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Bank Chiefs plea bargaining: Lawyers disagree

By Innocent Anaba & Abdulwahab Abdulah

When the Central Bank of Nigeria, CBN, announced the sack of chief executives and other top management of five banks on August 14, 2009, the financial sector was shaken to its root. The banks affected were Intercontinental Bank, Union Bank, Afri Bank, Oceanic Bank and Fin Bank.

Shortly after the announcement, the affected bank chiefs were invited by the Economic and Financial Crimes Commission, EFCC. All of them showed up, except Erastus Akingbola of the Intercontinental Bank Plc, who only turned up later after his return from London, this year.

Bartholomew Ebong,Okey Nwosu, Cecilia Ibru(convicted) and Sebastian Adigwe

The bank chief executives charged to court were Mrs. Cecilia Ibru, former Chief Executive Officer and Managing Director of Oceanic International Bank Plc, former Managing Directors of Bank PHB, Francis Atuche, Charles Ojo, Managing Director of Spring Bank Plc, Managing Director of Finbank Plc, Okey Nwosu, Managing Director and Chief Executive Officer of Afribank Plc, Sebastian Adigwe and Bartholomew Ebong, Managing Director of Union Bank of Nigeria Plc.

Sequel to the invitation, the bank chiefs and some of those that owed the listed banks were later charged to court. Sebastian Adigwe, the former MD of Afribank Plc, Mr Peter Ololo, said to be the highest debtor on the list of debtors released by the CBN, and his company, Falcom Securities Ltd, pleaded not guilty to the 36 count charge of granting loans facilities to Falcom Securities Ltd without adequate collateral, contrary to provisions of Failed Bank (Recovery of Debts) and Financial Malpractices in Bank Act, Cap F2 Laws of the Federation of Nigeria, 2004 and other offence, punishable under the same law.

Mr Bartholomew Ebong, the former MD of Union Bank, Henry Onyemem and Niyi Opeodu, were charged on a 28 count charge of reckless granting loan facilities without adequate collateral contrary to provisions of Failed Bank (Recovery of Debts) and Financial Malpractices in Bank Act, Cap F2 Laws of the Federation of Nigeria, 2004 and an offence punishable under the same law.

Nine non-executive directors and members of Board of Directors, Intercontinental Bank Plc, Dr. Raymond Obieri, Engr. Hynacinth Enuha, Christopher Alabi, Chief Samuel Adegbite, Alhaji Isyaku Umar, Mr. Bayo Dada and Elder Sanni Adams were arraigned on 18-count charge of colluding with the MD of Intercontinental Bank, to grant various facilities running into billion of naira to companies, which they were also directors, an offence contrary to the provisions of the Failed Bank (Recovery of Debts) and Financial Malpractices in Bank Act, Cap F2 Laws of the Federation of Nigeria, 2004 and punishable under the same law.

Erastus Akingbola

But early in the month, Cecilia Ibru was jailed six months and ordered to forfeit assets worth over N191billion, after she pleaded guilty to a three-count amended charge.

Following the plea bargaining, Vanguard and Human Rights sought the reaction of lawyers in the country. Speaking on the issue, an eminent lawyer, Prof Itsey Sagay, SAN, who commented on the recent judgment of the court and the trial of the bank executives, noted that the trial demonstrated that the anti graft agencies in the country are out to wage genuine war against those in high offices, unlike what was obtained before, where it was the lowly that face prosecution over corrupt practices.

He said, “the trial of the bank executives is very good; the trial is in line with the law. It shows that now, there is no high and mighty anymore. Previously, it is only the lowly that are susceptible to be punished for crimes. Now, the anti graft agencies are going for managing director of banks, member of the high level in the society, they are going for political parties, going for politicians and the rich, in terms of the anti crimes business, trying to arrest and prosecute them for crimes committed. So definitely, we are progressing in that regard.

“On issue of plea bargaining, there are things we have to look out for very carefully. I would not condemn plea bargaining, because, when you go into a trial, you would not know what the outcome of the trial would be. This is because, as prosecution, you have to prove your case beyond reasonable fact. You have to amass facts. You have to get evidence, you have to bring so many witnesses, and it can take long processes and can be expensive.

At times they (prosecution) may not achieve the standard of evidence and standard of prove which can lead to a conviction. “So, it may be wiser to go into plea bargaining for the accused person to accept guilt for a lesser offence and be sentence to a lesser period of time. But the major thing, that is the recovery of the public funds or the resources that the person misappropriated back into the purse of the state. That is the major things. While he or she will still be carrying the stigma of being convicted for an offence for a very long time, until there is a pardon.

If you look at it on the balance scale, plea bargaining is not something bad at all.” Mr Jiti Ogunye, a Lagos based legal lawyer, said, “the resolution of the trial of Mrs Cecilia Ibru or other bank chiefs now or near future on plea bargaining are not by themselves wrong. However, our studied observation is that the adoption of plea bargaining is not bringing out a just and equitable resolution of the trial against the accused in a way and manner in which Nigerian people can say justice has been done.

“On Ibru for instance, the charges that were leveled and the count after the amended charges did not reflect the real character of the offences alleged. Ibru was convicted on three-count. The totality of the offence was not that she stole any money, but not filing necessary papers before the CBN.

“It will not be out of place to say that Section 14(2) of the EFCC Act, supported and allowed the agency to compound offences, that is, allow plea bargaining against any suspect. That section allowing the EFCC to compound offences did not give the guideline, leaving the agency to exercise its discretion over the issue. The discretionary power, however, was not exercised with wisdom,” he said.

