₦airaland Forum

i love Ellen's show.
She is living her life and i am living mine.
no problems.
i hold my view about lesbianism but it is her life,so it does not matter.

By Idris Akinbajo
August 23, 2009 07:56AMT

Lurking behind the current troubles of Oceanic Bank and Intercontinental Bank is the shadowy figure of one man whom investigators from the Economic and Financial Crimes Commission believe is the business front forJames Onafeni Ibori, the politically powerful former governor of Delta State.

The man is Henry Imasekha, described by associates as a brilliant accountant who holds management degrees from Oxford and Harvard. In the long charge sheet indicting Mr. Ibori at the Federal High Court in Benin, the EFCC described Imasekha as the “character moving funds in Celtel, Oando and NOTORE Chemical Industries.”

Investigators from the EFCC were last weekend scratching their heads at the extent of role played by Mr. Imasekha and the businesses he controls in the debt crisis that has caused the two banks to nearly implode. The banking crisis caused the Central Bank to fire their top executives and shovel hundreds of billions in public funds into the teetering institutions, which were threatening to take down the whole economy with them.

Mr. Imasekha’s companies, widely believed to actually be controlled by Mr. Ibori, top the list of debtors at Oceanic and Intercontinental, according to a list of Nigeria’s largest debtors in the five banks whose chief executives and top management staff lost their jobs on Friday August 14, in a major shake up announced by the CBN governor, Sanusi Lamido Sanusi.

Just three of the companies owe the two banks a combined N81 billion, and have failed to pay, according to the Central Bank.

Ascot Offshore Nigeria Ltd, on whose parent board Mr. Imasekha seats as chairman, owes Intercontinental N44.6 billion; Notore Chemical Industries Ltd, owes Oceanic N32.3 billion. And Berkeley Group, another company controlled by Mr. Imasekha, owes Oceanic another N4.3 billion, the CBN says.

The CBN says these non-performing loans hastened the liquidity crisis of the banks, and places a severe burden on the Nigerian public.

Mr. Imasekha’s business is subsumed in the two companies which turn up in many investments in the oil and gas, telecommunications, and fertiliser sectors of the economy. The two companies are Bromley Investment Ltd, and the Brisbane Investment Ltd.

Back in July 2001, federal investigators said Bromley bought 10 percent of the mobile phone company ECONET [now Zain] for N2.2 billion, which it borrowed from the now defunct New Nigerian Bank [NNB] owned by Delta and Edo states. Mr. Ibori was governor in Delta; another close ally, Lucky Igbinedion, was governor in Edo and was subsequently found guilty of stealing state funds.

Investigators say the NNB credit was not based on any collateral, and Mr. Imasekha had no documented relationship with the bank prior to this period.

Investigators say just two days after his company bought the ECONET shares, it sold half of the same shares to the Delta State government with Mr. Ibori’s approval for N2.5 billion. In a mere 48 hours, Mr. Imasekha, believed to be fronting for Mr. Ibori, had turned a profit of more than 100 percent.

In an interview with NEXT, Mr. Imasekha dismissed the EFCC version of events, saying: “At that time, I spent 20 years in banking. I retired as executive director in UBA. Are you telling me that if Jim Ovia, or Fola Adeola or anybody walks into a bank in Nigeria, he won’t be recognised? They won’t know him?

"As an executive director in UBA and before then I had done 20 years in banking in Nigeria, are you telling me that if I walk into a bank, they will tell me that they don’t know me?”

In essence, Mr. Imasekha meant that he bought the shares in his personal recognition, and then secured the loan to pay for it after the fact.

Still with five percent stakes in the troubled but still immensely profitable telecom company, Mr. Imasekha retained his seat on the board which by then had changed ownership and name to become V-Mobile. Five years on, in 2006, the company was again bought by CELTEL, and Bromley sold off its remaining shares for N4.4 Billion.

This same amount was pumped into NAFCON, the National Fertiliser Company of Nigeria located in Onne. The buyer was Mr. Imasekha’s twin company, Brisbane Investment Ltd, which acquired 13% of NAFCON.

The Notore deal

The 2006 Nafcon move brought Mr Imasekha on board as a director of Notore Chemical Industries Limited, which had purchased 39% of NAFCON a year before, in 2005. Notore bought its stakes for $46 Million paid by unguaranteed loan from Oceanic Bank. Confidential EFCC sources told NEXT at the weekend that “these puzzles will be put together in the coming days and weeks.”

Oceanic’s journey to the NAFCON investment began in 2005 when Mike Orugbo, a former senior engineer at the NNPC and CEO of O-Secul Nigeria Ltd, paid $152 Million to buy out 100% of NAFCON assets as part of the privatisation program of the federal government.

Mr. Orugbo who currently sits as a director on Notore’s board, paid an initial $2Million using New Nigerian Bank draft, and borrowed additional $150 million from Oceanic to seal the $152 Million deal.

Investigators say the Oceanic loans were not based on any collateral, describing it as “reckless and even criminal in intent.”

