Lagos — THE Central Bank (CBN) has vowed that it would not allow the ownership of the five rescued banks return to their former owners and also listed the criteria to be met by new core investors seeking majority holdings in the banks.

It also warned that it would not allow banks to be run as a sole proprietorship but as institutions that would imbibe the tenets of good corporate governance while promising to treat shareholders of the affected banks fairly.

Meantime, Mrs Cecilia Ibru, former Managing Director of Oceanic Bank Plc who met her bail conditions last night has been released by the Economic and Financial Crimes Commission to go home.

The CBN allayed fears of nationalising the five troubled banks whose managing directors and executive directors were sacked following alleged misuse of shareholders' funds.

Sacked bank chiefs gone for good

The CBN Governor, Mr. Lamido Sanusi, yesterday, in Lagos, while briefing the capital market community of the recent reform in the banking industry said "we have no plan to nationalise these banks but we won't return the sacked bank chiefs and their executives to these banks as we have appointed competent people to manage and return them to a positive level.

According to the Governor, "we would ensure that due process is followed when these banks are ready to bring in new investors who have the technical expertise and who imbibe good corporate governance in their activities."

According to him, "The CBN is very conscious that there are very many people who bought shares of the banks and who have nothing to do with the conditions the banks are in now, who have an interest in those banks and who participated in a fair and transparent manner in having stakes in these banks.

In fact, I have said that very clearly in the past, we will not treat shareholders unfairly and will go through all the processes that we will need to go through before any change takes place, but we will not allow these institutions to fall back into the 'key man' scenarios that they had before. That is the only minimum condition."

Sanui also disclosed that the apex bank has engaged international and legal advisers on financial credit to educate banks on risk management and control "because we are interested in the growth, liquidity and progress of the banking industry.

"We have not offered any of these banks to any investor, neither do we intend to force on these banks, any investor. However, the CBN would not allow these banks to go back into the same 'key man' structure that led it to where they are."

The CBN Governor refuted alleged withdrawal of credit line by the foreign correspondents' banks of the troubled banks, saying "we have guaranteed these banks and has assured the foreign correspondent banks that the reform in the banking industry was to make the banks strong and reliable.

Let me say emphatically that no correspondent bank has shut down its line of credits to these banks and the new managing directors can attest to this. CBN is not managing these banks and has no intention to manage them either now or in the future. Our purpose is to ensure that there is confidence in the industry."

5 Banks run as private property

On why the CBN took the measure to sack the managing directors and executive directors of the trouble banks, Sanusi said, "There was lack of capital adequacy, lack of liquidity, lack of corporate governance and the banks were run as sole proprietorship. Confidence would be restored when there is transparency. So our intention is to protect the banks in order to avoid a recession of the system which occurred in the past."

Banks dishonour repayment mode, say stockbrokers

Meanwhile, stockbrokers have complained of the five troubled banks not honouring the restructured repayment mode of their debts before the new management takeover saying the capital market is unique.

Mr. Emeka Nmadubuike, Managing Director of Compass Securities Limited, who spoke for the stockbrokers, said "as an association, when all of these problems started last year, we engaged all the banks that we are dealing with.

We met with their representatives and we had a general understanding that given the nature of these facilities and given the status and posture of the market, that the best bet is to restructure these loans. Almost all the banks that we met with, agreed and have restructured these loans up until on August 14.

"It is now after this day that some of these banks are now going round to say that they will not abide by restructuring agreement signed with stockbrokers.

"The appeal we are making, is that you impress on the banks and encourage them to go along with the restructuring that have been put in place. This is because, as stockbrokers, we think that there is still hope for the market. If for any reason, the prices of stocks change today, all of the facilities will become performing."

'Banks, stockbrokers irresponsible'

On the position of the margin loans given to stockbrokers by these banks, Sanusi said, "The banks and stockbrokers are irresponsible for the huge debt of N450 billion.

How can a responsible and ethical bank give a loan of high magnitude to a stockbroker whose business or dealings are volatile. So the banks should be blamed for not managing their risks effectively.

The same irresponsibility goes to the stockbrokers who know the kind of business they do. An equity business which goes up and down does not require this volume of loan."

The CBN Governor advised the stockbrokers to liaise with the banks on the mode of repayments of their debts, saying, "we are not going to detect to the banks on how they would recover their debts, but the banks would fashion ways of recovering the debt. Stockbrokers you are advised to pay your debt if you have the money."

Audit of 14 banks out Oct

The Governor further disclosed that the results of the remaining 14 banks will be made known in October, noting, however, that the results of the remaining 14 will be better than the results of the 10 banks.

Ibru freed on bail

Only Mrs Cecilia Ibru, of the four former Managing Directors of the five banks and other bank executives, who were admitted to bail, early in the week, following their arraignment before a Federal High Court sitting in Lagos, was eligible to walk out of the confinement of the Economic and Financial Crimes Commission, EFCC, by yesterday night.

She was said to have met the bail conditions handed down by the court.

According to the EFCC spokesperson, Mr. Femi Babafemi, only the affidavit of Mrs. Ibru, former Chief Executive Officer and Managing Director of Oceanic Bank Plc, and other particulars of her two sureties had been verified by the Commission and was released last night.

According to Babafemi, after verifying her documements, the EFCC took her back to the court where she was released.

Mrs. Ibru's sureties were given as Chief Edwin Clarke and Senator Fred Brume.

The bank chiefs who were recently sacked by the Central Bank (CBN) Governor, Mallam Lamido Sanusi, were arrested by the EFCC, which charged them to court on five separate charges, bordering on economic sabotage and threats to the economic health of the nation and fraud, concealment and grant of loans without adequate collateral, running into billions of naira.

The court on Monday and Tuesday, granted Mrs. Ibru bail, alongside the other accused persons, including former Managing Directors of FinBank Nigeria Plc, Mr. Okey Nwosu; Mr Bartholomew Ebong of Union Bank of Nigeria Plc and Mr Sebastian Adigwe of Afribank Plc.

Others are the seven former non-executive members of Intercontinental Bank Plc, Dr. Raymond Obieri, Engr. Hynacinth Enuha, Christopher Alabi, Chief Samuel Adegbite, Alhaji Isyaku Umar, Mr. Bayo Dada and Elder Sanni Adams, two Union Bank Directors and a bank debtor.

Trial judge in the matter, Justice Dan Abutu, who granted the 14 accused persons, similar bail conditions, had also ordered that the accused persons must not travel outside the country during the pendency of the charge, while they are to report to the Economic and Financial Crimes Commission (EFCC), Abuja office, every first working day of every month.