Breaking News
Translate

EFCC quizzes Ebong, Nwosu, Ibru, trails others

By Omoh Gabriel, Dayo Benson, Peter Egwuatu Innocent Anaba and Emma Ovuakporie
Akingbola gets court’s leave to challenge sack, CBN guarantees foreign loans of affected banks

LAGOS—The Economic and Financial Crimes Commission,  EFCC, said yesterday that it had arrested three of the five former Managing Directors of banks sacked last week by the Central Bank of Nigeria for questioning, just as the apex bank also had guaranteed all foreign loans and correspondent banks lines of the affected banks.

Also yesterday the Federal High Court granted the former Managing Director of Intercontinental Bank Plc, Dr. Erastus Akingbola, leave to challenge for the purpose of quashing, his removal as the MD of the bank by the Governor of CBN, Mallam Lamido Sanusi. The out-going Chief Judge of the Federal High Court, Justice Abdullahi Mustapha, granted the leave, following an ex-parte application by Akingbola’s counsel, Chief Felix Fagbohungbe (SAN).

lIbru Quizzed, Ebong Quizzed, Akingbola:In court and Nwosu was also  Quizzed by EFCC
lIbru Quizzed, Ebong Quizzed, Akingbola:In court and Nwosu was also Quizzed by EFCC

The sacked bank Managing Directors  in the EFCC custody as of yesterday evening were Mr. Bartholomew Ebong, formerly of Union Bank Plc and Mr. Okey Nwosu formerly of Fin Bank MD; and one Mr. Peter Elolo of Falcon Security.

Vanguard also  learnt that Mrs Cecilia Ibru, former MD of Oceanic Bank was picked yesterday by operatives of the States Security Services SSS , when she attempted to leave the country. Mrs Ibru and others arrested by the SSS were to be handed over to the EFCC later .

The commission had earlier threatened to declare the ex- bank chiefs wanted but dropped the idea after some of them were   apprehended. EFCC spokesman,  Femi Babafemi, told Vanguard on telephone that “we only threaten to declare them wanted , but we have gotten some of them already.”

CBN guarantees all foreign loans

Also yesterday, as a way of assuring foreign investors and correspondent banks that all is well with the Nigerian financial system, the Central Bank of Nigeria said it would guarantee all foreign loans and correspondent banking lines to the five banks bailed out on Friday in a N 400 billion rescue package.

The apex bank in a statement said the five banks which management it sacked for poor corporate governance and non performing loans would have all their foreign loans and corresponding banking lines guaranteed by it, stating that it will soon organise a road show in London to explain its action and dialogue with foreign investors.

The CBN in the statement said “Following the recent regulatory action taken by the Central Bank of Nigeria in respect of Afribank, Finbank, Intercontinental, Oceanic and Union banks, it has become necessary to make the following clarifications.  The Central Bank of Nigeria’s action is aimed at strengthening the financial condition of the affected banks and ensure  the protection of depositors and creditors funds”.

According to the statement “The Central Bank of Nigeria hereby guarantees all foreign loans and correspondent banking lines of the 5 banks” and “will very shortly organise a road show in London to explain its actions and dialogue with investors and correspondent banks.”

The apex bank statement further said “The Central Bank of Nigeria reiterates its commitments to ensure the stability of the banking industry and will therefore not allow any bank to fail.”.

The central bank on Friday injected N 400 billion into Afribank, Finbank, Intercontinental Bank, Oceanic Bank and Union Bank, saying their undercapitalisation posed a risk to the entire banking system. The five institutions, which between them account for 40 per cent of banking sector credit in Nigeria, had run up bad loans worth a total of N 1.14 trillion.

The central bank has said the capital will be convertible into Tier 2 capital or preference shares and that its intention is to find investors as quickly as possible to recapitalise the five institutions.

Court grants Akingbola leave to challenge removal

The recent removal of Managing Directors of five banks in the country, took a new twist yesterday, as a Federal High Court sitting in Lagos, granted the former Managing Director of Intercontinental Bank Plc, Dr. Erastus Akingbola, leave to challenge for the purpose of quashing, his removal as the MD of the bank by the Governor of the Central Bank of Nigeria (CBN), Mallam Lamido Sanusi.