“That investigation showed that Oceanic Bank raised the remaining money on behalf of O-secul for the acquisition of the fertilizer company while there exists no evidence of previous banking relationship between O-Secul and Oceanic Bank, but the Bank felt comfortable in granting the large facility to the company,” stated an EFCC report on the deal.

A royal flush

Mr. Imasekha’s foray into the oil and gas sector bloomed in 2007 when Ascot purchased the Nigerian operations of Wilbros, the oil services company, for $155.25million.

Wilbros Group, a US construction and engineering company, commenced its Nigerian operations in 1962 with the construction of the TransNiger Pipeline, a 170-mile (275-kilometer) crude oil pipeline.

The Houston-based company was was indicted in the US for bribing top Nigerian Government officials between 2003 and 2005 with over $6million. The company in May, 2008 agreed to pay $10.3million in fines.

Following the bribery allegations, the company decided to dispose off of its Nigerian subsidiary.

Ascot then approached Intercontinental for a $200 million loan, from which it paid for the Nigerian subsidiary in 2007.

The 2007 Ascot purchase put Intercontinental in an awkward position with the EFCC, which asked why the loan was secured with 16 million shares in Celtel owned by Delta State and 54 Million shares of Hernderson African Investment Ltd in Union Bank.

Joey Obue, an executive director of Ascot denied the use of Delta State shares. “Your information about Delta shares in Celtel being used as security is not correct. Delta is not a shareholder of Ascot,” Mr Ebue said in response to our enquiry.

The EFCC challenge

It is unclear what direction law enforcement officials want to go with this and other bad loan cases. The EFCC boss, Farida Waziri, said in Lagos Wednesday that the agency will give a week of grace to all the loan defaulters before pursuing them. “We will arrest, prosecute and seize their assets,” Mrs. Waziri said, riding the wave of public disgust at the poor risk management profile of the banks.

The political unrest in the Niger Delta is the challenge Mr. Imasekha faces and he is apparently not alone. “If they don’t allow me to work because there is crisis in the Niger-Delta, where else can I work. All the work we are doing is inside the Niger Delta,” he complained, saying in response to Mrs. Waziri’s threat that, “I read it in the papers, they didn’t write to me. Of course we don’t work on the pages of newspaper, they haven’t written to us.”

Elor Nkereuwem contributed reports to this story.

Jarus,
I am still waiting for your response to my earlier questions.
thanks.

i always take those words with a pinch of salt.
especially in Nigeria.

Jarus, since you know a lot about the story, could you throw more light on the moves of Gamaliel Onosode and Wakilin Adamawa?
i know both were directors of the bank and Gamaliel resigned from the board just before the collapse.
i will appreciate your insight.

maedan:
The vid is OK. But please can someone tell Faze to change his rugged look. It's hard to take him seriously when he sings sweet ballads with that head of dreads. I wish he would cut them off, his new style will do wonders over all for him, trust me.

gbam!!

brein:
Interesting Movie and Nice Characters too.

The point is, all of my life i have TRUSTED Cecelia Ibru (The Oceanic Bank Thief).

i posted an apt response to this comment on another thread without seeing this.
anybody that trusts or believes in any Nigerian elite is to be most pitied of all men.
always take with a grain of salt anything you read about them.
they are mostly hypocrites.
i read an interview and article on the Oceanic CEO on Mckinsey website on Thursday.
if you know about he world of corporate consulting, you will know that McKinsey and BCG are the biggest and most respected in the world.
seeing her being painted in such glowing terms and talking big in the interview, i was just telling myself that i hope this is the entire story.
2 days later, the bubble burst.
i don't trust any of these people, not even Sanusi

there is something i don't get.
if Ibori stole as much as is claimed, from Delta State coffers, why take such huge loans from the bank?
His alleged loot was not worked for, so why take a loan that you will have to pay back some how?

there might have been a case of tribalism and victimisation but the truth of the matter was that recklessness was the bedrock of the failure of commerce bank.
they must have only armed their enemies to harm them.

i do not trust anyone in the limelight in the Nigerian space (because in the past they have repeatedly disappointed and proven themselves to be hypocrites) but the only Nigerian bank i respected and still do respect is Mr. Atedo Peterside.
A man that was constrained by his vision, strategy and a willingness to b different.
I will like to hear his constructive criticism of the present debacle.

Jarus, thank you for this thread.
I personally find your posts refreshing and insightful.
i remember the two men very well and remember Commerce bank too well.
they were the super bank and super bankers of those days.
i remember that Gamaliel Onosode was the bank chairman at a time and left shortly before the collapse.
foe that he earned my respect (considering that i am very cynical about the Nigerian elite).
i also remember that Wakilin Adamawa was a major shareholder of that bank.

the problem i have is why present day super bankers refused to learn anything from the debacle of the likes of Crystal bank and Commerce bank of the past?
their is an inherent greed in capitalism that cuases innovation and progress to thrive but their must be a fine line where the majority must refuse to cross.today banks have blurred the line and infact made it non existent.everything seems to go.
regulation is the moral compass of capitalism.in this regard, the CBN has failed the country.

