Sanusi lacks absolute power to sack bank chiefs - Court

A Federal High Court in Lagos on Thursday said the Governor of the Central Bank of Nigeria, Mallam Lamido Sanusi, lacked the absolute power to sack bank chiefs without disclosing the findings and recommendations of the special examination conducted into the books of the respective banks to the affected directors.

Sanusi had removed some bank directors in the wake of the banking reform exercise of 2009.

The CBN governor had claimed that the removal of the bank chiefs became expedient following the revelations contained in a special examination conducted into the books of all the 24 banks in the country.

Sanusi said the examination showed that the affected directors mismanaged the affairs of their respective banks and also put the banks in grave situation.

According to Justice James Tsoho, though the CBN has power under Section 35 of the Banks and Other Financial Institutions Act to regulate and control the business of banking, when such powers will fundamentally affect interested parties, there should be disclosure.

Justice Tsoho, who ruled on a suit filed by some aggrieved shareholders of Afribank against Sanusi's action, dismissed the preliminary objections filed by the CBN and its appointed directors, saying the objections could not be sustained in law.

The court held that the shareholders were able to convince the court that there was lack of good faith towards them and Afribank in the exercise of statutory powers conferred on the CBN and its governor.

The shareholders, who filed the suit through their lawyer, Onyebuchi Aniakor, include, Moses Oke, Rasak Mumuni, Akinsanya Sunday, Suleiman Babatunde and Igba Olatomide.

Defendants in the suit include Afribank MD, Nebolisa Arah, and four executive directors of the bank - Nnamdi Anammah, Isaac Alofoje, Joke Giwa and Stephen Adah.

The list of defendants also include Afribank chairman, Osa Osunde; Chkwuemeka Okwuosa, David Lawuyi, Ashim Oyekan, Bala Zakariya 'U, Rufai Muhammed and the Corporate Affairs Commission.

The CBN had contended that the court lacked jurisdiction to entertain the suit because the affidavit in support of the plaintiffs' suit did not allege that Sanusi's action was done in bad faith.

But the court overruled the objection and held that it could not be sustained in law.

The defendants have, however, appealed against the ruling. They have also filed a motion for stay of execution of the ruling.

The case has been adjourned to September 26.

www.punchng.com/Articl.aspx?theartic=Art20110617295473

As much I as I am against any form of looting of public funds, I am equally against using that as an excuse to run a script of those who think our fate are in their hands. Time will will tell that Sanusi has only sold a dummy to Nigerians,

Good morning CBN

Na today the courts wake up?

The case has been adjourned to September 26.

enough time to remove govt money sustaining them

court case upon court case

Hello SANUSI!!!!

This is interesting. The manner of removing the directors was improper.

Except for some, many others were self and Islamic bank serving! Shekinah!.

pls tell sanusi dis again.

Findings reveal that in several of the banks, the board of directors are totally ineffectual and almost irrelevant in the affairs of the banks. The CBN also had clearly decided to change the ownership of the banks, by preventing the previous shareholders from re-acquiring the shares. This issue has been most controversial because of the political implications. Various people argued that the entire exercise was mostly driven by politics. Perhaps, unknown to the CBN, the common belief among a large section of Nigerians is that because the North felt shortchanged by the Chukwuma Soludo led CBN consolidation reforms, the Sanusi led CBN is determined to bring the North back into the banking industry. The ongoing reform is seen from such prism. Governor Sanusi has strenuously strained to deny these allegations, but it would appear that the more he denied them, the stranger they became. Sources close to him told that he has given up efforts at denial and has adopted an indifferent attitude.
However, Sanusi appears to be the main culprit in the perpetuation of this conspiracy theory. Perhaps, unwittingly, he has provided the most active ingredient in spreading this rumour. A former Central Banker who spoke anonymously on the issue said, “Sanusi's insistence on determining the preferred bidders for the rescued banks creates the impression of ulterior motives on his part. If what he wants really is to recapitalize the banks, then all he should be interested in is setting broad guidelines for the exercise and not choosing those who should do it.”
However, the CBN has denied any involvement with the recapitalization exercise beyond supervisory roles. Abdullahi Mohammed, Corporate Affairs manager of the CBN, tol, “The CBN does not comment on the transactions. It is solely between the banks and interested parties.” Sanusi himself has said so at different fora. But findings by reveal a different story. can the CBN is the prime driver of all the transactions, in the Finbank/FCMB merger, Access Bank/Intercontinental, Habib/PHB, etc. In each of these transactions, CBN has been actively arranging, encouraging, discouraging and promoting bids as it pleases! The irony is that it is not even a secret. All over Broad Street and Marina, stories of these goings-on fly openly. Many respondents spoke to were puzzled why CBN insists on denying its deep involvement in the process, and more important, why it insists on controlling it.
Emma Nwosu, former MD/CEO of ACB International Bank Plc told BH, “it is CBN's meddlesomeness and inability to recapitalize the banks that constitute the greatest problems facing the reform agenda.”

