of if you are caught or not. Being charged to court and found guilty simply makes you a convicted criminal.
Its so simple, I am shocked you cant get it.

For you to conclude that an armed robber is an armed robber, you have to have a confirmation or a confession. Many times, the accused armed robber denies being an armed robber, because of that doubt and denial, and no matter how strong your evidence, the person must then be tried and convicted a robber, otherwise he remains an accused armed robber, not an armed robber.

Making exceptions for Mutullab simply undermines your own argument, because in primitive America, he would have been executed on the spot by people with your type of mind-set---thank God mob lynching was outlawed in many civilized countries, except in your mind and that of Sanusi.

I am a doctor because I carry a paper that identifies me as such, I agree that I am a doctor, so does the teacher, the accountant, etc. Have you ever seen an armed robber walking around with an identification showing that he's a robber? This is because he doesn't confess to being a robber, so even if you arrest him in a likely robbery act, he still needs to be tried and convicted, and hopefully punished. It's called due process, and everybody is entitled to it in a civilized society, yes everybody: the accused armed robbers, the prostitutes, the forgers, the embezzlers, and even those accused of cooking books by Sanusi

naijaking1:

For you to conclude that an armed robber is an armed robber, you have to have a confirmation or a confession. Many times, the accused armed robber denies being an armed robber, because of that doubt and denial, and no matter how strong your evidence, the person must then be tried and convicted a robber, otherwise he remains an accused armed robber, not an armed robber.

Making exceptions for Mutullab simply undermines your own argument, because in primitive America, he would have been executed on the spot by people with your type of mind-set---thank God mob lynching was outlawed in many civilized countries, except in your mind and that of Sanusi.

I am a doctor because I carry a paper that identifies me as such, I agree that I am a doctor, so does the teacher, the accountant, etc. Have you ever seen an armed robber walking around with an identification showing that he's a robber? This is because he doesn't confess to being a robber, so even if you arrest him in a likely robbery act, he still needs to be tried and convicted, and hopefully punished. It's called due process, and everybody is entitled to it in a civilized society, yes everybody: the accused armed robbers, the love-peddlers, the forgers, the embezzlers, and even those accused of cooking books by Sanusi

Again being convicted or exonerated has little to nothing to do with the truth. The courts do not establish the truth, they apply the law.

For example, you can check the FBI most wanted list, Usama is wanted for "MURDER OF U.S. NATIONALS OUTSIDE THE UNITED STATES; CONSPIRACY TO MURDER U.S. NATIONALS OUTSIDE THE UNITED STATES; ATTACK ON A FEDERAL FACILITY RESULTING IN DEATH'. He has not been tried talk less of conviction. There is no 'alleged , ' . But according to you, the FBI is uncivilized and want to lynch him

The executives doctored the books of their banks and it is an established fact. You can delude yourself into thinking otherwise, or anything else that lets you sleep at night. 

^^^
You're becoming incoherent.
Truth is relative. What is true to you, the accuser is not always true to the accussed. That's why we have the courts.

naijaking1:

^^^
You're becoming incoherent.
Truth is relative. What is true to you, the accuser is not always true to the accussed. That's why we have the courts.

There is nothing relative about the truth or facts (you can go and review their definitions), and it is not the point of view of the accused or the accuser.
The courts do not establish the truth, evidence and witnesses do. The court applies the law.

It is a fact that those banks were borrowing without repaying from the EDW (otherwise why are they repaying their CBN debts currently).
It is a fact that they had non-performing loans that were not reflected on their books (otherwise why are some entities repaying their loans).
It is a fact the were making losses when their books claimed otherwise (otherwise why borrow and not repay if you are healthy)
Hence it becomes fact that they doctored their books because the evidence and witnesses says that the executives doctored their books.
If you dispute any of the above as fact, provide counter evidence.

Black is black because it is black, and one doesn't need a law court to establish it as black, but then you are free to call it white, if it lets you sleep at night 

biina:

There is nothing relative about the truth or facts (you can go and review their definitions), and it is not the point of view of the accused or the accuser.
The courts do not establish the truth, evidence and witnesses do. The court applies the law.

