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How bad loans can be recovered — Jimoh Ibrahim

By Emma Ujah, Abuja Bureau Chief
It was an unprecedented action in the recent history of the Nigerian banking industry, when the new Governor of the Central Bank of
Nigeria (CBN), Mr. Sanusi Lamido Sanusi, last Friday sacked five bank Managing Directors in one fell swoop.  As rightly described by some commentators, it was a “sunami”.


Before the dust raised by that action could settled, the Kano prince made good several years’ threat by the CBN to public the names debtors whose activities were described as inimical to the banking industry.  The idea was to name, shame and force the debtors to pay up.

The fearless Sanusi’s decision in this regard was hailed across the country. But some of those involved in the debt saga who happened to be part of the richest Nigerians have countered CBN as they insisted that the figures published against their names were wrong.  Businessman, Bar. Jimoh Ibrahim is one of such men.  He had a chat with Abuja Bureau Chiefs of various media organizations on Wednesday where he faulted the strategy of the CBN but gave insight into how the debts can be recovered.

What is your reactions to the CBN publication of the list of debtors of the banks whose CEOs were removed last week?
This is unfair.  The bank said that we are owing them N8 billion, you as CBN, we didn’t borrow from you, we don’t have any contractual relationship with you and then you come and said we are owing you N14 billion.  And if I am owing N8 billion for Christ’s sake, what is that to the group that we run?

The bank did not publish our deposits.  We have deposits in the bank so if for instance I am owing N 8 billion and I  have 2.5 billion deposit with you, if you net N2.5 billion from N8 billion you will be left with about N 5 billion.  so why do you have to put my name.

And you said that the account is not performing, yet this is the evidence that this guy has paid been paying money into the account with detailed bank drafts and the amounts on three different occasions, not on the same day, the bank is saying the they have been cleared and it is reflecting in the ledger.

How can you say the account is not performing when the itself says the account is performing.  And Oceanic, I am their landlord in 20 branches.  This is not fair.

And some newspapers made my name number one.  Even when some people are owing N88 billion, it is Jimoh Ibrahim that is number one.  It is quite disturbing.

If this happens in other countries of the world, it could really be dangerous.  I don’t have anything against Sanusi, I don’t have anything against CBN.  You can publish the list of debtors, that is not my business but at least publish the exact debt that these people are owing. It is a straight forward case and all I want the CBN to do in order for us not to create “wahala” is just distract.

I give you an example, we borrowed money from Intercontinental, N8 billion.  We paid fully.  We were given a discharge letter, so why this.  We have been paying our debts and we have a lot of deposits in the banks.

Why then is this particular account not performing?
If you paid money into an account on May 18, 2009.  This is just September.  What is the meaning of not performing.   I think you, the media also published what the CBN gave you without cross checking.

CBN is the regulator in this industry and we expect that its figure should be accurate.
That is the issue, this people in CBN should know the details of all accounts. They should know the true position of our group and our deposits even in other banks, so why put my name. Just by pressing a button in CBN, they should know.

The strategy of the new CBN management be its own way of getting people to pay.
No! That is not how to get people to pay up.  On the contrary, you would make the banks to lose business.  We have as many as 210 accounts with the Oceanic bank in the group.  It I direct that all the accounts be closed, it will create problem eve for the CBN.

Every other day, about 210 of petrol stations pay money into Oceanic bank.  Imagine they lose that.  That won’t be nice.
Look there is nothing wrong in borrowing money to do business.  I have always told you whenever you bombard with me with question  that these billionaires are debtors.  I have always been saying it.

But I do not expect that everyone should be treated this way.Don’t you think what has happened was due to communications gap?
But Sanusi should have clarified  from the bank.  Oceanic Bank has not failed.  It is still in business.  If a bank has failed then you would say debtors should go to the NDIC (Nigeria Deposit Insurance Corporation)which would recover the debts.

But that is not the case.
All he needed to do was, since he has put his own man there, he could have asked the MD to publish the names on their own.  It would have taken a lot of stress from you.  Nobody will quarrel with that but if on your own you publish that I owe N14 billion when in actual fact I owe N8 billion, you have doubled the figure for me.  That is not fair.

How much was the original facility?
I don’t know because we have almost N 100 billion turn over in that bank every other two years. So we do a big turn over in the bank. So you see, it is a large account.  As far as I am concerned, I want to continue to do my business.  I want to continue to give job to Nigerians.  We have about 15,000 in our employment.  So it is not a small organization.  Our salary here is more than N500 million per for the entire conglomerate, that is about N 6 billion a year, so what is N8 billion to us. Besides the error in figure that you claim, how would you react to the entire strategy of publishing the names of debtors, given that it is common knowledge that many of these n\borrowers have refused to re-pay their loans.