na today them wake up? yeye!

Why people no dey comment nah, abi nairalanders don go sleep? where is sagamites et al?

odedele:

Findings reveal that in several of the banks, the board of directors are totally ineffectual and almost irrelevant in the affairs of the banks. The CBN also had clearly decided to change the ownership of the banks, by preventing the previous shareholders from re-acquiring the shares. This issue has been most controversial because of the political implications. Various people argued that the entire exercise was mostly driven by politics. Perhaps, unknown to the CBN, the common belief among a large section of Nigerians is that because the North felt shortchanged by the Chukwuma Soludo led CBN consolidation reforms, the Sanusi led CBN is determined to bring the North back into the banking industry. The ongoing reform is seen from such prism. Governor Sanusi has strenuously strained to deny these allegations, but it would appear that the more he denied them, the stranger they became. Sources close to him told that he has given up efforts at denial and has adopted an indifferent attitude.
However, Sanusi appears to be the main culprit in the perpetuation of this conspiracy theory. Perhaps, unwittingly, he has provided the most active ingredient in spreading this rumour. A former Central Banker who spoke anonymously on the issue said, “Sanusi's insistence on determining the preferred bidders for the rescued banks creates the impression of ulterior motives on his part. If what he wants really is to recapitalize the banks, then all he should be interested in is setting broad guidelines for the exercise and not choosing those who should do it.”
However, the CBN has denied any involvement with the recapitalization exercise beyond supervisory roles. Abdullahi Mohammed, Corporate Affairs manager of the CBN, tol, “The CBN does not comment on the transactions. It is solely between the banks and interested parties.” Sanusi himself has said so at different fora. But findings by reveal a different story. can the CBN is the prime driver of all the transactions, in the Finbank/FCMB merger, Access Bank/Intercontinental, Habib/PHB, etc. In each of these transactions, CBN has been actively arranging, encouraging, discouraging and promoting bids as it pleases! The irony is that it is not even a secret. All over Broad Street and Marina, stories of these goings-on fly openly. Many respondents spoke to were puzzled why CBN insists on denying its deep involvement in the process, and more important, why it insists on controlling it.
Emma Nwosu, former MD/CEO of ACB International Bank Plc told BH, “it is CBN's meddlesomeness and inability to recapitalize the banks that constitute the greatest problems facing the reform agenda.”

But what baffles me is that some people on this forum still say the man doesnt have a hidden agenda. The only question that I have been asking sanusi s supporters and they have been dodging is that why did sanusi allow unity bank to recapitalise through stock market and insist that other banks be sold?

I thank God that my prayer has been answered, when the whole bu ll shit started in 2009, I prayed to God to open the eyes of Nigerians to see that this man had a hidden agenda. Thank God he has done it. So it is left for our leaders to do the needful about Sanusi. Walahi talai sun mon bi lai, I will not pray for our leaders to remove him, if they like, let them remove him, if they like, let them allow him finish executing his agenda.

I hope that m.u.m.u faced Odein Ajumogobia will now see that Sanusi has a hidden agenda.

If the conventional banks are not dealt with, how wil Islamic Bank grow?

kafanchan:

But what baffles me is that some people on this forum still say the man doesnt have a hidden agenda. The only question that I have been asking sanusi s supporters and they have been dodging is that why did sanusi allow unity bank to recapitalise through stock market and insist that other banks be sold?