At Last, Otedola, Dangote Settle Differences
By Francis Ugwoke, 08.18.2009

Nigeria has joined the race for a non-permanent seat at the United Nations Security Council, THISDAY has learnt. TThe swords have been sheathed in the long-drawn battle between two friends and business giants, Alhaji Aliko Dangote and Mr. Femi Otedola, who had been at each other’s neck for nearly a year.
In a truce brokered by the Editor-in-Chief and Chairman of THISDAY, Mr. Nduka Obaigbena, and other friends of the business moguls last Sunday, the two men decided to bury the hatchet and forge a new bond.
They had been invited separately for breakfast at Roberts Café, Victoria Island, Lagos , completely unaware of what was in the offing until they “bumped” into each other at the café.
Obaigbena had been speaking to the two men individually before their misunderstanding over the purchase of Texaco became a media war, but the mediation had only succeeded in curtailing the public nature of the fight.
At the reconciliation meeting on Sunday, they finally saw eye-to-eye for the first time in months as they spoke to each other at length, shook hands, asked frank questions and gave what were considered to be honest answers as to the source of their differences.
To the delight of their friends, they made a solemn pledge to let “bygone be bygone”.
They vowed to restore their confidence as friends, as Otedola acknowledged Dangote as his “elder brother” and “mentor”, promising to give Dangote his “due respect”.
Dangote, on his part, pledged to look after his “younger brother” and “protégé”.
When Obaigbena asked the two billionaires to apologise to each other, Otedola seized the initiative. He cut in and said that in Yoruba tradition, Dangote was his senior and it was therefore unnecessary for the Kano-born sugar and cement giant to apologise, as only the junior apologises to the senior.
They both agreed to end the long-running media war and withdraw all court cases related to the disagreement.
The meeting ended with the declaration of “no victor, no vanquished” by the two parties.
After the meeting, which was witnessed by Mr. Nduka Irabor, for chairman of House of Representatives Committee on Communications, and Mr. Albert Okumagba, the CEO of BGL Ltd, among others, the two billionaires drove together to Dangote’s house. Otedola also invited Dangote over to his office this Friday.
The origin of the quarrel is traced to the decision of ChevronTexaco to sell off its downstream interest in West Africa, including Nigeria , last year.
Otedola, who is the chairman of African Petroleum Plc and Zenon Oil, had put in a bid but MRS Holdings, owned by Dangote’s cousin, Sayyu Dantata, outbid Otedola to the coveted company.
It is believed that Otedola saw this as a betrayal on the part of Dangote because of an unwritten law that the two men would not encroach into each other’s territory in business. While Otedola was said to have accused Dangote of using his cousin as front for the Texaco transaction, Dangote reportedly said he was not a party to the deal.
MRS paid $1 billion for a 60 per cent stake in Texaco, while Otedola's bid of $200 million was considered insufficient.
Otedola decided to also go into Dangote’s territory, securing licence to bring in bagged cement, which he names “Otedola Portland Cement” and had already advertised it in the newspapers.
The major grouse of Otedola, it was reported, was that he had been confiding in Dangote over the deal all along, and was bitter that MRS, in which Dangote reportedly has 80 per cent stake, went ahead and made a bid.
As the misunderstanding worsened, AP accused Dangote of manipulating its share prices to the extent that they started falling on the floor of the Nigeria Stock Exchange (NSE), losing over 80 per cent value in eight weeks.

I have said it before, the Nigerian elite is motivated by only one factor:greed
everything else is secondary.they are blind to every other reality in their quest to rape this nation and its resources blind.
only a fool will fight on their behalf.

after causing Otedola severally and forming a Dangote fan club, Dayo Coker needs to urgently reply to the article above.
go over to his blog and see his posts about Otedola, now both men have made peace in order to continue their looting.
Where is Dayo Coker?

