Sufuyan Ojeifo
12 July 2009
Lagos — A proposal that former directors of 13 failed banks who used their insider position to secure N53.3 billion loans that resulted in the failure of the banks should be prosecuted by the relevant agencies of government is very high on the card in the Senate. A motion to that effect is, as learnt, in the works; and barring any unforeseen circumstance, the legislative action is expected to be perfected within the next few days
Indication that senators are well disposed to their prosecution emerged on the floor last Tuesday when the report of the public/investigative hearing on the agonies of depositors of failed banks and financial institutions was debated and all is recommendations approved by the Upper House. The approval was to set the stage for the declassification of the list of former directors who were involved in insider credit abuse.
Eight of the 11 members of the Senate Committee on Banking, Insurance and other Financial Institutions signed the report, which was read by the committee chair, Senator Nkechi Nwaogu. Those who signed the 12-page report are Nwaogu, Kolawole Bajomo (Vice Chairman), James Manager, Muhammed Muhammed, Ayodele Arise, Patricia Akwashiki, Ahmad Maccido and Patrick Osakwe. Those who were not around to sign the report are Chimaroke Nnamani, Gbenga Ogunniya and Idris Umar.
Expectedly, many senators would want to enlist their names in the list of sponsors of the motion that will seek the prosecution of the former directors. Senator Bassey Ewa-Henshaw (Cross River South) said last Tuesday, that debate on the report should be reopened to enable the Upper House consider the issue of prosecution. He contended that members were only privy to the list of offenders after the recommendations in the report had been approved.
The fact that a Senate sitting cannot revisit an issue on which a decision has been reached unless necessary steps are taken to raise the issue on another legislative day was indeed the saving grace for the debtor directors because, given the mood of the senators, last Tuesday, the support for their prosecution would have swayed the Upper House to endorse it. Ewa-Henshaw, no doubt, registered his suggestion and gave the senators and the Senate a food for thought.
He had come under order 53(6) of the Senate Standing Rules (2007 as Amended) in his bid to open a new vista on the issue, but the Senate President, Senator David Mark had refused to approve the request, saying it was not procedurally and properly tabled. He said he knew Ewa-Henshaw was heading in that direction (prosecution) and that he must necessarily come through a substantive motion which would be slated for another legislative day and that the leadership must be notified in writing.
Prior to the approval of the report, Senator Olorunnimbe Mamora, without inkling into the details of the list, had said: "A lot of violation and disregard for rules was carried out by the bank executives. There must be mechanism for enforcement of rules to bring these people to book." Senator Ahmad Lawan stated: "What happened in the bank was a betrayal of public trust. It was an abuse of trust that people would put their money and because some people were privileged to know some directors, they would take money without due process, without even paying back."
The gory details of insider credit abuse-how the former directors perpetrated it-would still have, up till now, been wrapped in secrecy but for the fifth recommendation contained in the committee report, to wit: that the committee should be mandated to publish the names of those involved in insider credit abuse. Perhaps, the committee was expecting a mandate that would enable it publish the names in the media at a later date in which case, it (publication) could be deployed for some personal benefits.
But that would appear to be a Freudian slip on the part of the committee; the Senate cashed in on the recommendation by resolving there and then that it should read out the names in the list submitted by the Nigerian Deposit Insurance Corporation (NDIC). Mark had ruled that Nwaogu should read out the names, declaring that the Senate as an institution must be upright in the fight against corruption. He said failure to announce the names of the creditors would amount to shielding corrupt people in the society.