Black is black because it is black, and one doesn't need a law court to establish it as black, but then you are free to call it white, if it lets you sleep at night

There's your foundamental error!
The whole function of a court is to get to the truth, using the help of the tripod(Judge, prosecutor, and defendant)
In addition to trials, investigations, and settelements, the courts also do interpret the law.

naijaking1:

There's your foundamental error!
The whole function of a court is to get to the truth, using the help of the tripod(Judge, prosecutor, and defendant)
In addition to trials, investigations, and settelements, the courts also do interpret the law.

In addition? You are obviously out of your element.
I guess when a judgment is overturned after an appeal, the truth has changed accordingly?
Like I said before, feel free to believe anything that lets you sleep at night.

@naijaking, why are you wasting your time with biina, some have made up their minds to be summarily unreasonable just because one upstart decided to accuse everybody of being a criminal and so the whole nation should leapfrog behind him in his stupidity. The first actions of Sanusi from August 14 were wrong, so were the second, third and last ones. He is trying to right a wrong because his consience will never rest. May he continue to blunder till his mistakes will grind the nation to a halt.

biina:

In addition? You are obviously out of your element.
I guess when a judgment is overturned after an appeal, the truth has changed accordingly?
Like I said before, feel free to believe anything that lets you sleep at night.

I'm surprised you're so basic in your understanding: the lower court, appeal courts, and even the supreme courts are known as court in this argument. Maybe, it's the use of English

naijaking1:

I'm surprised you're so basic in your understanding: the lower court, appeal courts, and even the supreme courts are known as court in this argument. Maybe, it's the use of English

I have simply asked you if the truth changes with each change in court ruling or only the supreme court knows the truth?

Truth and facts are not changelings, nor do they depend on a sole confession.
That you claim/confess to be a doctor does not make you a doctor, but rather facts like if you passed medical school, are recognized by the professional body, are practicing in the profession etc are what establishes the facts. A court will not decide if you are a doctor, the facts will. But the courts could punish you for impersonationg a doctor if the facts establish that you are not one.

So (let me know if I am wrong), by your philosophy
- Nzeogwu and co were 'alleged' coup plotters, simply because they weren't convicted in court, even though the evidence are clear on the issue?
- Bush and the US government did not misrepresent the truth, even though we are yet to find the WMD that were suppose to be in Iraq?
- Hitler did not persecute the Jews, afterall he was never convicted of it?
- Seun does not own NL because a court has not ruled so?

This is simply hilarious and I cant imagine how your dislike for Sanusi can push you beyond reason.

But do not despair, the EFCC is taking steps against the executives, and if and when they are convicted, I hope you will be man enough to call the executives criminals , and not turn your back on the judicial system that you are hiding behind now, by calling it an unfair trial. After all, the court decides what is true abi?

biina:

I have simply asked you if the truth changes with each change in court ruling or only the supreme court knows the truth?
Truth and facts are not changelings, nor do they depend on a sole confession.
That you claim/confess to be a doctor does not make you a doctor, but rather facts like if you passed medical school, are recognized by the professional body, are practicing in the profession etc are what establishes the facts. A court will not decide if you are a doctor, the facts will. But the courts could punish you for impersonationg a doctor if the facts establish that you are not one.

Yes, a court can decide if I'm a doctor or not, especially if there is a contention about my qualifications. I know many people who satisfy the conditions you listed above, and yet are not "doctors"-----don't argue with me on this one, you can't win it.

So (let me know if I am wrong), by your philosophy
- Nzeogwu and co were 'alleged' coup plotters, simply because they weren't convicted in court, even though the evidence are clear on the issue?
- Bush and the US government did not misrepresent the truth, even though we are yet to find the WMD that were suppose to be in Iraq?
- Hitler did not persecute the Jews, afterall he was never convicted of it?
- Seun does not own NL because a court has not ruled so?

Nzeogwu remains an alleged, and accussed coup plotter who was awaiting trial before the northern boys staged a counter coup.
Have you heard from ultra.-Nazis about Hitler's position? They deny everything you said about his killing the Jews, once again, look it up it in the public domain.
Of course, the court maybe called to decide ownership of N/L if somebody begins to appropriate the forum to himself, it real, and has happened in other websites.
Once again, I don't know why you don't even know these basic things, and you're here blwing the trumpet for our CBN governor

[/quote]
[quote]

This is simply hilarious and I cant imagine how your dislike for Sanusi can push you beyond reason.