At Last, Otedola, Dangote Settle Differences
•For both me, it’s ‘no victor, no vanquished’
By Francis Ugwoke, 08.18.2009
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Nigeria has joined the race for a non-permanent seat at the United Nations Security Council, THISDAY has learnt. TThe swords have been sheathed in the long-drawn battle between two friends and business giants, Alhaji Aliko Dangote and Mr. Femi Otedola, who had been at each other’s neck for nearly a year.
In a truce brokered by the Editor-in-Chief and Chairman of THISDAY, Mr. Nduka Obaigbena, and other friends of the business moguls last Sunday, the two men decided to bury the hatchet and forge a new bond.
They had been invited separately for breakfast at Roberts Café, Victoria Island, Lagos , completely unaware of what was in the offing until they “bumped” into each other at the café.
Obaigbena had been speaking to the two men individually before their misunderstanding over the purchase of Texaco became a media war, but the mediation had only succeeded in curtailing the public nature of the fight.
At the reconciliation meeting on Sunday, they finally saw eye-to-eye for the first time in months as they spoke to each other at length, shook hands, asked frank questions and gave what were considered to be honest answers as to the source of their differences.
To the delight of their friends, they made a solemn pledge to let “bygone be bygone”.
They vowed to restore their confidence as friends, as Otedola acknowledged Dangote as his “elder brother” and “mentor”, promising to give Dangote his “due respect”.
Dangote, on his part, pledged to look after his “younger brother” and “protégé”.
When Obaigbena asked the two billionaires to apologise to each other, Otedola seized the initiative. He cut in and said that in Yoruba tradition, Dangote was his senior and it was therefore unnecessary for the Kano-born sugar and cement giant to apologise, as only the junior apologises to the senior.
They both agreed to end the long-running media war and withdraw all court cases related to the disagreement.
The meeting ended with the declaration of “no victor, no vanquished” by the two parties.
After the meeting, which was witnessed by Mr. Nduka Irabor, for chairman of House of Representatives Committee on Communications, and Mr. Albert Okumagba, the CEO of BGL Ltd, among others, the two billionaires drove together to Dangote’s house. Otedola also invited Dangote over to his office this Friday.
The origin of the quarrel is traced to the decision of ChevronTexaco to sell off its downstream interest in West Africa, including Nigeria , last year.
Otedola, who is the chairman of African Petroleum Plc and Zenon Oil, had put in a bid but MRS Holdings, owned by Dangote’s cousin, Sayyu Dantata, outbid Otedola to the coveted company.
It is believed that Otedola saw this as a betrayal on the part of Dangote because of an unwritten law that the two men would not encroach into each other’s territory in business. While Otedola was said to have accused Dangote of using his cousin as front for the Texaco transaction, Dangote reportedly said he was not a party to the deal.
MRS paid $1 billion for a 60 per cent stake in Texaco, while Otedola's bid of $200 million was considered insufficient.
Otedola decided to also go into Dangote’s territory, securing licence to bring in bagged cement, which he names “Otedola Portland Cement” and had already advertised it in the newspapers.
The major grouse of Otedola, it was reported, was that he had been confiding in Dangote over the deal all along, and was bitter that MRS, in which Dangote reportedly has 80 per cent stake, went ahead and made a bid.
As the misunderstanding worsened, AP accused Dangote of manipulating its share prices to the extent that they started falling on the floor of the Nigeria Stock Exchange (NSE), losing over 80 per cent value in eight weeks.

dayocoker, pls your attention is needed here.

•For both me, it’s ‘no victor, no vanquished’

Nigeria has joined the race for a non-permanent seat at the United Nations Security Council, THISDAY has learnt. TThe swords have been sheathed in the long-drawn battle between two friends and business giants, Alhaji Aliko Dangote and Mr. Femi Otedola, who had been at each other’s neck for nearly a year.
In a truce brokered by the Editor-in-Chief and Chairman of THISDAY, Mr. Nduka Obaigbena, and other friends of the business moguls last Sunday, the two men decided to bury the hatchet and forge a new bond.
They had been invited separately for breakfast at Roberts Café, Victoria Island, Lagos , completely unaware of what was in the offing until they “bumped” into each other at the café.
Obaigbena had been speaking to the two men individually before their misunderstanding over the purchase of Texaco became a media war, but the mediation had only succeeded in curtailing the public nature of the fight.
At the reconciliation meeting on Sunday, they finally saw eye-to-eye for the first time in months as they spoke to each other at length, shook hands, asked frank questions and gave what were considered to be honest answers as to the source of their differences.
To the delight of their friends, they made a solemn pledge to let “bygone be bygone”.
They vowed to restore their confidence as friends, as Otedola acknowledged Dangote as his “elder brother” and “mentor”, promising to give Dangote his “due respect”.
Dangote, on his part, pledged to look after his “younger brother” and “protégé”.
When Obaigbena asked the two billionaires to apologise to each other, Otedola seized the initiative. He cut in and said that in Yoruba tradition, Dangote was his senior and it was therefore unnecessary for the Kano-born sugar and cement giant to apologise, as only the junior apologises to the senior.
They both agreed to end the long-running media war and withdraw all court cases related to the disagreement.
The meeting ended with the declaration of “no victor, no vanquished” by the two parties.
After the meeting, which was witnessed by Mr. Nduka Irabor, for chairman of House of Representatives Committee on Communications, and Mr. Albert Okumagba, the CEO of BGL Ltd, among others, the two billionaires drove together to Dangote’s house. Otedola also invited Dangote over to his office this Friday.
The origin of the quarrel is traced to the decision of ChevronTexaco to sell off its downstream interest in West Africa, including Nigeria , last year.
Otedola, who is the chairman of African Petroleum Plc and Zenon Oil, had put in a bid but MRS Holdings, owned by Dangote’s cousin, Sayyu Dantata, outbid Otedola to the coveted company.
It is believed that Otedola saw this as a betrayal on the part of Dangote because of an unwritten law that the two men would not encroach into each other’s territory in business. While Otedola was said to have accused Dangote of using his cousin as front for the Texaco transaction, Dangote reportedly said he was not a party to the deal.
MRS paid $1 billion for a 60 per cent stake in Texaco, while Otedola's bid of $200 million was considered insufficient.
Otedola decided to also go into Dangote’s territory, securing licence to bring in bagged cement, which he names “Otedola Portland Cement” and had already advertised it in the newspapers.
The major grouse of Otedola, it was reported, was that he had been confiding in Dangote over the deal all along, and was bitter that MRS, in which Dangote reportedly has 80 per cent stake, went ahead and made a bid.
As the misunderstanding worsened, AP accused Dangote of manipulating its share prices to the extent that they started falling on the floor of the Nigeria Stock Exchange (NSE), losing over 80 per cent value in eight weeks.

