Omoh Gabriel and Emma Ovuakporie
25 August 2009
Lagos — More facts emerged yesterday from bankers on the likelihood of eventual takeover of the five banks whose Managing Directors and executive directors were sacked last week on the strength of a letter written to the affected banks by the Central Bank Governor, Mr Sanusi Lamido Sanusi.
Meanwhile, as the deadline given by the anti-graft agency expires today, the agency says it has recovered N15 billion from debtors as many others made frantic efforts to make last minute payment.
Bankers who yesterday volunteered more facts on why bank Managing Directors and their executive directors were sacked, pointed to the letter signed by Sanusi and delivered to the chairmen of Boards of the five affected banks.
The letter written by Sanusi to the banks stated that at the discretion of the CBNgovernor, the funds injected into the banks can be converted to equities.
The bankers expressed fears that the CBN Governor had made up its mind to forcefully take over and change the ownership structure of the affected five banks, hiding under the cover of the CBN Act.
The letter, Sanusi wrote to the Chairmen of the five Banks read: "By order I, Sanusi Lamido Sanusi, Governor of the Central Bank of Nigeria, hereby require Xbank to take the following steps and do the following acts: immediately acknowledge the injection of the sum of N billion, only by the Central Bank of Nigeria, to address the grave situation aforesaid, as credited to the bank's main account maintained with the Central Bank of Nigeria, on the terms of a financial accommodation agreement as may be prescribed by the Central Bank of Nigeria, including but not limited to the following:
"At the option of the Central Bank of Nigeria, the advance shall be convertible into fully paid up securities of the bank; the advance shall be for a maximum tenure of seven years: if the conversion option is not exercised, the advance shall only be callable after the fifth anniversary of the grant of the advance; and the advance shall be subordinated to all other creditors of the bank.
"Give full effect and implement the financial accommodation agreement in respect of the advance made available to your bank by the Central Bank of Nigeria as aforesaid, and executed by the Managing Director/Chief Executive Officer appointed by my Order as aforesaid,
"Adopt, ratify and implement any business continuation plan prepared by the Managing Director/Chief Executive Officer appointed by my Order as aforesaid and approved by the Central . Bank of Nigeria,
"I, Sanusi Larnido Sanusi, Governor of the Central Bank of Nigeria, by virtue of the powers vested in me by Section 33(1)1 of the Banks and Other Financial Institutions Act, Cap 33, LFN, 2004, having being satisfied that: it is in the public interests so to do because, inter alia, Xbank showed excessive liquidity stress with persistent use of the Expanded Discount Window of the Central Bank of Nigeria; and has been carrying on its business in a manner detrimental to the interest of its depositors and creditors , ordered a special examination into the books and affairs of the bank on 22 June, 2009.
"Take all steps and do all things necessary to implement and give full effect to the directives given to Xbank, by the Central Bank of Nigeria, in particular: Make full provisioning for the sum of N billion only being the amount required to be provided in accordance with the Prudential Guidelines for Banks going by the books to the bank as of 31 May being the cut-off date of the Specialised Examination aforesaid.
"Make full provisioning for such other sum or sums as may be required for other lost or doubtful debts that may have fallen due for classification as such, from 1 June 2009 being the date following the cut-off date of the Special Examination aforesaid, till closure of the books of the bank for the current financial year of he bank, in accordance with the Prudential Guidelines for banks henceforth make full provisioning as required by the Prudential Guidelines for banks; and take immediate steps to stop the disregard, breach or violation of rules, regulations, guidelines and administrative directives of the Central Bank of Nigeria especially in respect of the issue, creation, treatment and accounting for commercial papers, bankers acceptances and other off-balance sheet engagement products.
"Take all such other steps and do all such things necessary for the effective turnaround of the bank as I may further direct or order within the next six months of the date hereof.
I hereby further order that the Board of Xbank, meets within a week of this order on a date to be fixed by the Managing Director/CEO appointed by me as aforesaid to consider the state of the bank.
I hereby further order that the Managing Director/Chief Executive Officer and all other persons I have by Order appointed shall remain in office until I otherwise order or direct, and the said persons shall not be removed from office by the bank".
On their part, many debtors made frantic efforts to make last minute payment yesterday as the deadline draws to an end.
Vanguard learnt that business mogul, Mr Jimoh Ibrahim paid in $11million to one of the affected banks before the deadline.
Other debtors equally made efforts to pay various amounts as they made lodgments at different locations of the banks.
Some debtors who could not meet up with the deadline, however, brought documents of properties that could be used as collaterals should they fail to effect payment within a stipulated period.
They pleaded for a period of grace, which the anti-graft agency is not very favourably disposed to though they were not entirely turned down as the documents were said to have been collected.
It was also gathered that the EFCC boss would personally lead the operations to arrest all the defaulters today to recover the debts or get them arrested as she boarded the last flight from Abuja yesterday.
The source further revealed that security reports reaching them in the headquarters indicate that most of the debtors had gone into hiding but that "the agency is set to fish them out."
Global Fleet Group Managing Report, Jimoh Ibrahim made good his promise yesterday when he paid Oceanic Bank the sum of three billion Naira (N3, 000, 000, 000, 00) by wire transfer.
The bank had by a letter dated May 18th, 2009 put the total indebtedness of the Global Fleet Group at N8 Billion having acknowledged previous payment of another N3 billion between December 2008 and May this year.
Acknowledging yesterday's payment, Oceanic Bank in a letter, thanked Ibrahim for his continued cooperation. "The bank undertakes to refund to you any excess charges or debits on the account that is not authorized by you, or interest rate that is not in compliance with our term of loan as soon as the reconciled account is mutually agreed upon," it said in a letter yesterday to him.
Ibrahim said his loan was performing and blamed any outstanding on poor banking relationship. According to him, in 2007 alone, Oceanic Bank by a letter dated 23rd May 2007 credited Global Fleet account with N1.98 billion being reversal of excess charges and accrued interest on the company's account.
"When a bank by its own admission and confession say it overcharged our account with two billion naira, CBN should be cautious, it should figure out what exactly the debt profit is.
This is way I said that our company's account with Oceanic Bank should be audited for the first time in five years," Ibrahim said.
He said Global Fleet had no reason to stop its relationship with Oceanic Bank but advised the bank to be transparent.
He maintained that CBN will succeed only if it publishes exactly what everyone owes and avoid computer error that has reduced some people's debt.
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The steps taken so far by the CBN are indeed in the best interest of the banking public.As an ex-banker with one of the affected Banks,I speak from experience.The CBN should not concentrate on the loans to customers alone,they should also focus on loans taken by the directors,both executive and non executive,I am aware that they granted themselves loans at will.As a matter of fact,the internal auditors of the banks especially the Chief Inspectors should also be held liable as they have been covering up the misdeeds of the banks executives.The EFCC SHOULD look carefully into the code of good corporate governance issued to the Banks by the CBN to see their level of compliance.