Lagos — Debt forgiveness to prominent Nigerians and companies is generating furore among shareholders, banking officials and other stakeholders who see it as politically-motivated and undue favour to beneficiaries.

Vanguard investigation showed that in one of the troubled banks of the N59.709 billion fifteen debtors owed the bank, they have been collectively granted N31.134 billion as debt forgiveness, amounting to 52.1 per cent.

The 15 debtors have had to pay N28.211 billion to have their documents, which served as collateral, released to them.

Investigations showed that Dansa Oil and Gas which owed the bank N13.615 billion was asked to pay N5.446 billion while N8.175 billion was approved for the company as debt forgiveness by the caretaker management of the bank.

This means that the company was granted 60.04 per cent debt relief or forgiveness.

Another company that enjoyed the debt-relief, Bulk Pack, had an outstanding debt balance of N7.272 billion.

The caretaker managers approved for it to pay N2.92 billion while forgoing N4.347 billion, a 59.8 per cent debt forgiveness. Its documents for the loan collateral was released too.

Further investigation showed that Rahamaniyya Oil and Gas owed the said bank N13.6 billion.

It got N4.079 billion debt reprieve from the caretaker managers of the bank and made final settlement payment of N9.521 billion. The company got a 30 per cent debt forgiveness.

In the same vein, Lister Oil which owed the bank N5.7 billion paid N2.9 billion and got from the bank's management N2.8 billion or 49 per cent debt forgiveness.

Another company that enjoyed the debt forgiveness patronage is Dice Trade which outstanding debt profile was N3.6 billion, but paid N1.1 billion and got N2.5 billion or 69.4 per cent debt relief.

Joy Petroleum, another beneficiary of the magnanimity of the caretaker managers of the bank, owed N3.9 billion, paid N772 million and was given N3.128 billion or 80.2 per cent debt forgiveness.

Skyview Properties Limited also received a generous debt forgiveness of N1.86 billion or 70.1 per cent as it paid N79 million out of the N2.65 billion it owed.

Santrust, believed to be owned by a former CBN Governor, which owed the bank N1.73 billion paid N 1.4739 billion and got a debt relief of N260.1 million or 15 per cent debt relief.

According to Vanguard's investigation, Honeywell is also a beneficiary of the goodwill of the caretaker managers of the bank. Honeywell Oil and Gas which owed the bank N1.54 billion paid N600 million and was granted N 940 million or 61 per cent debt forgiveness.

Others which benefitted are Limkers which total debt amounted to N1.89, paid N567 million and got N 1.323 billion relief; Prime Interface owed N586 million debt, paid N307.45 million and got a relief of N273 million.

Others included Intercellular which had N1.78 billion debt and N78 million debt relief; Equity Capital Solution which owed N1.1 billion and got debt relief of N45 million; Reward Investment which owed N586.98 million and got relief of N163 million and Apo International which owed N156 million and got relief of N56 million.

Vanguard recently reported that to recover fully the principal of their non-performing loans, the managements of some of the nine troubled banks were in negotiations with key debtors who applied for forbearance.

Bankers are, however, worried that this may negate the current reform of the banking industry.

The Central Bank Governor, Mr. Lamido Sanusi, had told newsmen in Istanbul, Turkey, last month, that the apex bank will not get involved in the day-to-day running of the troubled banks. He said the onus of running them was in the hands of the managements and the boards.

However, bankers, while stating that it is normal for a long-standing non-performing loans to be considered lost and written off the books of a bank to be so treated, are worried stiff that most of the banks bailed out by CBN have no functional board.

They argued that almost, if not all, board committees in these banks are non-functional, leaving the decision to the Managing Directors, some of whom are acting as sole administrators.

The discretion of some of these chief executives may not be in the interest of reviving the ailing banks, they argued.

They said it is only the accumulated interest and penalty that are built into a loan term that can be granted as waiver not the principal.

But from what is going on, caretaker managers are granting 80 per cent debt forgiveness.

Furthermore, the bankers argued that at a time the Economic and Financial Crimes Commission, EFCC, is busy recovering debts from chronic debtors, it would seem too early in the day for the caretaker managements of the troubled banks to give waivers without the approval of the board.

Such money, they argued, if recovered, will beef-up the capital or shareholders' funds which the non-performing loans have grossly eroded.