just remembered Manchester.
very good but you will need to go to Manchester like twice or even thrice a year.
it is far more expensive than Leicester.

i have a few friends who have completed the MBA via distance learning.
Leicester is good. they have a local resource support affiliate called RDI off Keffi St in Ikoyi. contact them for details.
the academic service is as good as it gets for a distance learning program.not good enough in my view but manageable.
the exams are done at British council and things are pretty well organised.

rapjunkie:
I don't know much about diva's BUT

We are yet to produce a decent female rapper because all of them at the moment rap with a fake annoying deep american accent . . . . . . . .  . . . . .and thats sasha and da trybes fault.

The game is crying out for an original naija female MC

you forgot to add fake.
very nauseating. in my opinion, Kel is the worst.

@poster, from the present scene, the only viable hope is Omawumi.
she is good, has a good voice and the boldness and courage to take risks and be different.
the only thing is i hope she finds good and outstanding songs to sing.

story story!!!
tales by moonlight.

08.17.2009

Contrary to the impression that Bank PHB Plc is enmeshed in margin and down stream oil sector loans that are not performing, it emerged last night that the institution is even a net placer of funds at the inter-bank market.
There had been insinuations that the quality of the bank’s loans were suspect given the fact that some of its peers whose management were removed by the Central Bank of Nigeria (CBN) last Friday got their hands burnt as a result of investment in the stock market and exposure to the downstream oil sector.But according to information, Bank PHB, which has since become a fringe player in the oil sector – having learnt its lessons in 2001, had already provided for its margin loans in its recently published reports. “With a shareholders’ fund of over N254 billion, Bank PHB ranks among the most capitalised banks in the country,” industry sources said last night.
On the issue of Spring Bank, the source explained that the current loan portfolio of the former is about N136 billion of which N96 billion had already been provided for before the latter acquired it.The source said since Bank PHB took over, Spring Bank has posted over 181 per cent increase in its profit, stressing that there was “nothing toxic in Spring Bank.”

ikennahill:
TO GOD BE THE GLORY
ENUGU IS WORKING!


any governor wey dey advertise his work for paper no dey do any work at all,this is the first theory of naija poli-trick

gbam

@ DayoCoker,
kindly explain your relationship with Aliko Dangote.
i find your adulation of the guy a bit excessive and exaggerative.
the man is part of the problem.
please try and stick to facts and less on the praise singing.

on the Erastus Akingbola issue, you points are right. the onus is on the other party to disprove you, not just telling us that 'this bank is built on the rock of Jesus'. that is simplistic and populist and does not address the severity of the issues.

informat09:
im still waiting for his next moves, time will tell, time will tell.

the sacking of these sit tight bank ceo's is not a bad idea after all,some of these people have perpetuated fraud in the banking sector, i wonder why he didn't sack tony elumelu, tony demoted him while he was working in UBA bank.

you have answered your own question.he has reasons to be vindictive but he did not, maybe Tony covered his tracks well enough.
who knows??

SEFAGO:
"Intelligence is far more important that academic qualifications."

I hear this argument a lot and its very confusing though. Let me restructure what you said "Academic qualifications usually correlates to intelligence, and sometimes surpasses experience when that experience is not outstanding'

Lamido's experience is limited. They call him a risk manager (naija ppl like name sha) but what risk firms has he worked for, do these risk firms have a global presence, what was his performance there. Man if your experience is limited to nigerians banks, in this age, then your view would be very limited. If sanusi spent all his time in naija banks then it is likely that he is susceptible to all the problems of the nigerian banking industry itself.

So he wants to create a banking hegemony consisting of 3-4 banks. But thats not what we need 3-4 semi strong banks. We need a lot of strong banks. What he should start doing is reforming financial laws, trying to help drive the nigerian economy using a socialist based system of providing credit for strong banks to encourage entrepreneurship- basically what we need are two things production and consumerism to push our economy. One side cannot exist without the other.

If we can begin to increase production of goods by providing credit to small and big businesses (well researched business plans not just high worth individuals with inflated incomes), it would really help reduce unemployment and drive growth. A reduction in unemployment would give people the spending cash to bolster the consumer side. The nigerian consumer taste is very similar to that o America and is not as conservative as Asians. We like to buy, buy, buy. Th problem is that we dont have money. If a stimulus provides this money in a way that does not increase inflation then we can improve our economy.

Anyways not to go into any details, but what i am trying to say is that a PhD is important, how will lamido be able to understand what he is implementing and the long term effects. I also have a good feeling that very few of the economist at the CBN are PHD holder. Your point is strong though and i would say it would be better if we employed more Phd holders.

You list the heads of the Federal reserve with the assumption that:
1) The nigerian educational system has schools even slightly equal to skuls like harvard, princeton, college of holy cross were you are taught how to think and not how to ingest materials. I dont study economics, but i can understand economics and policy paper at one reading because i am taught hw to read critically. Very few nigerians know that skill.

