IT is a season of lamentation for shareholders of the three banks acquired at the weekend by the Federal Government. While the final computation of loses incurred by the shareholders is being awaited, tentative figures show that the former owners of the nationalised banks may have been stripped of N32 billion worth of shares in the exercise.

The banks are former Afribank Plc, now Mainstreet Bank Limited; Bank PHB Plc, which has been branded Keystone Bank Limited and Spring Bank Plc, which the government transformed to Enterprise Bank Limited.

A breakdown of the shareholding structure of the banks made available to The Guardian shows that former Spring Bank had 11.3 billion ordinary shares valued at N9.6 billion, Afribank (N13.6 billion ordinary shares worth N9.49 billion), while Bank PHB had 20.2 billion ordinary shares put at N10.7 billion.

The Assets Management Corporation of Nigeria (AMCON), which took over the banks as their sole shareholder on Monday, said it had injected N679 billion into them to protect their depositors. AMCON has also hinted that the banks would be sold to new investors after three years of being managed by the current boards it appointed on Sunday to run them.

AMCON Managing Director and Chief Executive Officer (MD/CEO), Mustapha Chike-Obi, during an interview on CNBC Africa on Monday, said he would ensure that the banks are run professionally, adding that the desire informed the appointment of the seasoned bankers and other experts to run the outfits.

Before they were nationalised, the Deputy Governor of the Central Bank of Nigeria (CBN), Kingsley Moghalu, had told journalists in Lagos that in as much as the apex bank was not opposed to banks shareholders’ clamour to be allowed to recapitalise them, they (shareholders) should come up with the funds to bail out the ailing organisations.

He said the CBN could not wait endlessly to conclude the recapitalisation exercise as such an open-ended action was bound to affect the entire financial system.

In 2009, the CBN Governor, Sanusi Lamido Sanusi, declared that the shares in the ailing banks were worthless, adding that the problems in the banks had wiped out the shares’ values.

Already, the Securities and Exchange Commission (SEC) has suspended trading on the shares of the three banks.

The commission, in a statement on Sunday, said the decision was to maintain the capital market integrity. It commended the action of AMCON and the CBN, adding that it would help to resolve the banking crisis in the country.

According to SEC, the initiative of Nigeria Deposit Insurance Corporation (NDIC), CBN and AMCON are significant steps towards the resolution of the banking crisis. Indeed, the commission believes these actions will accelerate the recovery of the Nigerian capital market.

“Specifically, NDIC in the exercise of its powers under the NDIC Act on August 5, 2011, established Enterprise Bank Limited, Keystone Bank Limited, and Mainstreet Bank Limited, as bridge banks to take over the deposit liabilities and assets of Spring Bank Plc, Bank PHB Plc and Afribank Bank Plc, whose banking licences have been revoked by CBN.

“As a consequence of the above actions and to maintain market integrity, the SEC has approved the placement of the shares of Afribank Plc, Bank PHB Plc and Spring Bank Plc on full suspension. Full suspension means that there will be no trading in the shares of the said companies,” it said.

The SEC also said that the shares of three other banks that had entered into Transaction Implementation Agreements (TIAs) with investors would also be placed on technical suspension to protect investors as well as boost their activities.

It said: “The commission equally notes that in compliance with the CBN requirements for recapitalisation, Finbank Plc, Intercontinental Bank Plc, Oceanic Bank Plc and Union Bank Nigeria Plc have executed TIAs with core investors.

“To protect investors, the SEC has approved that the Nigerian Stock Exchange should place the shares of these banks on technical suspension. Technical suspension means that trading in the shares can continue without any change in price. The commission remains committed to its mandate of investor protection and market development.”

The banks along with Union Bank, Intercontinental Bank, Finbank and Oceanic International Bank were given up to September 30 to recapitalise or face liquidation.

Of these banks, four had signed agreements with other banks to pave the way for strategic investors to inject additional funds into them.

They are Intercontinental (with Access Bank Plc); Union Bank (with African Capital Alliance); Finbank (with FCMB) and Oceanic Bank (with Ecobank Transnational Incorporated).

But the Federal Government after reviewing the situation concluded that it would be risky to allow the nationalised banks to operate till September 30.

Besides, the Federal Government, through the CBN, had in August 2009 offered N620 billion lifeline to six of the distressed banks, including the three now taken over by the government.

Shortly after they were nationalised, AMCON injected N678.5 billion into the three banks, bringing the total amount provided to lift them to N1.29 trillion.



http://www.ngrguardiannews.com/index.php?option=com_content&view=article&id=57348:shareholders-lose-n32b-in-nationalised-banks-&catid=1:national&Itemid=559

Bad business for shareholder. This is the reason you need to put your money where you will have control.