I thank God that my prayer has been answered, when the whole bu ll poo started in 2009, I prayed to God to open the eyes of Nigerians to see that this man had a hidden agenda. Thank God he has done it. So it is left for our leaders to do the needful about Sanusi. Walahi talai sun mon bi lai, I will not pray for our leaders to remove him, if they like, let them remove him, if they like, let them allow him finish executing his agenda.

I hope that m.u.m.u faced Odein Ajumogobia will now see that Sanusi has a hidden agenda.

There's only so much " I told you so" I can say to people.

The only way to resolve this issue is to make the findings in the account books of the affected banks public, y do we always hv to shroud things in secrecy

;DAhaa Ahaa Ahaaa!!! I laughed , this is just the begining.

I once asked the question: When Sanusi ordered the "Audit" of all the banks back then in 2009, why did he not wait till ALL THE BANKS have been audited (Unity Banks Audit wa snot yet done by then but some banks have been done) before going to the PRESS and pronouncing some banks, especially those controlled by Southerners, as inslovent?

How would he not encourage the rumor that "He has a hidden Agenda"?

And to make matters worse, he even appointed his Northern friends as Directors, in some of this bank .,.,.and they eventually dug the banks into a deeper hole?
Am not saying some of these Directors/Owners are saints (Ibru is a typical example) but why cant he just engender a level playing field and make everything transparent?
He reminds me of that crook called El Rufai and how he "privatized" our national assets like Nitel, to his friends at an under-valued amount!

Its only in Nigeria that these kind of things can happen and the perpetrators are walking scott-free, even boasting of being persecuted!

kafanchan:

Why people no dey comment nah, abi nairalanders don go sleep? where is sagamites et al?

So you want them to comment?

then make it the tread TRIBAL.

oh please the case is not over, you want people to comment of ongoing court cases?


there has been many court cases going left and right;

this is in the same week two bank shareholders lost out, then won again then lost out


WHAT IS THE HIDDEN AGENDA? ITS BEEN TWO YEARS NOW, THIS AGENDA YOU TALK ABOUT LIKE THE 'CABAL' IS NOT KNOWN?

he wants to sell the banks to muslims, he wants to sell it to northerners? he wants to 'revenge' what?

And to make matters worse, he even appointed his Northern friends as Directors, in some of this bank .,.,.and they eventually dug the banks into a deeper hole?

prior to the intervention they were no northern directors? 

just done a quick check, phb: 11 directors 3 northerners

oceanic bank, 3 out of 13 directors

these people could have been there for ages, yet they get accused for being part of some 'agenda', perhaps its a crime for northerner to aspire for any position nowadays

I once asked the question: When Sanusi ordered the "Audit" of all the banks back then in 2009, why did he not wait till ALL THE BANKS have been audited (Unity Banks Audit wa snot yet done by then but some banks have been done) before going to the PRESS and pronouncing some banks, especially those controlled by Southerners, as inslovent?

How can you wait when there are already people on the plane running outside of the country, there was 2-3 months interval
adverts and letters were already flying with propaganda of persecution. there are only two northern bank, and their edw transaction is not as much as the other banks

if/when a northern appoints a northerner it become some sort of agenda but when a southern appoints a southerner its perfectly acceptable ?

Dis Guy:

oh please the case is not over, you want people to comment of ongoing court cases?


there has been many court cases going left and right;

this is in the same week two bank shareholders lost out, then won again then lost out


WHAT IS THE HIDDEN AGENDA? ITS BEEN TWO YEARS NOW, THIS AGENDA YOU TALK ABOUT LIKE THE 'CABAL' IS NOT KNOWN?

he wants to sell the banks to muslims, he wants to sell it to northerners? he wants to 'revenge' what?

prior to the intervention they were no northern directors?

just done a quick check, phb: 11 directors 3 northerners

oceanic bank, 3 out of 13 directors

these people could have been there for ages, yet they get accused for being part of some 'agenda', perhaps its a crime for northerner to aspire for any position nowadays

What of Intercontinental bank? Incase you dont know, it is 2 directors out of 4 directors. Formerly there was none.

And you are not right by saying that PHB has 3 out of 13 directors. There is no bank in Nigeria that has up to 13 directors. Unless you are counting with the non executive directors.