2) Check out their experience and Lamido sanusi. Someone with such poor qualifications as Lamido sanusi would require somethin additional like a PhD to bring to the table.

3) The people who advise the Fed chairrman vs. People who advise the CBN governor.

Group 1, would have average IQs close to top 1%. While group 2, would consist of half-baked nigerian graduates from Unilag and UI with IQs maybe in top 10% (feeling generous today). Hence a very different economy.

No matter how corrupt an economy, it can still grow, hence why china is still growing despite being very corrupt. It just depends on if the government is interested in growth.

you are making a very false assumption.
the problem with Nigeria is not a lack of expertise. it is corruption, both of the mind and body.
we have seen those who went to the most elitist schools come back home and steal with reckless abandon.
i do not want to go into whether Sanusi needs a PHD or not (personally i do not think it is cos his arguments come across as sound, indepth and holistic, even when i am not an expert in that field). No need calling names here but those who have come back from the diaspora have done even worse in some instances.
Nigerians are a very intelligent and sound set of people.let no one convince you otherwise.
the present educational system is non existent but anyone who had tertiary education up to postgraduate level at least 25 years ago in Nigeria, can hold his own anywhere, if he has been updating himself professionally. in order words, he has the sound background to be at the top.
all those high fallopian sounding school names you are reeling out, i have mixed with some of their products and while some are exceptional, most are not anything extraordianry.

If a Bank is Sick, the Signs are Self-Evident, Says Sanusi

Few hours after the CBN governor, Sanusi Lamido Sanusi announced the sack of the managing directors/chief executives as well as the executive directors of five banks; he exclusively spoke to the board of editors at the Ikoyi residence of THISDAY chairman on why the apex bank took the action. According to the CBN governor, the step was aimed at saving the banks from collapse, because their balance sheets had shrunk with subsequent cash flow problems. He said the banks needed fresh funds because of their huge exposure to the capital market and huge non-performing loans that contributed to the liquidity problems in the affected banks. Excerpts:

