By Prince Osuagwu
Just about last week, the Central Bank of Nigeria, CBN, announced a sudden removal of fiveÂ Managing Directors of five top banks in Nigeria, creating a near quake in the banking sector. The banks affected included Intercontinental bank, Oceanic bank , Afribank Fin bank and Union Bank. This is even as the apex bank is threatening to visit more banks with the same action, should investigations conclude that they have participated in the type of dealings that saw to the fate of the already affected five banks.
The reason given by CBN to that effect, was that the affected banks granted loans that had either turned bad loans or fast turning into one, due to non servicing/ performance of such loans. Other technical matters according to CBN, obviously gave it the confidence that the action was in the right direction.
Incidentally, CBN, to justify its action, published the list of debtors and the extent of non performance of these debts, in the national dailies, giving the impression that its action was to salvage the economy from imminent collapse than to witch hunt any corporate entity.
In the list of debtors, two prominent ICT players, Omatek Ventures Limited and Mobitel Nigeria Limited, were also prominent and this sent shivers to the industry which constant rise and stability has seen Nigeriaâ€™s image heightened in the international community.
Omatek is a top player in the Information Technology sector, particularly in computer manufacturing business, while Mobitel is a frontline telecommunications player in Nigeria.
Meanwhile, the two companies have denied their involvement in any such loan and expressed dissatisfaction that they were linked to such an image damaging scenario playing out in the banking sector. According to Mobitel, it was shocking when it saw its name included in the in the list of non performing bank debtors.Â It says it does not owe any such debt anywhere.
The company says the only debt it incurred in Intercontinental Bank was cleared as far back as August 2008, adding that it was unfortunate if CBN could regard a company that paid its debt, a year ago, as a debtor.
A copy of the letter allegedly written by Intercontinental bank to Mobitel and made available to Hi-Tech, confirmed that the company was in the clear to any debt to the intercontinental bank. The letter dated Auguat 8, 2008 and signed by two Loan Recovery officials of the bank, Kehinde Okelade and Ifeanyi Onyimadu, read in part â€œ we acknowledge the receipt of your Skye bank draft for the sum of 1000,000,000.00 being the full and final settlement of your companyâ€™s outstanding indebtedness to the bank. Further to the above please find attached, 8 copies of the Deed of Release duly executed by the bank in line with the settlement arrangementâ€.
The letter further said that â€œin the meantime, we undertake to forward to you the duly executed termination of Appointment of Receiver/Manager as soon as we receive value to that draftâ€
Omatek also confided in Hi-Tech that though it had clean dealings with Afribank among other banks, in the country, it never collected any loan that could be regarded as non performing or bad loan. The company also expressed shock that CBN apparently did not crosscheck its facts before going public.
However, besides the two ICT players that have vehemently opposed their inclusion in the list and described it as a terrible mistake that could draw back developments in the ICT sector, other stakeholders are also expressing concerns that CBN may have injured the goose that lays the golden egg. Many of the people who spoke to Hi-Tech believed that the CBN
Donald Ebulite, a major computer merchant at the popular Ikeja computer market, said that it would be a big blow on ICT sector if the banks begin to cut down on loans for the ICT companies as they may likely do, due to this damaging scenario in the banking sector. He noted that going by the capital intensive nature of ICT, development of the sector could have a lull if the banks become less eager to co-operate in financing the sector businesses for fear of being hound down.
But another prominent ICT stakeholder, Engr. Titi Omo-Ettu sees it differently. According to Omo-Ettu, â€œI do not buy the suggestion that banks willÂ cut down on loans. Banks thrive on businesses coming round to take loans. What has happened is our attempt to make sure that people do things the right way. Banks granting loans will continueÂ to do even better when there is discipline in the marketplace. The fact that somebodyâ€™s name is mentioned on alist does not mean that the person is guilty of any offence until it is proved. Businesses must go to the bank to raise loans but such loans must be seen to be performing. So I do not see any problem for our industry in particular. In any case telecom is a serious business that its handlers do not have the luxury of being frivolousâ€.