If you want to be sincere with yourself, you will know that there is no way CBN will appeal the case and win this case because it involves violation of the natural law of fair hearing. What will they say made them violate the right of the directors to fair hearing? Bros, this is entirely different from the case of "sell the banks" and "dont sell the banks" that depend on how hard lawyers or analysts argue. This has to do with CBN auditing the banks and not issuing audit query before forming its opinion. Ask any lawyer or auditor, he/she will tell you "Sorry for CBN".
Bros, just be fair or impartial for once, why does CBN insist on selling or merging the banks, why not allow shareholders to pump in more money through stock market? Remember what Union bank shareholders told Sanusi last year :'Give us this bank, our pension is enough to recapitalise the bank". Why is sanusi insisting on selling it to Habib bank of pakistan?. And incase you dont know, Sanusi has lost many supporters lately, many eyes have opened since his insistence on Islamic banking. Mind you I am not against Islamic finace, but that is not the way it is being done in convetional countries. Nigeria is not a muslim country but Sanusi is trying to implement Islamic banking as if this is Pakistan. I am okay if it is done the way it is done in UK.

Dis Guy:

How can you wait when there are already people on the plane running outside of the country, there was 2-3 months interval
adverts and letters were already flying with propaganda of persecution. there are only two northern bank, and their edw transaction is not as much as the other banks

if/when a northern appoints a northerner it become some sort of agenda but when a southern appoints a southerner its perfectly acceptable ?

Your first paragraph is not true. Nobody was running out of the country. All the MDs were at that meeting when they were all fired. Fine, Sanusi might say he didnt want the so called guilty MDs to buy their way out and frustrate him from removing them that is why he acted hurriedly; but that is not tenable in a conventional court of law. It is only tenable in Sudan where he schooled. Nigeria is no Sudan.

kafanchan:

What of Intercontinental bank? Incase you dont know, it is 2 directors out of 4 directors. Formerly there was none.

And you are not right by saying that PHB has 3 out of 13 directors. There is no bank in Nigeria that has up to 13 directors. Unless you are counting with the non executive directors.

If you want to be sincere with yourself, you will know that there is no way CBN will appeal the case and win this case because it involves violation of the natural law of fair hearing. What will they say made them violate the right of the directors to fair hearing? Bros, this is entirely different from the case of "sell the banks" and "dont sell the banks" that depend on how hard  lawyers or analysts argue. This has to do with CBN auditing the banks and not issuing audit query before forming its opinion. Ask any lawyer or auditor, he/she will tell you "Sorry for CBN".
Bros, just be fair or impartial for once, why does CBN insist on selling or merging the banks, why not allow shareholders to pump in more money  through stock market? Remember what Union bank shareholders told Sanusi last year :'Give us this bank, our pension is enough to recapitalise the bank". Why is sanusi insisting on selling it to Habib bank of pakistan?. And incase you dont know, Sanusi has lost many supporters lately, many eyes have opened since his insistence on Islamic banking. Mind you I am not against Islamic finace, but that is not the way it is being done in convetional countries. Nigeria is not a muslim country but Sanusi is trying to implement Islamic banking as if this is Pakistan. I am okay if it is done the way it is done in UK.

I'm not a judge or law expert hence just state my opinion
i just did a quick check on their website, are you saying any northerner director in a bank is part of the 'agenda' ? what about the CEOs?
The shareholders are broke! they cant pump any money when they don't have money, the money required the money they are owing cant be raised on the stock market with their current state, Habib bank is a major shareholder of phb isnt/wasnt it? part of the requirement for new investors was capacity and resources or is it because they are from Pakistan? what if a UK bank comes along would that be suitable?
gaining or losing supporters is not part of the job, I dont know the different btw Islamic banking in Pakistan, UK and Nigeria unfortunately i know it has been in the pipeline during the time of Soludo but now a northerner is there it seems there's an issue with it

kafanchan:

Your first paragraph is not true. Nobody was running out of the country. All the MDs were at that meeting when they were all fired. Fine, Sanusi might say he didnt want the so called guilty MDs to buy their way out and frustrate him from removing them that is why he acted hurriedly; but that is not tenable in a conventional court of law. It is only tenable in Sudan where he schooled. Nigeria is no Sudan.

you can wait for three months when all the other banks have funds in these banks, they will withdraw their money and the banks will collapse!
These banks have borrowed from each other, if one banks gets a whiff of the others insolvency it will pull its funds back pronto and they will be exposed!