Why did you sack these bank executives? Long before I became CBN governor, I had expressed reservations about the pace at which regulators were moving in terms of regulations for addressing this issue. My belief was that there are a number of banks that have huge exposure to the capital market and have therefore exposed themselves to serious risk, and until they come out and provide for these losses, we would not know the real state of health of their balance sheets. My view at that time was that when the rest of the world was recognising their losses from mortgages and other products, Nigerian banks should have taken advantage of that time and done the same and it would never have been an issue. I have always said that by not doing this, when the rest of the world is recovering, we will be having our own problem.
When I became the governor of the CBN, I was alarmed at the quantum of exposure which some of the banks had and that one of my challenges was to understand that it was not a short term problem. An exposure to a capital market that has lost over 70 percent of its value was a long term problem unless people believe that the capital market will pick up in the next few months and I do not think that stocks are going to go back to that very high level within a short time. As a result, the CBN asked for a special examination of these five banks.
Just to put this into context. If we take the average exposure at the discount window every month, between October last year and July this year, these five banks accounted for 90 percent. The remaining banks accounted for 10 percent. This for me is an immediate sign of distress. We tested it further and closed the window and said no more money. And we guaranteed the inter-bank market. If we don’t guarantee the inter-bank market, banks will not lend to them.
We immediately saw the affected banks taking money from the inter-bank market to recoup exposure to the discount market. This was clear evidence that they do not have cash at all. Their balance sheet had shrunk. The cash had gone. There were clear signs of the banks going under. So, we sent in special examiners. The idea was to go and find out the true facts about the problem.
What we found was not so much of a surprise, but I think the extent was alarming because I did not believe that there were banks that have up to 48 percent of non-performing loans or 50 percent non-performing loans. What the banks needed to do was to provide for these loans and to raise capital. The solution was not to borrow money. The solution was not to give them inter-bank funds. In every capitalist environment, if management loses a lot of money, it will go. It is not a crime. The MDs of all the banks behind the mortgage crisis in other parts of the world took the right action and resigned. They did not steal money. They did not commit a crime. But they ran an institution in a manner that cost it its franchise, or cost its shareholders money or placed their depositors at risk. They put their firms at risk and they took responsibility for it. So, it is in this light that the action that we have taken should be seen.
This was the basis for the decision to sack them. There is no way the CBN will inject money and allow these same teams to manage the funds. We had to provide the funds. It will be difficult to get such funds from the capital market today. Even if it is possible, it will take months. We don’t have that kind of time. Everyday, we are seeing signs that these banks are in trouble with liquidity problems. The experience this country has had is that we have never been able to deal with failed banks. Banks have filed, depositors lose money and the people who own the banks walk away rich.
The truth is that the owners of the banks don’t own the banks. They own it legally, but for every N1 they have in the banks, the depositors have N8 to N10. In other countries, N30 to N35. If a bank collapses, the owners actually own about 10 percent or less of the assets of that institution. It is you and I and the poor man that go and put money in that bank that will lose. People put money there not because they know anything about the balance sheet or liquidity ratio. It is because they have an understanding that if a Nigerian government has allowed the bank, they must have done everything they need to do to make sure that the system works so that a man can carry his life savings and put in this institution and go to sleep. When we say that we do not want a bank to fail, it is not because we want to protect the shareholders or managements. It is because we want to protect the depositors. So, the steps we have taken are aimed at protecting depositors. The banks could fail if money does not go into them. I have no doubt about this. It is in the national interest to inject money into them and this is what I have done. I had to ask the management to leave so that a new management can come and restore the banks into good health. And because we do not intend to own the banks, I see this as a temporary capital until they can raise new funds or find a merger partner and work with advisers to advise them and give them options.
They needed new funds and you don’t have the time to allow them go to the capital market. Why the rush? Why don’t you allow them to go to the capital market and shore up their capital?
The issue is not about going to the capital market. If today, the owners of the banks come up with the capital and bring it in and say to us, look we can bring in the N100 billion or N120 billion that you want, we will take it and give them back the bank.  All we want is to save the institutions. It is a simple technical matter of bringing in money.
You are shoring up the banks with N400 billion. Are you issuing a bond?
No, we are not issuing a bond. The CBN has a lot of money. We have the power under our Act to do this. What we will put there is a convertible loan. We want to make sure that whatever we provide is not a loan that will be taken back immediately. We want the management to know that they have this money until they get fresh capital. We also want to make sure that we don’t lock ourselves permanently because the last thing we would want is to get Nigeria back to the era of nationalising banks. There have been a number of hybrid options used in different parts of the world and within the next couple of days, all the legal arrangement of the option to be adopted will be worked out. At the moment, we have given them this money at a convertible Tier 2 loan, but that is not necessarily the final form it would be.
Are you sure what you have given them will be enough to meet their liquidity problem?
It will be enough. We arrived at this figure by making sure that we arrive at the minimum regulatory capital. Second, we looked at their exposure at the discount window and inter-bank market to get an idea of what they need. But having said that, remember they we have put in a new management and by the time the analysis is done and the new management says ‘listen, we need so much capital’ we shall provide it.
Is this money you are providing different from what you are providing in your secure inter-bank market?
In a sense, it will be replacing that or it will be funding that.   
Add all together – the exposure in the discount window and the inter-bank exposure – is it new money or different?
There is some new money, but you must remember that exposure to the discount market and the inter-bank markets vary from banks to banks. Today for example, at the discount window, I think we have about N157 billion. I don’t know exactly what the discount bill is right now. I know that when I looked at it last week, one of the banks had N38 billion left. Another bank had N40 billion at the inter-bank and N40 billion at the discount window. Another bank had N44 billion at the discount window and nothing at the inter-bank. One of the banks had over N100 billion at the inter-bank market.
Mr. Governor, I think it is in the national interest to look at each bank one by one. Let us start with Union Bank which is a first generation bank.
I will not discuss the details of respective banks. The reasons are many. First of all, as a regulator, I have certain information like a doctor and a patient. I can’t be discussing about them on the pages of newspapers. The boards of directors of the banks will be getting our report. The management of the banks had an exit discussion in which they were shown what went wrong. Now, if they want to go and disclose it, it is their right. In a court of law, if it is required, we will present it. You don’t go and disclose it in a newspaper interview. I have made general references to the conditions of the banks. But I will not go beyond this.
But in the US experience, when they had a stress test of the banks, the stress test of each bank was disclosed
Yes, they disclosed the stress test result, but there are people who will tell you that you should not disclose their stress
But they disclosed sufficiently for the public
I have disclosed enough, because I have said publicly that these five banks accounted for 90 percent of the discount window. I have said that these five banks have under-provision of more than N540 billion. I have said these five banks have an average of non-performing loan of over 40 percent. I have disclosed enough.
Your investigation was done on ten banks in the first instance. So, are we expecting more? When will the remaining banks face the audit?
The examiner can do a routine examination or a special examination. We ordered a special investigation of these banks because of what we saw and then because of a general perception in the market. The results are coming out and the banks are taking actions. I can tell you that in the next couple of weeks, we would have done 24 banks.
So, you have a fair view of what the remaining banks look like?
I have a fair view. I have always had a fair view of what all the 24 banks look like.
What will happen if you go in there and you find out that the other banks unaffected now show worse signs than the ones you have done?
If I find that and I don’t think so. You see, in this business, I’m a professional. If a bank is sick, there are signs. If a bank is sick, the signs are self-evident. You will see high interest rates. You will know it from their cash flow. You will know it from movement in balance sheet action. You will know it from the kind of customers from their customer profile. It is on that basis that I can say that the banks we have taken out address substantially the problems in the Nigerian banking industry.
Are you saying that if the CBN had acted sooner, we would have avoided this?
I think if we had acted sooner, the volume would not have been like this. I believe we may not have had five banks. We initially had two, because we all know we started with two. Then, it became four. We are all in this country. If we had acted sooner, we would not have had five banks. If we don’t act now, it will get worse. Let me tell you this, every bank needs to survive and banks struggle for market share. If a bank’s deposit base is eroded, it could introduce a high rate of interest. The bank will win market share from smaller banks. Some of the small banks that are fine. They are not top banks, but they are fine and they will simply find out that their deposit base is being eroded because the distressed bank is able to offer a high rate of interest. So what will happen is that a number of small banks without problems will start having problems. You will end up with three or four banks that will remain solid. More and more of the smaller banks will have problems. Do you know that as I speak to you today, as at the last count in the US, 70 banks have collapsed. Most of them small banks. Now that there is an aggressive fight for share of the market in a time of uncertainty, small banks, no matter how well they are managed may go down.
With the meltdown, US tax payers money were given to shore-up banks. Not all bank CEOs had to resign.
Well, I have not asked all bank CEOs to resign as well. But you will also remember, if you start counting the numbers of CEOs that resigned when they gave the stimulus, you will run out of count.
How will the CBN manage the public perception of this action? People are afraid that banks are failing.
Part of why I’m having this meeting is to get that opportunity to lay to rest peoples’ fear. A banking system can collapse if we do not swiftly address problems. When an institution has the kind of exposure that we have seen, it is very important that you act to save that institution. For us at the CBN, what we have done is to strengthen the system. By the time we provide the capital and provide new management, we have strengthened it. It is about what kind of message we send out. In any event, we are going to ensure that the banks are well funded. We will ensure that nobody will keep money and cannot take out his money. We believe that there will be no problem. The final thing that I will say is that very often the fear of unintended consequences had stopped people from taking action. The question is if we did not take action, what is going to happen? For me, that was the question I had to agonise over. From October to May, this is nine months, I have not acted. How long are we going to wait? You saw an advert in the dailies yesterday by a bank asking the federal government to come and help it recover debt. It will be highly irresponsible for a regulator to sit down and allow an institution get to that level.
In fact, we heard that even if you were contemplating taking action that was one event that tilted your balance.
I’m not going to talk about what made me move or what did not make me move. I can only say that I have a responsibility and it was a really difficult responsibility. What the law says is that it is about me making a judgement and once I make that judgement, I have to take every step necessary to deal with it.
Before now, there was a general impression that the banking system was OK. Then, suddenly, this happened?
To be honest, I don’t think there was a general impression that the banking industry was OK. There has been liquidity problem which I have always said. Before I became governor and after, I have always said that there are pockets of problems. I have always known that.
The fear is that the President can reverse this action and there are already rumours that this action is aimed at implementing a northern agenda?
I was appointed by the President and the President has never interfered in my work. I’m the governor of the CBN. I’m acting under power given to me by the CBN Act. In exercising this power and in doing what I have done, I have briefed the President. Of course, I was appointed by the President. He knows exactly what I saw. He knows exactly why I took the action. He has told me that he has every confidence in me. I have no reason to believe that he would reverse it. I have also told the affected banks that if I have acted outside CBN Act, the best place to report to is the court of law and not the President. I want to assure you that the President is behind me in this.
On the northern agenda, on a matter of policy, I never allow other people to defend me when an allegation is made against me. Everybody who knows me knows that I’m not a detribalised but an untribalised Nigerian. At the age of 8, I went to a Catholic boarding school. At the age of 10, I went to Kings College, Lagos. I have spent all my life in Lagos. I have never been associated with any regional agenda.