But do not despair, the EFCC is taking steps against the executives, and if and when they are convicted, I hope you will be man enough to call the executives criminals , and not turn your back on the judicial system that you are hiding behind now, by calling it an unfair trial. After all, the court decides what is true abi?

The better we wait for the investigative agencies the better. They may find something real, or all these may simply turn out to be wild and false accusation. Oh, I forgot that the issue is that you don't have time to wait for the agencies to conclude their investigations and trials before convicting people.

I guess that response makes your position quite clear.
Hence, your definitive statements about Sanusi damaging the economy are hypocritical, after all, the issue is under dispute, and has not been proven in a court of law. Henceforth, please desist from making such statements as regards what Sanusi did or the effects of his actions in the future.

biina:

I guess that response makes your position quite clear.
Hence, your definitive statements about Sanusi damaging the economy are hypocritical, after all, the issue is under dispute, and has not been proven in a court of law. Henceforth, please desist from making such statements as regards what Sanusi did or the effects of his actions in the future.

Another bad example. Sanusi is a public offical, we can criticie him and even accusse him of wrong doing, but only a court can try and convict him.
Now, which of your elementary school civic lessons did you miss that I have to use my precious N/L time to teach you about the courts and their functions.---- not sharia of course.

naijaking1:

Another bad example. Sanusi is a public offical, we can criticie him and even accusse him of wrong doing, but only a court can try and convict him.
Now, which of your elementary school civic lessons did you miss that I have to use my precious N/L time to teach you about the courts and their functions.---- not sharia of course.

oh! double standard eh?
So you can accuse and pass judgment on Sanusi, but not so on the sacked executives or anyone else (including Nzeogwu that was also a public official). I thot you said only the courts can establish the truth.
You want to have one set of rule for the goose, and another for the gander?
You my friend are an hypocrite in every ramification of the word.

BTW speaking of elementary classes, seems you missed several spelling classes

@biina
Must you argue blindly? Cant you see that you lack basic understanding of what a democratic society is? Or even of the age we live in. Stop disgracing yourself in a public domain!

biina:

oh! double standard eh?
So you can accuse and pass judgment on Sanusi, but not so on the sacked executives or anyone else (including Nzeogwu that was also a public official). I thot you said only the courts can establish the truth.
You want to have one set of rule for the goose, and another for the gander?
You my friend are an hypocrite in every ramification of the word.

BTW speaking of elementary classes, seems you missed several spelling classes

Accussing Sanusi(and other public office holders) of wrong doing is not the same as Sanusi accussing/alleging/convicting/punishing people for offences he and him alone has sole jurisdiction over. Why is this too difficult for you to understand?
You're right, sometimes I mispell while typing, I think they called it typographical errors. Once they make a machine that could help you type as fast as you think, I will solve that problem.
But for a grown-up man to walk around not knowing the full function of our court? That's got to be scarry, and you should really get a small book to educate yourself about basic civics. More scarry is the possibility that Sanusi himself thinks and misunderstands this small basic approach to governance too.

naijaking1:

Accussing Sanusi(and other public office holders) of wrong doing is not the same as Sanusi accussing/alleging/convicting/punishing people for offences he and him alone has sole jurisdiction over. Why is this too difficult for you to understand?
You're right, sometimes I mispell while typing, I think they called it typographical errors. Once they make a machine that could help you type as fast as you think, I will solve that problem.
But for a grown-up man to walk around not knowing the full function of our court? That's got to be scarry, and you should really get a small book to educate yourself about basic civics. More scarry is the possibility that Sanusi himself thinks and misunderstands this small basic approach to governance too.

Like I said before, you want an uneven playing field.

Sanusi is not alleging the doctoring of books or the mismanagement of funds; the evidence are there for all (except the likes of you) to see. The CBN simply acted on the evidence available.Sanusi wasnt the auditor that inspected the bank books nor was is he the one that keeps the EDW records. There were suspicions and an audit was carried out. Sanusi acted on the result of the audit. Are you now accusing the auditors of foul play as well or that the EDW records under Soludo were falsified?