Nwaogu was hesitant. She seemed to have developed cold feet. The Senate nudged her on. And, as she read, she was deliberately not audible. Some of her colleagues, including Kanti Bello (Chief Whip), asked her to raise her voice. She disclosed that N53.3 billion was the total indebtedness by the former directors to the 13 failed banks out of which N4.722 billion only had so far been recovered by the NDIC. And, as she disclosed names with the details of their indebtedness, some of her colleagues would occasionally volunteer some exclamations because the names were familiar; they are men of means who bestride the public and private sectors of the economy like a colossus. Consider some of the names that featured in the list: Former Minister of Science and Technology, Chief Ebitimi Banigo; former Minister of Information, Chief Dapo Sarumi; former Governor of old Kwara State, Alhaji Shaaba Lafiagi; an industrialist, Prince Samuel Adedoyin; a businessman, Sir Emeka Offor; and former Minister of State for Foreign Affairs, Chief Dubem Onyia; former presidential aspirant, Mallam Saleh Jambo.
Others are former governorship aspirant in Lagos State Commissioner, Chief Remi Adiukwu-Bakare; her husband, Chief Stephen Oluwalogbon Bakare; Senator Chris Adighije; Senator Mike Ajaegbo; Chief Great Ogboru; Sir Victor Odili; Mr. Paul Achimugu; Mr. Adeyeba Adekunle Johns; Chief C.M. Ibeto; Alhaji Abbati Aminu Saleh and Ibrahim Aminu Saleh. Although, the name of foremost industrialist, Alhaji Aliko Dangote, featured in the list as having received a credit of N650 million from the failed Liberty Bank in the name of Bullion International and Dangote Group of Companies, the NDIC indicated under recoveries made that he had liquidated the entire loan.
On his part, Offor through his Chrome Oil Services and other related companies got N7.5 billion from the defunct African Express (AFEX) Bank and has repaid over half of the sum (N3.8b) taken as indicated in the NDIC list. Offor has, however, said he had defrayed his debt to about N900 million and that he was at the verge of offsetting the balance when the report was made public by the Senate. He has a proposal before the Senate Committee on how he will liquidate the outstanding indebtedness to AFEX Bank.
In the proposal, dated May 14, 2009, addressed to Nwaogu and signed by Company Secretary/Legal Adviser of Chrome, Anthony Achebe, Offor's Chrome said AFEX Bank total deposit liability as at December 31, 2005 was N6.6 billion. The letter stated that the deductions/payments to date included N3 billion deposit to Central Bank of Nigeria by Chrome Group on January 12, 2006; N449,980,379.00 deposit to NDIC on June 28, 2006; N100 million deposit to NDIC on December 18, 2007; N100 million deposit to NDIC on March 20, 2008; interest on the N3 billion deposited at CBN at 10% per annum up to May 31, 2009; and, payment of N1 billion to NDIC by UBA under the cheery picking arrangement.
According to the letter, "Outstanding balance viz-a-viz the defunct African Express Bank total deposit liability is N934, 925, 129.00." The letter stated further: "Security- Chrome Group's Account with the defunct African Express Bank, Plc, were secured principally by a Lien on 100 (one hundred) million units of the common stock of Environmental Remediation Holding Company (ERHC)-an American registered company listed on NASDAQ. The originals of the share certificates of the above stocks are in the custody of the NDIC.
"We wish to observe that despite our efforts towards the repayment to the outstanding depositors of the defunct AFEX bank, Plc, no effort is being made to recover the outstanding loans of about N4 billion from the other customers of the Bank. Our proposal has thus taken into consideration, our previous repayments vis-a-viz the receivables from the cherry picking exercise conducted by the regulatory authorities as well as the entire deposit liabilities of the defunct AFEX Bank, Plc.
"In view of the foregoing representation, we humbly request that Chrome Group makes a good faith payment of N1, 200,000,000.00 (One Billion, Two Hundred Million Naira) in twelve equal installments effective June 1, 22009 in full and final settlement of its indebtedness as against the outstanding balance of N934, 952,129.00 needed to pay the outstanding deposit liabilities of the defunct AFEX Bank, Plc. Our request to pay the above stated sum is borne out of our genuine desire to offset the indebtedness and taking into consideration that other debtor customers of the defunct Bank are yet to take steps towards liquidating their outstanding indebtedness."
