By Peter Egwuatu

Shareholders have criticised the action of the CBN in nationalising the three troubled banks before the 30th September deadline given to them to recapitalise, insisting that the CBN appointed Chief Executive Officers (CEOs) of the affected banks be probed as they deliberately delayed their acquisition  for personal gains.

The shareholders also tasked the court to be alive to its responsibility to deliver quick and fair judgement on the issue of CBN’s intervention in these banks in order to safeguard the poor minority shareholders who staked their little savings in the affected institutions, even as they threatened further court actions against the CBN following the nationalisation of the banks

The shareholders also sought further trimming of the banks from 24 to 12, stressing that the CBN lacks manpower to regulate the banks.

Speaking to Vanguard, Dr Farouk Umar, Chairman of Advancement for Rights of Nigerian Shareholders said, “The nationalisation of the three banks came almost too late as the loss to the banks was increasing on daily basis on the stock market. Some of the management teams appointed by the CBN were deliberately delaying the acquisition of these banks because of their personal gains.

The CBN must probe the activities of the management of the three banks if it is serious in reforming the banking sector. Meanwhile, the nationalisation rather than liquidation has given the public more confidence in depositing money in the banks as government has protected depositors through this approach.

Faruk said the CBN must now focus on reducing the number of banks in the country to about twelve in order to avoid a repeat of what happened in the past. Both NDIC and the CBN do not appear to have the resources to effectively regulate twenty four banks.”

In his own reaction, National Chairman, Progressive Shareholders of Nigeria (PSAN), Mr Boniface Okezie said, the recent action of the CBN has vindicated both Vanguard and shareholders that Sanusi reform agenda was for private purpose.

According to him, “We had made it clear that the Sanusi led CBN was to accomplish the objectives of those who lost out during the banking consolidation carried out by erstwhile CBN Governor, Soludo. If he is sincere with its reform why it is that due process was not followed.

The judges in our courts should wake up and be able to deliver fair judgment without fear or favour. The court is our last hope as we are begging the court to dispense justice as quickly as possible because we shall not fail to advance our case to the courts on the recent nationalisation of these banks since due process was not followed.

Also, for CBN to liquidate these banks the court should have been involved. The court is the last hope for the common people even though that Sanusi has been altering that he has the power to do what he has been doing.

The CEOs of the affected banks should be probed by the federal government because they were supposed to resuscitate these banks if truly they were insolvent.

Since they were appointed by the CBN to revive the banks they started leaving flamboyant lives, driving flashing cars and living ostentatious lives at the expense of the owners and depositors of these banks.

For instance, Afribank Plc, it borrowed about N128 billion from inter bank, made N12billion loss and neither earnings nor profit were realised since he assumed office. So where is the expertise they brought to beer, instead they squandered what the AMCON gave them. So the managers of these banks must be brought to book.”

Speaking as well, National Secretary, Independent Shareholders Association of Nigeria (ISAN) said, “President Jonathan should declare an emergency in the nation’s Banking Industry to avert dare consequences on Nigeria’s economic and financial status.”

According to him “The revocation of the operating licenses of three commercial banks, namely Afribank Plc, BankPHB Plc and Spring Bank Plc remains a calculated subversion of the nation’s economy and the great people of Nigeria.  Already, we have started seeing massive losses on the stock market.

Investors are dumping shares massively due to loss of confidence. ISAN strongly feels that the revocation of banking licenses remains an open gridlock that in the medium term erode the transformation agenda of the administration of President Goodluck Jonathan,

The hurried revocation of the banks operating licenses remains a calculated plot to forcefully beat the new Minister of Finance into a subsisting and obnoxious agenda in the banking industry.

Revocation of the operating licenses also remains an affront on the nation’s Judiciary, as there are substantive cases over the banks in question in competent law courts.

The CBN resort to recapitalisation through Bridge Banks remains an attestation of failure or inept leadership by the current management of the apex bank toward finding a permanent answer to the nation’s induced banking problems.”

He revealed that ISAN believed that the revocation of the operating licenses of the banks will further deepen the crisis of confidence in the domestic financial sector, particularly the banking and the capital market.

The Association also stated that CBN’s revocation approach to the nation’s self-induced banking distress would further impoverished the citizens and Nigerians ability to create wealth through long term savings window of the capital market.”

In his reaction, President of Nigerian Shareholders Solidarity Association (NSSA), Chief Timothy Adesiyan said, “  Though the action of the CBN is erratic we had appealed to some shareholders to withdraw the court cases and let see what the CBN is up to in terms of recapitalising the banks.

Now that it has taken away the banks and given them to NDIC, we appeal that shareholders interest be protected along that of depositors. We are still watching because it is only the left over that will be given to us if the banks are liquidated.”

Meanwhile, in its reaction, Afrinvest  has stated  that “While the details behind this decision by the CBN are yet to be made completely clear, we are surprised by the decision of the regulator to “liquidate” these banks given that the September deadline for their recapitalisation is still some 55 days ahead.

We expect the action of the CBN to cause a stir in the Nigerian banking system and indeed the economy as the probability of a run on those banks is very much likely in the coming week. These banks together account for 5.8% of the Nigerian Banking Industry by total assets and 7.9% of industry total deposits.

Unless the CBN can clearly justify this rather hasty decision, the action of the regulator could potentially raise questions regarding the objectivity and timely execution of the reform process initiated in 2009.