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CBN acted hastily

Chief Timothy Adesiyan, President, Nigerian Shareholders Solidarity Association of Nigeria (NSSA)
What is the reaction of the shareholders on the recent move by the CBN to sell five banks to foreign investors?

At the moment, the CBN has no shares in these banks. How can CBN or government sell what it does not have. The shareholders are the owners of these banks and should be consulted before taking any action to sell those banks.

The CBN is meant to control the activity of banks in order to ensure that depositors and shareholders’ interests are protected.  But as it is now, it is like the shareholders are neglected. We are not going to allow that.

Do you see any wrong in the reform being implemented by the CBN ?

Well the reform in the banking sector is a welcome development. We are happy that the CBN discovered that the shareholders’ funds have been eroded. We are also happy with the injection of the  N400 billion into these banks to allow them meet their day to day obligation, which is a welcome ideas. The CBN is suppose to improve the quality of governance and direction of these banks and that is what I assumed meant bringing in foreign investors. The foreign investors is suppose to bring in their technical knowledge as well as their experience to bear. They are expected to cut down lending  rate to as low as 4 or 5 per cent as done in advanced countries. They should act as other participants and not to be given entire 100 per cent control. In fact, the CBN should also give Nigerians who are qualified and have the technical skill to participate in the sale of these banks. We have Nigerians that can pilot the banks very well, what is needed is to search for them. It is not within the rule of law to sell our shares to foreign investors. The CBN should ask for our opinion before taking any action to sell these banks.

Is the sacking of the five banks’ executive directors by the CBN in order, was the sack as a result of the corruption in the industry?

Anyway, in the first place sacking the Chief Executive Officers and the executive directors are not in order. The CBN would have given them the chance to explain how these loans were given and why it has accumulated to that level. I know that some of the chief executives are not corrupt. They pioneered the banks and push it to the level they are now. I don’t think some of the chief executives were corrupt probably their officers could be corrupt.  The CBN was to fast to act, may be they thought if they give them the chance to defend themselves they will get out of it. But all the same they should have been given opportunity to defend themselves.

How do see the role of the banks’ examiners and external auditors of these five banks whose accounts were satisfied before the bad loans was now discovered?

The banks’ examiners should also be probed and prosecuted. The examiners stay with these banks three months before their books are approved. So if the examiners were active they should have discovered these rots and advise the banks accordingly. The examiners compromised their responsibility and hence should be punished accordingly.

The same goes to the external auditors who examine these books. The law allows them to report their findings in the course of auditing.

Most of the times, auditors will state that they have examined the books of these banks and they are in conformity with the accounting standards. The auditors should be prosecuted as well. They are paid fees and they see these books presented to them by the banks.. Unlike the audit committee members, we see the books afar. It is what they want to show us that we see. We are not paid any fee by the banks so, we do less work. Even some of the  audit committee members don’t even have any accounting knowledge. The banks will just show them some books and will say to them that the external auditor has gone through the books and has approved them . So what do you expect the shareholder who is in the audit committee to do than to concur.


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