Dis Guy:

you can wait for three months when all the other banks have funds in these banks, they will withdraw their money and the banks will collapse!
These banks have borrowed from each other, if one banks gets a whiff of the others insolvency it will pull its funds back pronto and they will be exposed!

The banks would not have collapse, u know why?
They had more deposit base then(in 2009) than they do now, they had more shareholders fund then than they do now. Since they have not collapsed now and they can still survive till september (according to sanusi), that means they would have survived then.
My friend, I am not trying to force my opinion on you because I know I can't, I am just persuading to you to try and see it from my angle. It might not be a Northern agenda anyway, but I am very sure Sanusi has an agenda that he dare not made public. He is acting on a script.

As regards the EDW, you know that the fact you borrow money from me doesnt mean that I am richer than you or that you are broke or poor, it might mean that you are sharper than me and you have seen more bussiness deals which I do not see and you dont have enough money to do it. EDW was cheap and it made sense for those banks to borrow from there and invest it in FOREX and co. So, using as yardstick for judging which bank is strong or weak can bring an incorrect conclusion.

Another thing is that as organisation, it is not every time that you will be financially sound, even as human beings, there are times that we will be looking for 1,000 naira and we will not have, that doesnt mean we dont have 1m naira somewhere that we will get in 2 or 3 days, u know what I mean. According to CBN source, Intercontinental had paid all the money he was owing CBN as at June/July 2009. Unfortunately for them, they were judged based on their "EDW unhealthy financial" state as at May 2009. They were sacked in August, why didnt sanusi reverse its decision when he knew that most have those banks had paid what they were owing at EDW.

As regards bad loans, all banks had bad loans, Sanusi himself gave Seaswolf, a three month old company 20m dollars loan{I dont know if I got the figure right, but I know then that the amont is more than 40% of the shareholders fund of FBN as at then) without collateral, the loan went bad and they did not classify it as bad. And people are still saying the man is a saint. He is not a saint joo, he is devil re-incanate.

In what ways have his reform profited Nigerians?

Dis Guy:

I'm not a judge or law expert hence just state my opinion
i just did a quick check on their website, are you saying any northerner director in a bank is part of the 'agenda' ? what about the CEOs?
The shareholders are broke! they cant pump any money when they don't have money, the money required the money they are owing cant be raised on the stock market with their current state, Habib bank is a major shareholder of phb isnt/wasnt it? part of the requirement for new investors was capacity and resources or is it because they are from Pakistan? what if a UK bank comes along would that be suitable?
gaining or losing supporters is not part of the job, I dont know the different btw Islamic banking in Pakistan, UK and Nigeria unfortunately i know it has been in the pipeline during the time of Soludo but now a northerner is there it seems there's an issue with it

The shareholders are not broke, if they are they will not be challenging the sales of their banks and clamouring for stock market recapitalisation. Let me tell you what I think, I think Sanusi knows that if he allows those banks to go to stock market like he allowed Unity bank to do, Ibru, Ebong , Akingbola and co will still be the ones to pump in money and have a controlling interest in those banks again. And you know that will spell doom for Sanusi because they will appoint the EDs of their choice who will in turn appoint the MD of their choice who will now expose all the alledged looting of Sanusi's MD's management of those banks. That is why Sanusi at all cost will want to merge or sell the banks to his prefferd bidders who will cover up their mismanagement.
In UK, Islamic/non interest bank is just a product in a bank. It is not that you will see a bank solely for Isalmic banking products.
Well I agree with you on the saying that part of the requirement for new investors was capacity and resources or is it because they are from Pakistan? what if a UK bank comes along would that be suitable?. I am just being sceptical owing to his background and the agreesion with which he is campaining for Islamic banking.
As regards the quote i[b] just did a quick check on their website, are you saying any northerner director in a bank is part of the 'agenda' ? what about the CEOs?[/b] A bank did not have a Northern ED, sudennly, they end up having 2 or three, haaaaaa, that will make me suspicious and that is why I am.
Although to be fair , I dont think he flooded the management of the banks with too much Northerners. After thinking about it just now, I discover there is no proof yet that he is carrying on Nothern Agenda, but there are proofs that he is bent on changing the ownership of those banks at all cost, even if it will cost us our economy.

