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Nigeria Freezes Accounts Of Sacked Bank Chiefs As Depositors Make Panic Withdrawals
The Nigerian anti-graft agency said Saturday it had frozen the accounts of the sacked directors of five ailing banks for running the institutions into insolvency.
“We have frozen the accounts of the former managing directors and executive directors of the five banks,” Economic and Financial Crimes Commission (EFCC) spokesman Femi Babafemi told our correspondent
He said the agency had also invited the auditors of the affected banks for questioning.
“The auditors have to tell us what they know about the financials of the banks. How they came about huge debts and non-performing loans without the auditors raising the alarm,” he said.
The heads of Afribank plc, Intercontinental Bank plc, Union Bank plc, Oceanic Bank plc and Finbank plc were removed on August 14 by the Central Bank of Nigeria governor, Sanusi Lamido Sanusi, for piling up billions of dollars in bad debts and inefficiency.
The CBN accused the banks’ management of granting loans to prominent Nigerian businessmen and companies without following best practice.
The total loan portfolio of these five banks came to N2,801.92 billion, according to CBN.
Margin loans amounted to N456.28 billion and exposure to oil and gas loans amounted to N487.02 billion while aggregate non-performing loans stood at N1,143 billion, it said.
The EFCC has given the debtors one week to pay up or face arrest and prosecution.
Meanwhile, panic withdrawals by depositors and a thick cloud of uncertainty are shaking Nigeria’s financial sector after the sacking of the directors of five key ailing banks, operators and analysts said.
Central Bank of Nigeria (CBN) governor Sanusi Lamido Sanusi earlier this month removed the heads of Afribank, Intercontinental Bank, Union Bank, Oceanic Bank and Finbank for piling up billions of dollars in bad debts.
The books of about a dozen other banks are also currently under CBN scrutiny to determine their viability, debts and liquidity status.
“There are apprehensions in the industry on what will be the fate of the remaining banks because of CBN’s action,” a treasury manager in one of the nation’s banks, Sunday Adeola, told our correspondent.
The dismissals of the bank chiefs and the anti-graft agency’s threat to arrest, prosecute or seize property of the debtors of the banks if they failed to pay in a week has put the heat on the sector, analysts said.
“The… system has witnessed massive cash outflows in recent days. Depositors are jittery and they are withdrawing their money,” said analyst Joel Allison.
“Bank vaults are becoming empty and if the trend continues we may have another bank failure on our hands,” he said, recalling the liquidation of dozens of distressed banks in the 1990s after bad management and fraud.
Dozens of the owners and managers of those failed banks were prosecuted or jailed while others fled the country to evade arrest.
The CBN chief earlier this month accused the management of the five ailing banks of giving loans to prominent Nigerian businessmen and companies without adhering to good corporate governance and risk management practices.
He put the total loan portfolio of the ailing banks at N2.8 trillion.
The CBN has also published a list of dozens of prominent Nigerians businessmen as debtors to these banks.
The list includes tycoon Aliko Dangote, rated by US Forbes magazine as one of the world’s richest Africans with a net worth of around $3.3 billion.
Dangote, 52, who is also the new president of the Nigeria Stock Exchange (NSE) has denied managing the oil and gas company listed as owing Intercontinental Bank more than eight billion naira.
The Nigerian government has in the past days tried to calm the nerves of agitated bank depositors by assuring them that their money is safe and that it will not allow the debt-ridden banks to sink.
The government has already announced a N400 billion naira bailout for the affected banks.
Nigeria’s central labour movement NLC lauded Sanusi’s action, and urged the CBN to restore public confidence in the industry.
Rasheed Yusuf of the Association of Stockbroking Houses of Nigeria also called for proper management of the situation “in a way that the market will not be jeopardised.”
The confusion in this important sector of the Nigerian economy is further exacerbated by the fact that three key players — Dangote, NSE director general, Ndi Okereke-Onyiuke and International Bank’s ex-boss, Erastus Akingbola were listed by the CBN as bank debtors.
Okereke-Onyiuke is also a director in Transnational Corp, a failing conglomerate, which the CBN says owes Union Bank about N31 billion.
Five years ago, in a bid to shore up the capital base of these financial institutions, the number of banks was cut from more than 90 to 25 solid ones.
The figure later dropped to 24 when two of the banks merged.