Sanusi has not convicted anyone. The audit revealed impropriety, and Sanusi acted appropriately by removing the executives. It is left to the courts to determine if the impropriety was criminal (and not to determine if there were any impropriety). But seems you would have preferred Sanusi shirking his responsibility so that the executives can continue mismanaging the banks and doctoring the books.  But sorry to disappoint you, he wont, and the executives duly got fired.

Now if you feel so disgruntled with Sanusi's actions, please feel free to seek redress in the court of law. After all, I expect you have evidence to support your view that the executives werent doctoring their books (or you dont? ).

Just so we are clear, the executives doctored their books!

^^^
If Sanusi has not convicted anybody, why did he call for some people still awaiting trial to be shot?

naijaking1:

^^^
If Sanusi has not convicted anybody, why did he call for some people still awaiting trial to be shot?

He said they deserved to be shot, which was simply his own opinion that carries no legal weight, and is far from a conviction (which only the courts can do). I dont remember a law against the CBN governor having his own opinion

Constituted authorities such as the CBN governor know better that to say things that will interfer, violate, and prejudice impending court cases, you know that.
A minister saying someone in his office is corrupt and deserved to be shot is not the same thing as common masses accussing the minister of wrong doing. Of course Sanusi has a right to first amendment, or free speech as an individual, but when he speaks as the CBN governor, his pronouncements carry the weight of that office, because it goes along way to biasing many opinions down stream, rightly or wrongly.
Could you imagine the president or acting president say something like that? His speech would cascade into a ripple effect that would influence the action of the police, army, national assembly, and yes even the court.

naijaking1:

Constituted authorities such as the CBN governor know better that to say things that will interfer, violate, and prejudice impending court cases, you know that.
A minister saying someone in his office is corrupt and deserved to be shot is not the same thing as common masses accussing the minister of wrong doing. Of course Sanusi has a right to first amendment, or free speech as an individual, but when he speaks as the CBN governor, his pronouncements carry the weight of that office, because it goes along way to biasing many opinions down stream, rightly or wrongly.
Could you imagine the president or acting president say something like that? His speech would cascade into a ripple effect that would influence the action of the police, army, national assembly, and yes even the court.

So all those pubic officials that condemned MEND for the warri bombing should have kept quiet? Do their comments change the fact that MEND bombed the government house in warri?

In the same vein, what has Sanusi's comment got to do with the fact that the executives doctored the books? You might have a problem with Sanusi expressing his personal opinion in the media, but that those not change the facts that the executives doctored their books.

^^^
Back again, round and round the argument goes. "The executives doctored their papers" has been Sanusi's mantra, you're free to chant it as many times as you like, but it doesn't change the fact that those are merely allegations since the executives have not confessed to it and no court has convicted them yet.
Your MEND example is poor, but since you didn't even know the full function of the court, how could I have expected you to understand how prejudicial statments from Sanusi have been.

naijaking1:

^^^
Back again, round and round the argument goes. "The executives doctored their papers" has been Sanusi's mantra, you're free to chant it as many times as you like, but it doesn't change the fact that those are merely allegations since the executives have not confessed to it and no court has convicted them yet.
Your MEND example is poor, but since you didn't even know the full function of the court, how could I have expected you to understand how prejudicial statments from Sanusi have been.

MEND example is poor, why?

That the bank doctored their books is not a matter of Sanusi's opinion, but of the data from the EDW, the stock market, results of the audit etc or are all these based on Sanusi's opinions as well? The facts are there for all to see. Sanusi's personal opinion will not change the facts.

Its just funny that you feel a confession is needed to establish the truth

BTW the executives doctored their books!

biina:

MEND example is poor, why?

[b]That the bank doctored their books is not a matter of Sanusi's opinion, but of the data from the EDW, the stock market, results of the audit etc or are all these based on Sanusi's opinions as well? [/b]The facts are there for all to see. Sanusi's personal opinion will not change the facts.

Its just funny that you feel a confession is needed to establish the truth

BTW the executives doctored their books!

Although I wont say I fully understand the highlighted but you need to be careful because "Doctoring of books" is a matter of Conjecture.

I say so because it is common knowledge the account balancing and book keeping is a matter of declaring you assets/earnings against your liabilities/expenditure. Now the interpretation of a non-performing loan is also based on interpretation.