Nwaogu had spent about 30 minutes reeling out the names and the details of the credit and recoveries made by the NDIC. Some of the details indicated that the highest insider credit abuser was a former director of failed Gulf Bank, Adeyeba Adekunle Johns, who got about N7 billion.
Banigo, former Chairman of failed All States Trust Bank, got about N3.2 billion with only N10 million recovered from him so far. The remaining outstanding of about N11.8 billion was got by companies against whom no directors' names were indicated. An individual (Prof. Nta Henshaw) got N17.9 million, bringing the outstanding balance to N15, 170, 852,591.19.
Others are: Eagle Bank former directors - Alhaji Ibrahim Aminu Saleh and Abbati Aminu Saleh (N26.918 million) - who were personally guaranteed by their father and former Secretary to the Government of the Federation, Alhaji Aminu Saleh; and Paul Achimugu (N5.5 million), among others; Trade Bank: Alhaji K.A. Olatunde (N13.3 million); Alhaji S.Y. Abdullahi (N1.25 billion); Lafiagi (N1.156 million) and David Chuka Nwosu (N3.4 million), among others; Gulf Bank: Alhaji Sanusi Ado Bayero (N45.003 million), Babajide Rogers (N11.874 million), and Muyiwa Osho (N242.1 million); City Express Bank: Prince Samuel Adedoyin and Mrs. Sola Adeoti (who both got N5.584 billion for different companies in which they allegedly have interest, out which N453 million has been recovered so far).
But Adedoyin, a day after, denied any indebtedness totalling N5.584 billion to the defunct City Express Bank. Reacting through his solicitors, Sanusi, Akinrimisi & Co, Adedoyin stated that he was not indebted to the defunct City Express Bank in the sum stated. Text of the solicitors' statement reads: "Sequel to the takeover of the defunct City Express Bank by the Central Bank of Nigeria (CBN) in December 2005, an Interim Management Committee appointed by the Central Bank of Nigeria alleged that our client and his companies were indebted to the defunct City Express Bank in contradictory sums ranging from N585,000,000 (Five Hundred and Eighty-Five Million Naira) to N1.2 bn (One Billion, Two Hundred Thousand Naira). These contradictory figures our client has vehemently denied owing.
"Nigeria Deposit Insurance Corporation (NDIC) also forwarded a petition to the Economic and Financial Crimes Commission (EFCC) but was unable to substantiate the sum allegedly owed by our client and his companies. Series of suits have been filed and are pending at the Federal High Court, Lagos in relation to the sum allegedly owed by our client and his companies. However, the sum of N5.584bn (Five Billion, Five Hundred and Eighty-Five Million Naira) forwarded to the Senate Committee on Banking, Insurance and Other Financial Institutions by the NDIC as the amount allegedly owed by our client was never at anytime owed by our client and his companies.
"Our client denies owing the defunct City Express Bank the sum of N5.584bn (Five Billion, Five Hundred and Eighty-Four Million Naira) and stated that the figures forwarded to the Senate Committee on Banking, Insurance and Other Financial Institutions by NDIC are fictitious and untrue. Our client shall forward a detailed and comprehensive petition to the Senate Committee on Banking, Insurance and Other Financial Institutions to refute the libellous and mendacious publication as presented to the Senate Committee on Banking, Insurance and Other Financial Institutions by NDIC."
The committee had also read out names against Assurance Bank of Nigeria Plc: Angela Onyeador (N30.7 million), Chuka Nwokoko (N31.9 million), and Moore Onyekaba (N3.6 million), among others; Liberty Bank: Chief Victor Odili (got N41.1 million; N10.6 million and another N2.6 million got in the name of Colodense Nigeria Limited) and Dr. T.C. Osanakpo (N43.6 million got in the name of Rison Palm Limited); Hallmark Bank: Alhaji B.I. Bunu, Chief F.E.C. Adiele, Chief Jude Akpunku, Dr. Sam Eke, Nnamdi Anyaehie, Nze Maduako and others got a total of N9.3 billion; Lead Bank: J.I. Abulime (N5.8 million), Mallam Saleh Jambo (N17.2 million), Captain Onu and Chief Dubem Onyia (both got N26.6 million in the name of Easy Link Aviation).