But that early caution appears to have dissolved in more recent times and the global economic crisis has made the credit crunch that much tougher.
Mindful of the 1990s banking crisis, weary Nigerians are being cautious.
“Yesterday I took all my money from my bank to avoid possible unpleasant consequences,” said Femi Afolabi, a Lagos hotelier, who lost almost three million naira in 1995 when his bank failed.
A bill to amend the Corrupt Practices and Other Related Offences Act 2000 has passed its second reading in the House of Representatives.
The bill, which mandates compulsory counselling and training for individuals convicted of corruption-related offences, was sponsored by Kayode Akiolu (APC-Lagos) during plenary on Wednesday.
Leading the debate, Mr Akiolu explained that the bill sought to amend Section 67 of the principal act, introducing new provisions that were not part of the original section.
“These additional provisions, found in subsections 2, 3, and 4 of the amendment bill, require judges and magistrates to not only impose imprisonment and/or fines on those convicted of corruption but also mandate a minimum four-week anti-corruption counselling and training.
“The counselling and training will be designed and delivered by the Anti-Corruption Academy of Nigeria (ACAN) and aims to address the psychological factors related to corrupt behaviour,” Mr Akiolu said.
Mr Akiolu emphasised that the training would help reform convicts by addressing their corrupt tendencies and could even transform them into advocates for anti-corruption efforts.
He added that this approach aligned with the reformative aspect of the criminal justice system, which focused on punishment and rehabilitation.
“As per subsection 4, the bill allows magistrates and judges to order convicts to cover the cost of their counselling and training, preventing additional financial burdens on the government,” the lawmaker noted.
Mr Akiolu further argued that if the bill is passed into law, it would strengthen the country’s fight against corruption.
Given the widespread negative impact of corruption, he urged the House to support the bill for the country’s benefit.
Following the debate, Speaker Tajudeen Abbas referred the bill to the relevant committee for further legislative consideration.
The Judiciary and the Media are key pillars of democracy, the Chief Justice of Nigeria (CJN), Justice Kudirat Kekere-Ekun, has said.
Kekere-Ekun made this statement in her address at the 2024 National Conference of the National Association of Judiciary Correspondents (NAJUC).
The CJN was represented by Mr Abdulaziz Olumo, the Secretary of the National Judicial Institute (NJI).
“ The judiciary and the media occupy unique and complementary roles in any democratic society.
“ The judiciary serves as the guardian of justice, equity, and the rule of law, the media acts as the conscience of society, disseminating information, shaping public opinion, and ensuring accountability.
“ Together, these institutions provide checks and balances that strengthen the fabric of democracy,” she said.
Quoting Felix Frankfurter, a former U.S. Supreme Court Justice, she said: free press is not to be preferred to an independent judiciary, nor an independent judiciary to a free press. Neither has primacy over the other; both are indispensable to a free society.”
The CJN said this dynamic interdependence between the judiciary and the media presents opportunities and challenges alike.
“ The media is entrusted with the responsibility of informing the public about judicial activities, the judiciary relies on accurate and ethical reportage to enhance public confidence in its work.
“ However, the inherent power of the media to influence public opinion requires careful management, especially when its focus turns to judicial proceedings.
“ The question posed by Robert J.Cordy, a former Associate Justice of the Massachusetts Supreme Judicial Court, is pertinent here: “What happens when the free press turns its sights on the courts-scrutinizing, sensationalizing, and exposing the frailties of the judiciary while questioning its ethical standards and performance?”
“The media’s capacity to shape narratives and perceptions is undeniable” she said.
Quoting Jim Morrison , she said “Whoever controls the media controls the mind.”
According to her, this underscores the immense responsibility placed on journalists to report truthfully, fairly, and objectively.
“ Unfortunately, the commercialisation of news and external influences have led to the rise of sensationalism-a practice that distorts facts, erodes trust, and undermines the very essence of journalism.
“ Sensationalised headlines, such as the infamous 2016 headline “We raided the houses of ‘corrupt, unholy’ judges, says DSS,” can paint a skewed picture of the judiciary and its officers. Such reporting, often devoid of context, compromises the integrity of the justice system and misleads the public.
“ Closely tied to this is the issue of “trial by media,” where premature and often biased media narratives prejudge cases and infringe on the constitutional rights of individuals” she said.
She added that as Mahatma Gandhi rightly observed, “The sole aim of journalism should be service.” It is imperative for media practitioners to remain steadfast in their commitment to truth and objectivity.