oyb:
its hard to reconcile being religious with the shady and underhand deals insiders in the industry know these people for. i remeber a freind that used to be with oceanic (a few years back) who more or less called cecilia a hypocrite who would hold fellowship every morning before getting down to money laundering

such a shame.
i am a Christian but i am always weary of people who over emphasis their faith in business.
i rather you let it shine through and speak for itself.
you can not hide it, no need forcing it.it will speak and shine through.a Christlike spirit is a lifestyle, no be show or by excessive gra gra.
all these fellowships and mid year thanksgiving in the office before and after extorting money in the name of hidden charges, giving loans to fraudsters and for the execution of non existent contracts and even laundering money for powers that be are hypocritical and satanic.
i don't want to derail this thread but the truth is that God cannot be mocked.

Mr Coker, i find you defense of Aliko Dangote a bit uncomfortable.
is he the saint you paint him to be?
pls take it easy and stick to points we can agree on, leave the superlatives for City People and co.

Vladmir 2:
My level of patrotism has shrunk to a record low.I can't just trust any of these government officials yet.

i trust absolutely no one in the Nigerian polity, Lamido included. the bottom line is that a few wrongs are being corrected, even if selective.
let the accused and sacked declare their innocence.
they cannot hence they remain condemned.
if we wait for a saint to clean the system, e go tey.
that is why irrespective of any skeleton that may come out of Ribadu's cupboard, i think he did more good than evil. no one who was caught by him can claim to be innocent.
it is always a case of 'i was not the only one in the act' or 'what of the others'.

Sagamite:
Be realistic, mate.

No chance in hell as long as they (the borrower) did not do anything fraudulent on their part to acquire the loan. The government can only scream and go into a trance, you can't touch them outside the terms and conditions of the loan agreement.

many of them are defaulting in the terms.
some just collected the monies and went on a spending spree.

oh boy wetin?

the only innovation known in Nigerian banks is fraud.