Metropolitan Bank: Senator Chris Adighije (N1.9 million); Senator Mike Ajaegbo (N210 million), Chief (Mrs) Remi Adiukwu-Bakare (over N1.093 billion); Great Ogboru (N799.7 million); Oladapo Sarumi (N3.8 million); and Chief S. O. Bakare (about N800 million). But Adighije, a member of the Senate (2003 to 2007), who was indicated in the NDIC report to have collected N1.9 million loan from the defunct Metropolitan Bank in insider abuse, a day after the disclosure on the Senate floor, paid up the entire debt vide a Guaranty Trust Bank draft dated July 8, 2009.
In his letter to the Managing Director of the NDIC, entitled, "Indebtedness to Metropolitan Bank (In Liquidation), he said, "It has just come to our notice through newspaper publications that we are indebted to Metropolitan Bank now liquidated to the sum of N1.9 million only. This state of affairs was not known to us. We had no information about this. One Okolonji of NDIC called a month ago and promised to forward the details to us. He did not do that; he said he was ill."
But in an interview after he made the payment to the NDIC, Adighije said that he was not a director of Metropolitan Bank and could therefore not have been involved in insider credit abuse. Adighije, who was defeated by Nwaogu in the Abia Central Senatorial District election, an election outcome which is still in court, said, "This is another bad politics from Senator Nkechi Nwaogu aimed at me. She mentioned my name knowing that I was never a director nor an insider of any banks who are the specific objects of her investigation. I was not aware of the loan which was obtained in the course of business as obtainable by many other Nigerian businesses. If it is not bad politics why did she single me out, her electoral opponent, to be listed among bank directors and bank owners whereas I am not in either category?"
There was a sensational dimension to the declassification of the names: after she rounded off and laid the report on the table of the Senate, Senator Enyinaya Abaribe (PDP, Abia South) raised the alarm that Nwaogu's mobile phone was already being inundated with text messages threatening her life. But Mark, however, assured her that the Senate would request the Inspector General of Police (IGP) to provide her and members of the committee with adequate security to protect them. He said the Senate was proud of them and that the Upper House would not abandon them after having done a great job in the interest of the nation.
Hear him: "You have performed wonderfully. I commend you for the courage to bring this to limelight. You do not need to be afraid for what you have done for your country as those that have sent you the text messages should first think twice about their actions. We stand by you; we are together in this and we take full responsibilities for this report. It is a far-reaching report. We will do what we have to do. We must play by the rules. Those names here should be ashamed of themselves."
The Nwaogu-led committee is still tracking the indebtedness with a view to getting the debtor director and the companies for which they got the loans to pay up so that depositors of the failed banks can get their money back. A series of meetings have been scheduled with the Central Bank of Nigeria (CBN), NDIC and the debtor directors along this line. The Upper House had directed the NDIC and the CBN to immediately convene a meeting of parties to all pending court cases with a view to enabling the Senate Committee facilitate their resolutions. Besides, the NDIC, as resolved by the Senate, is to come up with a plan for immediate payment of all depositors irrespective of the pending court cases and to put a definite deadline for the completion of the process.
Many other salutary benefits and possibilities are derivable from the Senate intervention. Perhaps, the only possibility that the debtor directors would not want is prosecution. It has already caused panic-situation. Will they therefore quickly liquidate their indebtedness and if they do, will it vitiate the fact that their action had already led to the failure of the banks? This is the issue. Perhaps, if they pay up the debt and the Upper House does not press the case further, prosecution may just be out of the picture.
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