To this end, she advised, the National Association of Judiciary Correspondents to take proactive steps to regulate the activities of its members.
“ This is not merely about enforcing rules but about fostering professionalism and safeguarding the credibility of the media.
“ The judiciary and the media must work as partners in progress.
“ To bridge the gap between these institutions, there is a pressing need for constructive engagement and mutual understanding.
“ Courts can provide the media with guidelines on judicial processes, courtroom decorum, and the nuances of court proceedings.
She noted that globally, courts have adopted initiatives to support the media’s role in reporting judicial matters.
For instance, she said the Supreme Court of Dakota’s media guide outlines protocols for courtroom reporting, while the UK ‘s Media Guidance document provides clarity on access and etiquette for journalists.
“ These examples demonstrate how structured collaboration can enhance the quality of judicial reportage.
“ In Nigeria, we can take a cue from these models by developing a comprehensive media guide tailored to our judicial landscape.
“ This initiative, which would involve inputs from NAJUC and judicial stakeholders, would not only enhance media access to courtrooms but also ensure that judicial activities are accurately and responsibly reported” she said.
She advocated that judiciary correspondents must make deliberate efforts to familiarise themselves with the rules and procedures of the courts.
She added that understanding these frameworks will enable journalists to navigate the complexities of judicial proceedings effectively and responsibly.
“ Training programs such as this conference play a crucial role in equipping judiciary correspondents with the knowledge and skills needed to report judicial matters accurately.
“ The theme of this year’s conference, “The Role of Courts in Enforcement of Judgments,” is both timely and significant, as it addresses an aspect of judicial work that is critical to upholding the rule of law and ensuring justice.
“ I commend NAJUC for its commitment to promoting accountability and transparency through its engagements with the judiciary.
“ As I conclude, I must emphasize the importance of credible journalism in strengthening public trust in the judiciary” she said.
She urged judiciary correspondents to prioritise the pursuit of truth and objectivity, resist undue influences, and remain steadfast in their commitment to ethical standards.
She commended the leadership of NAJUC, under the chairmanship of Mr Kayode Lawal, for its efforts in promoting professionalism among judiciary correspondents.
The Senate has issued an arrest warrant for the Managing Director of Julius Berger Nigeria Plc, Dr Peer Lubasch, to appear before its Committee on Works.
The Tide’s source reports that the warrant was for Lubasch to explain the utilisation of funds appropriated for the reconstruction work on Calabar-Odukpani-Itu highway.
The warrant followed the adoption of a motion sponsored by Sen. Osita Ngwu (PDP- Enugu) and co-sponsored by Sen. Asuquo Ekpenyong (APC-Cross River) and Sen. Mpigi Barinada (PDP- Rivers) at plenary in Abuja, yesterday.
Ngwu, in the motion said, that the senate had mandated the committee on works to conduct investigation into the state of road infrastructure across the country.
He said that in furtherance to the investigative hearings, Julius Berger refused to honour invitations to provide details of its role in the Calabar-Odukpani-Itu highway project, in spite of receiving substantial public funds.
He said that this was worrisome, given the alarming discrepancies in performance among contractors on the project, with specific reference to Julius Berger for failing to meet delivery timelines.
Ngwu said it was the constitutional powers of the National Assembly under Sections 8 and 89 of the 1999 Constitution, as amended, to conduct investigations on any person or organisation responsible for administering public funds.
He said that the powers set out in section 6 of the legislative powers and privileges act empowered the Senate to issue warrants of arrest on persons in contempt of its proceedings.
The Tide source reports that the senate further ruled that President of the Senate, Godswill Akpabio, should sign the warrant, mandating the Julius Berger managing director to appear on a date to be communicated.
Akpabio said that the senate’s decision was in line with its constitutional powers under Section 89 of the 1999 Constitution (as amended).
“This senate will not tolerate the continued disregard of its authority.
“The managing director of Julius Berger must appear before the relevant committee, failing which further actions will be taken as prescribed by the constitution.
“The point of order, which was supported by the majority of the senators, highlighted the importance of upholding the integrity of the legislature.
“The senate committee will submit its findings to the National Assembly after the MD’s appearance.
“If there is any further failure to comply, we shall take the necessary steps to ensure respect for the constitution and the rule of law,” Akpabio said.