BY OKEY NDIRIBE & EMMAN OVUAKPORIE
THE House of Representatives Ad Hoc Committee which investigated the near collapse of the Nigerian capital market has indicted the Central Bank of Nigeria, CBN, for the nationalisation of three banks and called for a review of the transactions.
The committee further recommended the prosecution of former CBN Governor, Professor Charles Soludo for his involvement in the previous banks’ audit.
Other recommendation was that the suspended Director General of the Securities and Exchange Commission, SEC, Ms Arunma Oteh be sacked.
Chairman of the committee, Hon. Ibrahim Tukur El-Sudi submitted the report at the close of plenary, yesterday, almost seven months after it concluded its investigative inquiry into the near collapse of the Capital Market.
It was expressly stated in the report that the nationalisation of these banks and their subsequent change of names to Mainstreet Bank, Keystone Bank and Enterprise Bank respectively was a violation of the AMCON Act, NDIC Act and Section 44 of the 1999 Constitution. He said: “The process of transfer (of ownership) were fraught with potential forgery, unethical practices, abuse of office and various unacceptable bad corporate governance precedents.”
The report of the House of Representatives’ investigations into the capital market was tabled before the House, yesterday, with a recommendation that the three nationalized banks be returned to their owners and the full termination of the appointment of the suspended chairman of the Securities and Exchange Commission, SEC, Ms Arumah Oteh.
Oteh was cited for termination on the basis of not meeting the statutory qualification for appointment and incompetence in the management of the capital market.
The report which recommended the prosecution of the governor of the Central Bank of Nigeria, CBN, Mallam Laimdo Sanusi and his predecessor, Prof. Charles Soludo also called for sanctions on officials of some other regulatory institutions in the sector.
The report was articulated by the House Ad-Hoc Committee on the Capital Market led by Rep. Ibrahim Tukur El-Sudi. The ad-hoc committee initially led by Rep. Herman Hembe was dissolved following altercations between his ad-hoc committee and the suspended Chairman of the Securities and Exchange Commission, SEC, Ms. Arumah Oteh.
Details of the report obtained by Vanguard, yesterday, showed that the ad-hoc committee indicted the CBN, the Nigeria Deposit Insurance Corporation, NDIC, and the Asset Management Corporation of Nigeria, AMCON, over their roles in the nationalisation of Afribank, BankPHB and Spring Bank.
It was expressly stated in the report that the nationalisation of these banks and their subsequent change of names to Mainstreet Bank, Keystone Bank and Enterprise Bank respectively was a violation of the AMCON Act, NDIC Act and Section 44 of the 1999 Constitution. The report noted: “The process of transfer (of ownership) were fraught with potential forgery, unethical practices, abuse of office and various unacceptable bad corporate governance precedents.”
The report recommended that the transaction should be reviewed and investigations be carried out by the Economic and Financial Crimes Commission, EFCC, on the Managing Director of NDIC, Mr. Umaru Ibrahim; Managing Director of AMCON, Mr Mustafa Chike-Obi as well as the Governor of the Central Bank of Nigeria, Mallam Sanusi Lamido Sanusi to establish their levels of complicity in the deal.
Committee seeks prosecution of CAC boss, nationalized banks directors
The House of Representatives Committee also called for the prosecution of the Registrar-General of the Corporate Affairs Commission, Mr. Bello Mahmud, directors of the three nationalised banks, lawyers and all individuals involved in the registration of the nationalized banks.
According to the report, all those who were used or offered themselves to be used in the various misrepresentations leading to the corporate registration of the nationalised banks should be tracked and made to face the full wrath of the law, on”while all the faceless lawyers and directors of the three nationalised banks should be prosecuted.”
Charges Sanusi for contempt
The House Committee also charged Governor of the Central Bank of Nigeria, CBN, Mallam Sanusi Lamido, for contempt of the House of Representatives having refused to produce on demand, the Special Examination Report upon which the intervention in eight banks in August 2008 was based. It said: “That the CBN action in disbursing N620 billion bailout funds and other intervention funds afterwards did not follow the due process of the law and the Constitution as the source of funds and the appropriate authority did not approve.
Seeks probe of former Soludo, Imala, Lemo
The report also recommended that former CBN Governor, Prof Chukwuma Soludo; former Director Banking Supervision of the apex bank, Mr Ignatius Imala as well as Deputy Governor, Mr. Tunde Lemo who was also in charge of banking supervision be further investigated on account of their role in the banking sector crisis that led to the CBN intervention in eight banks in August 2009.
Committee calls for Oteh Sack
The House of Representatives Committee called for the immediate sack of Ms Arunma Oteh as Director-General of the Securities and Exchange Commission.
According to the Ad-Hoc Committee, her appointment should be terminated forthwith as it was in violation of Section. 3(2) and Section 38(1) and other sections of the Constitution. It said that she did not have 25 years experience in the Nigeria Capital Market as required.
The report said: “Oteh has shown incompetence in the management of the human and material resources at her disposal in SEC and displayed lack of transparency on the job.”
The Committee also faulted the engagement of Access Bank Staff by SEC on secondment to SEC, saying it was unethical and may erode investor confidence, saying, therefore, that the affected personnel should be disengaged immediately.
The committee also asked that SEC to withdraw its nominees in the Council of the Nigeria Stock Exchange as a way of further boosting investor confidence.