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N49bn bank debtors: Senate lists Banigo, Offor, Lafiaji, others

By Emma Ujah, Abuja Bureau Chief, Emmanuel Aziken & Shuaibu Inalegwu
ABUJA — THE Senate yesterday took measures to reinforce the security of Senator Nkechi Nwaogu after threats were made to her life via text messages she received right inside the Senate chambers as she listed some prominent Nigerians owing banks over N49 billion.

Names of royalty, a former Governor, former Senators, ministers, notable gubernatorial candidates, prominent politicians and businessmen featured prominently in the report of the Senate committee on Banking, Insurance and other Financial Institutions on the agonies of depositors in the nation’s failed banks. The names of the prominent Nigerians were made public despite the repeated attempts by some Senators to protect them.

The names were revealed, Vanguard gathered, after presidency officials sent text messages to some members of the Senate leadership asking for the list to be made public.

Among the prominent individuals mentioned, whose debts were in excess of one billion were — Chief Ebitimi Banigo owing All States Trust Bank N15.17 billion
— Prince (Dr.). Samuel Adedoyin owing City Express Bank N2.06 billion
— Sir Emeka Offor owing African Express Bank N3.85 billion

— Chief (Mrs.) Remi Adiukwu-Bakare owing Metropolitan Bank N1.09 billion
Others include former Governor of Kwara State and Chairman of the recent PDP national convention committee, Alhaji Shaban Lafiaji, former Ministers under the Obasanjo administration, Chief Dapo Sarumi and Ms Funke Adedoyin and a son of a former Secretary to the Government of the Federation (SGF), Alhaji Abati Aminu Saleh.

Immediately after the Senate session, a visibly shaken Senator Nwaogu proceeded to the office of the Senate President where security arrangements to reinforce her personal security were said to have been made.

The text messages making threats to her life also alluded to the use of the judiciary to truncate her ongoing electoral dispute with Senator Chris Adighije over representation of the Abia Central Senatorial district.

The Senate report emanated from a motion to investigate the agonies of depositors in failed banks last October. The report which was submitted to the Senate yesterday was based on a report from the National Deposit Insurance Corporation.

As she read the report of the committee yesterday, the Senate became divided over the propriety of mentioning the names of the directors of the failed banks implicated in the Senate report.

While some Senators held that the names should not be mentioned based  on the fact that some of them are holding prominent board appointments many others disagreed.

Among those that spoke in strong support for the release of the names were Senators Olurunnimbe Mamora (AC, Lagos East); Bassey Ewa-Henshaw (PDP, Cross River South); Ahmad Lawan (ANPP, Yobe North) and James Manager (PDP, Delta South).

Mamora insisting that the names be read said, “A lot of violation and disregard for rules was carried out by the banks executives. There must be mechanism for enforcement of rules to bring these people to book.”

Senator Lawan lambasting the directors for betraying public trust said, “What happened in the banks is betrayal of public trust. It is abuse of trust that people will put their money and because some people were privileged to be directors, they took money without due process without even refunding.”

Senator Akergerger arguing why the names should not be made public said some of the debtors were now chairmen of boards of some federal government agencies.

But he was shouted down by his colleagues, before the Senate President, Chief David Mark, gave a ruling mandating the chairman of the Committee, Senator Nwogu to read the names.

According to Mark, the Senate as an institution must be upright in the fight against corruption. He said failing to name the creditors would amount to shielding corrupt people in the society.

Upon the resolution of the Senate, Senator Nwogu proceeded to read out the names.
As she finished reading the names obtained from the National Deposit Insurance Corporation (NDIC), Senator Enyinnaya Abaribe (PDP, Abia South) who sat by her rose up with a revelation that Senator Nkechi was being bombarded with text messages threatening her life while she was reading the names.

But Senator Mark gave her the assurance of the Senate’s protection including getting the Inspector-General Police to give her police protection.

“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 of this report. Those names here should be ashamed of themselves,” he said.

Sanusi unveils agenda

Meantime, new Governor of the Central Bank (CBN), Mr. Lamido Sanusi, has announced the apex bank’s guarantee of all inter-bank placements, as well as placements of Pension Funds with banks.

He told journalists, after the Monetary Policy Committee (MPC) meeting, in Abuja, yesterday, that the guarantee was part of a wide-range of measures to crash the interest rates in the nation’s banking sector, which also included a reduction of the Monetary Policy Rate from 8 per cent to 6 per cent.

The interest rate corridor was, however, restored with an approval of +/- 200 basis points around the MPR.

Mr Sanusi, who was addressing the Nigerian media for the first time since his appointment, categorised the banks into two, with one group having so much liquid which they preferred to invest in the Treasury Bills (TBs) at a mere 3 per cent and the second group of those which lacked liquidity and therefore forced to borrow at very high rates.

The former, he observed, usually preferred the TBs than lend to the latter due to the perceived high risks of those banks.

“It is recognised that high inter-bank rates are substantially driven by the refusal of banks to lend to each other because of the perceived counter-party risk.

Whereas steps are being taken by the CBN to address this problem through proper bank audits, appropriate resolution frameworks and enhanced disclosure and transparency in financial statements, these will take some time before finalisation and full restoration of confidence in the system.

“In view of the dire consequences to the real sector and banks themselves of a sustained regime of excessively high interest rates, it is important to de-risk the inter-bank market and address the concerns of lenders and investors while the regulatory reforms are in progress.

“Consequently, the CBN shall provide a guarantee on all inter-bank placements from July 2009 to March 2010.This guarantee is also extended to placements with banks by Pension Funds.”

Other measures adopted by the CBN in order to tame the interest rates were that overnight placements should not be priced higher than MPR+2 per cent; a mximum spread of 300, 400, and 500 basis points above the MPR for tenors up to 30, 60, 90, days, respectively.

According to Mr. Sanusi, “this will lay the foundation for evolving a risk-free yield curve at the short end”.

He added that in view of the guarantee of the inter-bank market by the CBN, there would be no more new loans on Expanded Discount Window (EDW) and that there would be no extension of maturing obligations.

The governor also announced several measures towards liberalizing the foreign exchange market as he announced the immediate restoration of the Wholesale Ditch Auction System (WDAS).

In his words, “all restrictions imposed recently are removed”.  But he said that the net open position limit for banks was increased to 5 per cent of banks’ capital base.
On the autonomous market, he said “all Class ‘B’ Bureaux-de-Change may now participate directly in the CBN window. Only those with valid licences are eligible.

However, they will make a certain deposit of $20,00 each.  Class ‘A’ BDCs’ capital requirement is hereby reduced from N500 million to N250 million.

The CBN boss who disclosed that the nation’s foreign reserves which stood at $53 billion at the end of last year had been depleted to $43 billion as at last week.

Mr. Sanusi said that the assets quality audit of banks had almost been concluded in 5 banks said his administration would not allow any bank to collapse.

He admitted that some of the banks had issues but insisted, “there is no basis to believe that the banks are unhealthy. There is no basis to conclude that the system is at risk.  We will not allow any bank to die. If there is any problem, we will fix it.”


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