i think sanusi got wrong.i am not against the reform but the manner is executing his plan is suspicious.i think the court has just justified that his action was wrong and i expected him to have carried along the public before taking that action.it is not a secret that there was rift between sanusi and akingbola when he was managing director of first bank so his action in the past and recently may have corroborated the judgement of the court.to be sincere , the reform of sanusi era has not yielded positively on the economy and this clearly shows the man is a failure.when soludo came in with recapitalization there was instant effect on the economy of the country and there was a lot of job opportunities and expansion of the banks.sanusi is a destroyer and his policy has evil motive.he should be removed as cbn governor and most of his action should be reserved.

The case has been adjourned to September 26.

enough time to remove govt money sustaining them

court case upon court case

Adjournment till Sept 26 when Liquidation date is Sept 30.

The deal will soon explode and the bubble will soon burst

And pls can someone help me here, how many more years or months does Sanusi has left?

Okukk:

And pls can someone help me here, how many more years or months does Sanusi has left?

I beg ask Jarus and other Sanusi praise singers of N/L

It might not be a Northern agenda anyway, but I am very sure Sanusi has an agenda that he dare not made public. He is acting on a script.

Northern/Islamic script?

As regards the EDW, you know that the fact you borrow money from me doesnt mean that I am richer than you or that you are broke or poor, it might mean that you are sharper than me and you have seen more bussiness deals which I do not see and you dont have enough money to do it. EDW was cheap and it made sense for those banks to borrow from there and invest it in FOREX and co. So, using as yardstick for judging which bank is strong or weak can bring an incorrect conclusion.

The edw was meant to be temporary, almost as the last resort for banks with liquidity issues and those that couldnt borrow from their peers but they parked the bus there not to invest in long term investment but for FOREX, oil and gas and land speculating- that is borrowing emergency money to gamble, goes a long way in showing careless they were. year after year they wrote off huge loans (probably deliberately) whilst the shareholders nod their head in agreement at the AGM. borrowing money from a loan shark because you have seen a juicy offer is not considered smart

Another thing is that as organisation, it is not every time that you will be financially sound, even as human beings, there are times that we will be looking for 1,000 naira and we will not have, that doesnt mean we dont have 1m naira somewhere that we will get in 2 or 3 days, u know what I mean. According to CBN source, Intercontinental had paid all the money he was owing CBN as at June/July 2009. Unfortunately for them, they were judged based on their "EDW unhealthy financial" state as at May 2009. They were sacked in August, why didnt sanusi reverse its decision when he knew that most have those banks had paid what they were owing at EDW.

You are right, and that is why the EDW was set up-for those times you are not financially sound, going frequetly to the EDW shows you are a long term sickler and considering you market share you are a risk to other banks and the economy, what's worse is knowing you have signed off billions of Naira on a regular basis for people rich enough to be featured in Forbes magazine, rich enough to donate N500millions to political parties, buy jets and Yachts competing with fellow defaulters.

The shareholders are not broke, if they are they will not be challenging the sales of their banks and clamouring for stock market recapitalisation. Let me tell you what I think, I think Sanusi knows that if he allows those banks to go to stock market like he allowed Unity bank to do, Ibru, Ebong , Akingbola and co will still be the ones to pump in money and have a controlling interest in those banks again. And you know that will spell doom for Sanusi because they will appoint the EDs of their choice who will in turn appoint the MD of their choice who will now expose all the alledged looting of Sanusi's MD's management of those banks. That is why Sanusi at all cost will want to merge or sell the banks to his prefferd bidders who will cover up their mismanagement.

Yes you dont return mismanaged banks to CEOs that have broken every rule in the book, the stock market was deflated, remaining investors that have not left to shore up operations in their own country wont sell good stock for badly run banks, they money these 5banks require is another ball game to that of unity and the rest, plus 5-8 banks going to the stock market at the same time- come on, even when the going was good bank spaced out their IPOs. Akingbola,Ibru will have to sell the Dubai shopping complex (bought with loans theyve no intention of paying back or insider trading)- ~Imagine Bankole buying his official accommodation

you have to pay people top money to restructure these banks so they get their monies back from acting big men and look pretty for investors- so alleged looting i dont know