Sanusi would have been commended for doing a wonderful job only if he makes sure that what he was doing is in accordance with his conscience and is accurate.  How do you explain it when you are not accurate with the figure?  I am sure that I am not the only person in this circumstance.  If two or three people and contest the figures then it discredits the system.

We believe that the CBN did not just cook_up the figures.
If the figure was obtained from Oceanic Bank and the same bank has given me a letter detailing the position of the accounts, then should the CBN go and publish without ascertaining the figure?  It was what the banks submitted in their returns that the CBN went to publish without knowing that the banks have different agreements with their customers.  That is what Sanusi is talking about_ full disclosure.  His argument would have been sound if only it is backed up with data from the affected customer.

Are you saying that CBN action was hasty?
What the CBN should have done was to hold meetings with the 10 highest figures in each bank and then publish.  Why were they so much in a hurry.  You see, these debtors are also the largest depositors of cash in the banks.  There was no need to be in a hurry.  What are you in a hurry about.  Nobody is going to run away from Nigeria.

One of them was trying to run away
Do you mean the MDs? Well, I don’t know what the MDs of banks are afraid of.  If you have not done anything wrong, confront Sanusi with the facts_ that I have not done anything wrong, so you can’t do this to me.

We have had this type problem in the banking sector before when the then military government had to establish Tribunals that tried, confiscated assets of debtors and jailed many of them. What do you think of such an option?

I don’t think so.  One thing I know is that it is not possible for a bank to give you loan without collateral.  And if a bank is going to expose to you up this amount, you can tell what the securities are.  I can tell what my securities are. And actually a lot.  For instance we have 480 million units of oceanic Bank shares.  If you put that N 7 per share and you multiply  it plus our deposits, you will see that we don’t owe anybody.

Have you CBN to complain and then ask for a retraction?
I don’t need to write the CBN because I don’t have a contractual agreement with the CBN. I don’t bank with CBN and I didn’t borrow from the CBN.  They are not my regulator.  They are regulating the bank so they should collect their information from the bank.
Not withstanding, do you still support the whole effort?

Well I cannot support it now
with what is happening to me, with the way am seeing the something its not common to say, initially I had wanted to say yes, I have my full backing as to people I give interview, if I wake up and the figures are not accurate what legitimacy do I have to say that am supporting.

Sir if it had been  published that you were owing 6 billion instead of 8, would you called us?
Does it make sense for anybody to be running around the typist in CBN to remove one outside his figure just because you want to look good, you know if the figures are not correct, its killing its credibility. This would have been the first time that everybody especially those of us who are paying the low bank would have been celebrating. But when somebody just give you because you don’t even owe, how do you want to celebrate that which is not right.

We keep paying all these dept, remember an editorial that was done on me by either Tell or the News, you will see all our letters of discharge, they were published even the one that Nation did, we published all the letters of discharge from FCMB, Sky bank and other places. So when we keep paying all this banks I don’t see the reason why someone will just wake up and say we are not paying it and this is were I have my own grudge.

They have no reason not to pay and if they don’t there are many ways of collecting the money from them which is through the enforcement of the law. You know you can forfeit all the securities.  The issue is that the banks must be able to make sure that those loans are adequately secured because if they are not secured then there is nothing to fall back on.

Let me tell you, there is nobody that you can sentence to jail because he is owing money because he is going to tell the court ‘I don’t have the money to pay’, so what the schedule of payment of the fund and he will give it to the court and then the court would adopt it or say ok, I convict you to 6 months, have you ever seen in criminal code that failure to pay loan is felony its not a felony nor misdemeanours.

Can you jail somebody to 6
months imprisonment and then he will come back and give you 8 million the law too needs to be amended. The maximum time that you can give to a loan defaulter is 6 months imprisonment, imagine the defaulter took 100 billion from the bank and he just go in there for 6 months and come back then he stays back to enjoy himself.

That is why the bank must sit tight to make sure that with the loans they are given out that they have collateral then the job of CBN would have been easy, its just a matter of going to realise those assets.

Again don’t forget too that this time we have a global recession and in England today nobody will publish list of debtors , Bill Gates  is a debtor but no one published his name because this time you know there is a recession most of them would have lost their money in business, I will give you a typical example, somebody says he want to buy oil now, the price $ 60 per barrel after taking the international price, 60 dollars per barrel, you key in and ask for 2 consignments and you go to Intercontinental and they borrow you the money and then you bring the oil but as you are coming on the road, it turned to N5 per barrel, you are in trouble of  25 barrel that makes up that consignment, so that money is not as if you consumed it but it has gone so you have to find a way to pay it back to the bank.

The same with the day you buy it at 60 dollars and you come to Nigeria and it is 70 dollars you have made a profit of 10 dollars but its not everyday that you will make profit.  Sometimes you lose.


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