But Bamidele Aturu, a Lagos lawyer in his reaction, said “any plea bargaining that permits those convicted of financial crimes running into billions of naira to get a slap on the wrists is itself a crime. Negotiating with criminals is immoral.

If it must be allowed at all, the sentence should not be less than two years and these must be spent in prisons not five stars hospitals. A sick convict should serve his sentence after treatment. Financial crimes are the root cause of other crimes.”

Some of the amended charge on which Mrs Ibru was convicted, read, “that you, Cecilia Ibru, being the Chief Executive Office of Oceanic International Bank Plc, in May 2009, failed to take all possible measures to make sure that the balance account of the bank for 2009 reflect true and real view of the account of the bank and thereby committed an offence, contrary and punishable under the Bank and Other Financial Institutions Act, BOFIA.

* That you, Cecilia Ibru, being the Chief Executive Office of Oceanic International Bank Plc, in August 2007, issued $20billion draft, to Waves Project Limited, which is above your credit approval and thereby committed an offence, contrary and punishable under section 15(1)(B) of the Fail Bank Miscellaneous Offences Act, Laws of the Federation, 2004. The charge against Nwodu read, “that you Okey Nwosu(the former MD of Finbank Nigeria Plc) Dayo Famoroti, Danjuma Ocholi and Agnes Ebubedike between 2006 and 2007 at Lagos within the jurisdiction of this court were concerned in the purchase of 612,558,934 units in several transactions of Finbank Plc’s shares purchased in the name of Tyco Food Processors Ltd, Busch Machine & tools Ltd and Omdden Oil and Gas Nig. Ltd valued at N6.113bn, through integrated Trust & Investment Ltd, which purchases were likely to have the effect of raising the price of Finbank Plc’s shares at the stock market with intent to induce other persons to purchase the shares of Finbank Plc and you thereby committed an offence contrary to Section 82(1) of the Investments and Securities Act. Cap. 124, Laws of the Federation of Nigeria, 2004 and Punishable under Section 87 of the same act.

“That you Okey Nwosu(the former MD of Finbank Nigeria Plc) Dayo Famoroti, Danjuma Ocholi and Agnes Ebubedike between 2006 and 2007 at Lagos within the jurisdiction of this court were concerned in the purchase of 2,033,168,880 units in several transactions of Finbank Plc’s shares purchased in the name of Eureka Global Ventures Ltd, Coast Lake Nig. Ltd, Scannel Investments Ltd, Ferbond Real Estate Ltd, Tyco Food Processors Ltd, Busch Machine & Tools Ltd and Omdden Oil and Gas Nig. Ltd valued at N18.188bn, through Springboard Trust & Investment Ltd, which purchases were likely to have the effect of raising the price of Finbank Plc’s shares at the stock market with intent to induce other persons to purchase the shares of Finbank Plc and you thereby committed an offence contrary to Section 82(1) of the Investments and Securities Act Cap. 124, Laws of the Federation of Nigeria, 2004 and punishable under Section 87 of the same act. For Sebastian Adigwe, he was accused of recklessly approving and granting of credit
facilities in the total sum of N32 billion to five companies, Larix Company Limited, Suletical Nigeria Limited, Broworks Nigeria Limited and Alsmiths Nigeria Limited and Rehoboth Assets Limited without adequate security, contrary to the regulation of the bank.

Adigwe and those standing trial with him, were also alleged to have failed to take all reasonable steps to ensure that the book of account of the bank gave a true and fair view of the state of affairs of Afribank as required by section 24(1) and (2) of the Bank and other Financial Institution Act Cap. B3, laws of the Federation, 2004, with the regard to the classification of credit facilities granted by the bank, as commercial paper and hence off-balance sheet, thus understating the load portfolio of the bank.

They were also said to have failed to ensure the correctness of the quarterly returns submitted by Afribank to the CBN as specified by the apex bank in its directive pursuant to section 25 of the Bank and other Financial Institution Act Cap. B3, laws of the Federation, 2004.

All the offences, according to the EFCC are contrary and punishable under Sections 15, 16, 28 and 28 of the Failed Bank (Recovery of Debt) and Financial malpractices in Bank Act Cap. F2, laws of the Federation 2004.
For Akingbola, he was accused of creating a false and misleading appearance of active trading in the shares of Intercontinental Bank Plc on the Nigerian Stock Exchange by being connected with the utilization of an aggregate sum of N179.385bn of the bank’s funds for the purchase of Intercontinental Bank Plc’s shares, thereby committed an offence contrary to Section 105(1)(a) of the Investment and Securities Act 2007 and punishable under Section 115(a) of the same Act.

He is also said to have used same amount to engage in fictitious transactions in the shares of Intercontinental Bank for the purpose of inflating or otherwise maintaining the market price of Intercontinental Bank Plc shares on the Nigeria Stock Exchange.

Akingbola was said to have knowingly, recklessly, negligently, willfully approved or connected with the approval of a credit facility in the sum of N8bn to Soo-Kok Holding Limited without security, contrary to Intercontinental Bank Plc’s regulations and thereby committed an offence contrary to Section 15(1)(a)(ii) of the Failed Bank (Recovery of Debts) and Financial Malpractices in Banks Act, Cap F2, Laws of the Federation of Nigeria, 2004 and punishable under Section 16(1)(a) of the same Act. He was said to give out a credit facility of N8bn to Cinca Nigeria Limited, and other N8bn to Harmony Trust and Investment Limited, without the necessary security.


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