The out-going Chief Judge of the Federal High Court, Justice Abdullahi Mustapha, granted the leave, following an ex-parte application by Akingbola’s counsel, Chief Felix Fagbohungbe (SAN).

The court granted the first prayer of Akingbola, which was for “an order of this court granting leave to the applicant (Akingbola) to apply for judicial review by seeking an order of certiorari for the purposes of vacating and quashing, the order of Central Bank of Nigeria dated 14/8/2009, made by the Governor of Central Bank of Nigeria, Mallam Sanusi, on behalf of the Central Bank of Nigeria”. Further hearing in the matter has been adjourned till August 25, 2009.

Defendants in the suit are Mallam Sanusi and the CBN.

Akingbola is meanwhile, further praying the court to declare that there was no order made as at 18/6/2009 or at anytime at all by Mallam Sanusi for a “special examination” into the books and affairs of Intercontinental Bank Plc, during the management headed by the applicant as the Group Chief Executive”.

Other reliefs sought by him, include:
* A declaration that the “Joint CBN/NDIC Ad_Hoc Assignment” conducted on the books and affairs of Intercontinental Bank Plc, from 18/6/2009 during the management headed by the applicant as Group Chief Executive of Intercontinental Bank Plc, is not a “special examination” as required by the Banks and Other Financial Institutions Act, Cap. B3, Laws of the Federation of Nigeria, 2004

* A declaration that the purported examination or investigation ordered by the 2nd respondent, (or conducted at its instance) into the books and affairs of Intercontinental Bank Plc, based on the letter of 18/6/2009  and signed by one E. O. Owajulu, a Deputy Director, on behalf of the Director of Banking Supervision of the 2nd Respondent during the management headed by the Applicant or at any time whatsoever, did not comply with the  requisite enabling statutes, due process of law and the rules of natural justice.

* The sum of N50billon as exemplary damages against the Respondents, jointly and severally.

Naira depreciates slightly

Meanwhile the CBN sold $300 million at an exchange rate of 150.27 to the dollar at its two-weekly foreign exchange auction on Monday, short of the $422 million demanded, Bankers said on Tuesday.

The regulator had sold dollars at N150.06 at its previous auction on Thursday, the day before it injected 400 billion naira into five banks and removed their top management in a bid to prevent a systemic banking crisis.

The unprecedented move on the banks caused the naira to depreciate on the inter bank market, where it closed at N 158.60, amid fears of capital flight. But dealers said the naira strengthened a little after the result of the central bank auction was released on Tuesday, trading at N158.40 to the dollar. Demand for the dollar was expected to remain strong as banks seek to cover open positions, indicating that the naira could weaken further before close of market, traders said.

Stock market loses N241.5bn in two days

After two days of the suspension of  trading on the five banks’ shares whose managing directors were sacked by the Central Bank of Nigeria (CBN) last Friday, stock market has lost N241.519 billion, as market capitalisation declined from N5.556,091 trillion on Friday last week to close at N5,314,572 trillion, yesterday( Tuesday ).
The All-Share Index, another stock market gauge also declined significantly by 1,053.60 points basis from N24,237.85 points to close yesterday (Tuesday) at 23,184.25 points.

The market capitalisation and All share index are major stock market performance indicators which measure the value and trends of securities price movement in the stock market respectively.

The five banks’ shares that were suspended from trading on the stock market include: Intercontinental Bank Plc, Union Bank of Nigeria Plc, Oceanic International Bank Plc, Afribank Nigeria Plc and Fin Bank Plc.

The absence of these five banks’ shares from trading has affected investors’ return on investment, in the form of capital gains from the secondary market.

Meanwhile, Director General of the NSE, Professor Ndi Okereke Onyiuke has admitted that the suspension of trading of the five banks’ shares will affect the market capitalisation, adding that the suspension was placed on the banks’ shares to protect the interest of investors and the market generally.

She said, “ We could not allow the shares to be traded on the stock market because of the circumstances leading to the sack of the managing directors of those banks.

Nevertheless, we shall place only two weeks suspension on the shares and then watch what will happen in the banks as the new managing directors take over. We shall also watch the reaction of the market.”


Disclaimer

Comments expressed here do not reflect the opinions of vanguard newspapers or any employee thereof.