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Uproar Over List Of Banks' Debtors

Source: burningpot.com

By Martins Oloja, Abuja, Felix Kuye, Moses Ebosele, and Sulaimon Salau, Lagos

The crackdown on debtors, chieftains of the capital market and some sacked helmsmen of the five embattled banks garner momentum yesterday as the Security and Exchange Commission (SEC) and the Economic and Financial Crimes Commission (EFCC) rolled out tougher measures.

This came as individuals and corporate bodies listed as mega debtors by the Central Bank of Nigeria (CBN) published yesterday claimed that they were either servicing such credits or not indebted to the banks at all.

Notwithstanding their assertions, the EFCC has given them one week to clear their obligations with the Afribank Plc, FinBank Plc, Intercontinental Bank Plc, Oceanic Bank Plc, and Union Bank of Nigeria Plc.

SEC, which also went tough on its officials and members linked with the mess in the banking sector, queried the Director-General of the Nigerian Stock Exchange (NSE), Prof. Ndi Okereke-Onyuike over the appearance of the name of a company she chairs on the debtors' list.

At the expiration of the ultimatum, the EFCC threatens to arrest and prosecute such debtors. It said the property of such recalcitrant debtors would be confiscated.

The commission said the short notice was because the debtors are networth persons and companies.

In the steps seen as part of the renewed efforts to protect the integrity of the Nigerian capital market, the Board of SEC yesterday asked Okereke-Onyuike to explain within seven days the circumstances under which the company was listed by the apex bank among non-performing debtors.

At the end of its 43rd meeting held yesterday, the board also called for the immediate suspension of any of the affected executives of the five banks who are members of the Council of the NSE pending the conclusion of investigation of allegations against them by the Central Bank of Nigeria (CBN).

The board also noted the recent developments in the financial market and affirmed its support for the steps taken by the CBN in sanitising the banking system, adding it had mandated its management to intensify surveillance of the capital market and the operators.

In a statement yesterday, SEC's Head of Media, Mr. Lanre Oloyi, said to give the new management of the five banks time to settle down and appropriately brief the market, the commission confirms that it had directed the NSE to place the securities of the said banks on full suspension for two weeks.

Oloyi also said the commission has directed that no securities of a public quoted company should be placed on technical or any other form of suspension without prior approval of the Commission.

"Apart from the five banks whose suspension was recently approved by the commission, the NSE has been directed to forward to the commission, the list of all quoted companies currently on technical suspension, for its review.

"The board of the commission is very concerned about the allegations of alteration in the documentation relating to the underwriting commitment in the African Petroleum (AP) Plc public offer and has mandated management to expedite action on its investigations," Oloyi said.

The EFFC Chairman, Mrs. Farida Waziri, yesterday gave debtors of the five banks a week ultimatum to pay up their debts or face arrest, prosecution and seizure of their assets

Fielding questions from journalists at the Nigerian Bar Association (NBA) yearly conference holding in Lagos yesterday, Waziri said: "We already have the list of the five banks' debtors with us in the EFCC and they have just one week to bring in their cheques or drafts to us or we begin their arrest and prosecution as well as confiscation of their assets because they are people of enormous means."

She explained that the anti-graft agency went tough on them because of the urgent need to salvage the financial sector from collapse and also restore discipline in all stakeholders in the industry.

"What we are doing with the case of the sacked bank executives should be a strong signal to all the debtors no matter who they are, that we mean serious business on the recovery of these funds. We have been doing it quietly before now because we already made some recoveries but now it is time to go full-blown with them. No one is above the law and our law is no respecter of persons.

"I will advise the debtors, whose names had already been published by the CBN to take advantage of this ultimatum by issuing their cheques and drafts in the name of EFCC for proper and co-ordinated recovery after which we restitute by returning the funds to the appropriate banks," she added.

Waziri challenged members of the Bar, the Bench, the media and the general public on the need to come together to combat the evils of corruption, in the overall interest of the nation. She said that owing to the "pervasive and debilitating effect of corruption on national development," it was important for all stakeholders in the polity to work together to frontally attack all the evils of corruption.

Meanwhile, Okereke-Onyiuke has explained the circumstances leading to Transnational Corporation (Transcorp) Plc indebtedness to the banks.

She said the money was borrowed when Transcorp wanted to acquire 51 per cent stake in Nigerian Telecommunications (NITEL), adding that the firm had earlier raised N22 billion through its Initial Public Offering (IPO) from which it spent N19 billion to service part of the debt.