Even as we haven't the details on whet the extent of doctoring was. The EDW was always paid back by the banks and wasn't open indefinitely as you making it sound the issue I beleive you are talking about was the level of indebtedness as a ratio of the banks total capital.
Borrowing money from EDW is not a problem on its own but might indicate liquidity problems.
But that was why the EDW was created by Soludo in the first place.

The results of the audits were based on sanusis interpretation and is still being disputed by the likes of PHB and Oceanic Banks.

All banks with investment operations are exposed to the stock market crash even if they had done it in Europe, Asia or US. So I dont know what you mean when you say stock market.

^^^^^
Thank you Sir, you have saved me from repeating the same thing for the umptenth time.
I just don't know how Sanusi hopes to succeed by sending barely literate publists to defend him here on N/L

adigun101:

Although I wont say I fully understand the highlighted but you need to be careful because "Doctoring of books" is a matter of Conjecture.

Conjecture? If you fail to present a true picture of your accounts, you have doctored your books. That is why you have auditors, because there is a right way of doing it.

I say so because it is common knowledge the account balancing and book keeping is a matter of declaring you assets/earnings against your liabilities/expenditure. Now the interpretation of a non-performing loan is also based on interpretation.

Based on interpretation? There are standards for classifying loans as non-performing assets and provisioning for them, which are clearly defined in the SAS 10 as
- Interest and/or Principal outstanding for over 90 days but less than 180 days to be classified as 'Substandard' and provisioned at 10%
- Interest and/or Principal outstanding for over 180 days but less than 360 days to be classified as 'Doubtful' and provisioned at 50%
- Interest and/or Principal outstanding for over 360 days to be classified as 'Lost' and provisioned at 100%
Sanusi didn't write the SAS, the NASB publishes it.

Even as we haven't the details on whet the extent of doctoring was. The EDW was always paid back by the banks and wasn't open indefinitely as you making it sound the issue I beleive you are talking about was the level of indebtedness as a ratio of the banks total capital.
Borrowing money from EDW is not a problem on its own but might indicate liquidity problems.
But that was why the EDW was created by Soludo in the first place.

The EDW had a tenure of 360 days, and the banks were simply claiming they had not defaulted yet (not that they were repaying - paying back to borrow a larger sum does not qualify). The issue was that for the 6 month since the opening of the EDW, those guys were increasing their obligations to the CBN. If you are as solvent as you claim in your books, then why are your persistently borrowing?
The banks were insolvent before the EDW was created, yet their statement were painting rosy pictures.

The results of the audits were based on sanusis interpretation and is still being disputed by the likes of PHB and Oceanic Banks.

Audits are not based on Sanusi's interpretations. The SAS is clear on the issues.

All banks with investment operations are exposed to the stock market crash even if they had done it in Europe, Asia or US. So I dont know what you mean when you say stock market.

Information from the market lets us know how much the banks lost to the crash, and its not some figures that Sanusi cooked up.

Any honest person that processes all the available information will reach the same conclusions. The bank statements simply didnt reflect a true picture of the banks.

The CBN is not about Sanusi or Soludo.

The perfect banking sector as far as Soludo was concerned is

A vibrant one capable of providing alternate source of long/short term funding to the economy.(Private and public)
Contributing its quota in form of employment and job creation.
Expanding Nigeria's economy by way of their own expansions abroad.
Wealth creation etc
But he must have been guilty of trying to achieve this in a very short time and at the same time relegating a lot of CBNs core responsibilities which led to the erosion of standards.
But no one can deny that at least he made huge strides towards achieving the set goals.

Sanusi on the other hand
Has followed the rules to the letter.
Pushed for a higher role for the regulator by way of ensuring ethical standards.
He has pushed policies which would check the occurence of crisis in the banking sector and curtail excessiveness.
But at the expense of a vibrant/growing banking sector.


I guess its just a matter of which you place more importance on.
For me, I am a pure capitalist and you can guess the model I prefer.

That which is better should be evaluated taking into context the current state of affairs in the sector. If you have an overly conservative sector, where banks have adopted a 'siddon look' approach, then a 'Soludo' is required to inject life into the system. On the other hand, if the sector is rife with malpractice and flaunting of regulation, then you need a Sanusi type to bring things to order. If the system is a mix of the two or something entirely different, you should appoint someone with the skill set to deal with those issues. Summary, the best choice is picking the right tool for the job.

