20 April 2017

Nigeria: Task Force On Failed Banks Returns

THE Nigeria Deposit Insurance Corporation, NDIC, yesterday, said that the task force on failed banks will soon re-arrest for prosecution of directors and officers of licensed banks who had committed banking malpractices and absconded.

The corporation said in a statement entitled, "Task Force on implementation of Failed Banks Act to re-arrest accused persons that have absconded," that the taskforce, an offshoot of the Failed Banks Decree of 1994 under late General Sani Abacha, was constituted in 1998 by the General Abdulsalami Abubakar's military government to co-ordinate the different agencies involved in implementation of the criminal aspects of the Failed Banks Act.

Banking malpractices

The members were drawn from the Federal Ministry of Justice represented by the Director of Public Prosecution of the Federation, the Central Bank of Nigeria, the Failed Banks Inquiry (now Financial Malpractices Investigation Unit), the Special Fraud Unit of the Police and subsequently, the Economic and Financial Crimes Commission, EFCC.

According to the statement signed by the Director of Legal Department, NDIC, and chairman of the taskforce, Mr. B.A Taribo, "the Task Force had at its 38th meeting held on March 13, 2017 reviewed some pending investigations by the Police Financial Malpractices investigation Unit (FMIU) under the Failed Banks Act comprising 17 cases involving 10 closed Microfinance Banks (MFBs) in which 15 former directors of the MFBs were involved.

"It also reviewed two cases of closed Deposit Money Banks (DMBs) involving their former directors. One of the closed DMBs cases currently under prosecution was FRN vs. Prince Adekunle Adeyeba & Ors where the accused persons being erstwhile directors of the closed Gulf Bank of Nigeria Plc. were facing trial over banking malpractices involving N15.1 billion of depositors funds in that closed bank.

"The Task Force also reviewed about 16 criminal cases being prosecuted under the Failed Banks Act in which prosecution had been stalled as a result of the fact that the accused persons in those cases had jumped bail and had absconded from the country in the heat of their investigation and prosecution. The sureties that took them on bail had also disappeared.

"The Task Force noted that some of those accused persons had sneaked back into the country in the hope that their prosecutions might have been terminated. It is against this backdrop that the Task Force gave the notice that such accused persons would be re-arrested and prosecuted to serve as a warning to other bank offenders, while the Task Force would leave no stone unturned to ensure that erring bank offenders were brought to book."

It would be recalled that the Failed Banks (Recovery of Debts) and Financial Malpractices in Banks Act 1994 (Failed Banks Act) was promulgated by the regime of late General Sani Abacha to recover debts owed to Failed Banks which had remained outstanding as at the date the banks were closed or declared failed and to prosecute directors and officers of licensed banks who had committed banking malpractices.

In July 1995, the office of the Inspector General of Police established a special Police Unit called the Failed Banks Inquiry to assist the Nigeria Deposit Insurance Corporation and the Central Bank of Nigeria implement the criminal aspects of the Failed Banks Act through investigation of criminal complaints referred to the Unit by the Regulatory Authorities.


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