Transcorp, she said, was in the process of divesting its 51 per cent stake in NITEL, pointing out that when concluded the money raised would be used to clear the debt.

Okereke-Onyiuke also used the opportunity to explain that the figure owed the bank is "relatively high" as a result of "compound interest."

Explaining further, Okereke-Onyiuke, who is also the chairman of Transcorp, said: "I'm not owing any bank in my personal capacity."

Transcorp, according to the CBN owes Union Bank Plc N30.863 billion as at May 31, 2009.

Among those who reacted to the CBN publication yesterday were the Chairman of Obat Oil and Petroleum Company, Fredrick Akinruntan, businessman Jimoh Ibrahim and Rockson Engineering Company.

Akinruntan described the inclusion of his name in the debtors' list as embarrassing, claiming that the report did not reflect the reality on ground.

He was said to be owing Oceanic Bank N4.47 billion.

In a telephone interview with The Guardian yesterday, Akinruntan denied owing any unserviceable loan.

He said he collected N2.5 billion from the bank to develop a property in Abuja and has never defaulted on the terms he agreed with the bank. Akinruntan said the bank should speak up on his claim.

Also, Ibrahim, who is the Group Managing Director of Global Fleet Group, denied owing Oceanic Bank N14 billion. He threatened to sue the CBN for "lying about the amount" involved.

In a briefing in his office in Abuja yesterday, Ibrahim said: "My company did not owe Oceanic Bank N14. 7 billion. The CBN lied on the figure, a development that has affected the credibility of the CBN's regulatory function.

"Oceanic Bank, by a letter dated May 18, 2009, had put all the outstanding debts of all Global Fleet Group at N8 billion as the bank acknowledged receipt of N3 billion I paid in May this year. In the letter acknowledging the receipt, the bank had written that 'the total outstanding on your facilities will be N8 billion.'

He accused the apex bank of unfairness by describing the loan as "non-performing" even after paying N3 billion.

Ibrahim said that "the turnover on the account of Global Fleet Group since inception is over N100 billion and will need Oceanic Bank to do reconciliation and provide evidence of withdrawal to enable us pay.

"I am not out to frustrate Sanusi Lamido Sanusi. The only way CBN can get credibility in the whole exercise is to show that what he is doing is fair and just, accurate and of good conscience, otherwise, he will have to return the bank to the former management," he said.

"If CBN does not apologise for this inaccuracy or do a retraction, I will sue them for damages because I am doing my legitimate business, employing people, paying salaries and taxes and developing my dear country, Nigeria," he added

Similarly, the management of Rockson Engineering Company said yesterday that the funds it allegedly raised from Intercontinental Bank were meant for implementation of the power projects it is handling for the Federal Government, which has failed to release money for the plants.

The projects are the Alaoji (1072MW), Gbarain (225MW), Egbema (338MW) and Omoku (230MW) power stations.

Describing the step taken by the CBN as inaccurate and uncalled for, the Chairman of Rockson, Senator Aniete Okon, said the firm was indebted to Intercontinental Bank to the tune of N14.4 billion and not N36.9 billion as claimed by the apex bank.

His words: "Specifically, CBN claims that Rockson Engineering Limited is indebted to Intercontinental Bank Plc to the tune of N36, 989, 685, 692.84. For the avoidance of doubt, we like to state that our reconciled and mutually agreed commitment with Messrs Intercontinental Bank Plc is N14, 423, 291, 589.49.

"This exposure with Intercontinental Bank Plc derives directly from the provision of credit facilities to substantially fund the letters of credit for turbines and balance of plant equipment for the execution of Federal Government's NIPP comprising the construction of power stations at Alaoji Gbarain, Egbema and Omoku over which our invoices on certified stand at nearly $800 million."

Okon said this "misinformation" has begun to take its toll on the implementation of the power plants as some manufacturers abroad are concerned with the issue and reacting accordingly.

The firm's Managing Director, Mr. J.I. A. Arumemi-Ikhide, however, noted that the fund was collected with due regards to the standard procedure, having obtained the money through a letter of credit from the same CBN.

On classification of the status of the account with Intercontinental Bank as "non-performing," Arumemi-Ikhide said "this is very misleading" and therefore cautioned against actions that could erode confidence in the Nigerian economy. He alleged that the government has not paid the company any money for the project, which he said was now at 70 per cent completion.

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