Current banking sector in Nigeria needs a 'Sanusi' to clean the rot that has been festering for a few decades. If after his first tenure, the system needs something else that he cannot provide, he should be replaced with someone else who can.

Sanusi’s First Bank: The Man’s Hypocrisy And Double Standards

Apr 6th, 2010 By Victor Shodipo


The statement below is an excerpt from an Equity Research Report of StanbicIBTC Plc (StanbicIBTC is a leading investment firm and deeply involved in CBN’s reforms as Adviser) published in ThisDay of Sunday, March 21, 2010, page 31.


“Given First Bank of Nigeria’s exposure to the oil and gas company SeaWolf, the bank faces risks of oil price volatility and instability in the oil and gas sector. The bank’s credit exposure to the company is currently about 29% of its shareholders’ funds. The CBN has instructed the bank to reduce its exposure to 20% by 31 March 2010. The bank intends to sell down its exposure to 15% but we do not believe this is likely because of the current low risk appetite in the (banking) industry”.


In July 2007, First Bank provided SeaWolf a US$260m bridge facility for the following:


• To acquire 100% of the equity of Mosvold Jack up Ltd (a publicly traded offshore drilling company quoted on the Norway Oslo Exchange)

• To make scheduled payments for two rigs under construction (MSV 104 and MSV, renamed Oristetimeyin and Onome)

• Make down payments for the purchase of West Titania (now Delta Queen) from Seadrill and;

• Meet operational and administrative expenses.

The global economic crisis, which resulted in a huge dip in oil prices, had a negative effect on the quality of the loan and the bank had to convert some of it to equity and also extend the duration due to low cash flows from the project.
Source: Thisday, Sunday March 21, 2010.


This loan to a single company is currently 29% of FBN shareholders’ funds according to the Stanbic IBTC Plc equity report. As at September 2009, First Bank’s Shareholders funds stood at N309 billion. 29% of this comes to N89 billion. This means First Bank’s current exposure to just a single loan is N89 billion well above the 20% limit set by the CBN!


It is important to note that this loan is not performing as expected hence the bank’s initiative to convert part of the loan to equity and sell a portion.The Daily Independent Newspapers, it will be recalled on January 20, 2010, had done an extensive report on the shady dealings that went into this facility which was given when Mallam Sanusi was the Chief Risk Officer of First Bank and later supervised as its MD/CEO.


Despite the fact that this loan is of doubtful recovery, the CBN under Mallam Sanusi turned a blind eye to this facility. First Bank’s total provision was N29 billion when it should not have been less than N118 billion if the provision for SeaWolf alone is added. This loan also raises more fundamental issues.

• What sort of ‘Risk Expert’ will approve the granting of an N89 billion loan to a single company that as at the time of collecting the loan was less than a year old?

• The Company was incorporated the same year (2007) it applied and got $260 million facility from First Bank of Nigeria Plc.

• Is it not hypocrisy that the same Mallam Sanusi that recommended the approval of this loan now turns round and refers to other bank MDs’ as reckless?

• What could be more reckless than risking 29% of your shareholders’ funds on a single obligor that has no track record in its industry of operation?

• Is it not the same global economic crises that torpedoed this business that also affected the Nigerian stock market for which reason Mallam Sanusi invaded the targeted banks?

The above report clearly further reveals the hypocrisy of the Mallam Sanusi’s largely personal attacks on the removed bank Managing Directors. This is a loan that has gone totally bad or at best has entered the stage of doubtful recovery.

While CBN forced its captured banks to make full and immediate provision for all facilities of doubtful recovery on its books, Mallam Sanusi has secretly given First Bank up to 31 March 2010, to “reduce its exposure to 20% of shareholders funds.”

Clearly, what is good for Sanusi at First Bank is not good for other banks.

MR. AG PRESIDENT, NIGERIANS COUNT ON YOU TO RESTORE ECONOMIC SANITY AND PROGRESS.

SIGNED



VICTOR SHODIPO

RENAISSANCE PROFESSIONALS

victorshodipo@renaissanceprofessionals.com