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Yar’adua Asks EFCC To Recover Bad Loans

Source: burningpot.com

By Habeeb I. Pindiga & Boco Edet
President Umaru Yar'adua has instructed the Economic and Financial Crimes Commission (EFCC) and other law enforcement agencies to help recover bad loans given out by five banks rescued in an unprecedented N400 billion bailout last week. The president also said he was in full support of the measures taken by the Central Bank of Nigeria to prevent a distress in the banking industry.

The CBN last Friday injected N400 billion into the five ailing banks—Oceanic, Intercontinental, Finbank, Union and Afribank—and sacked their chief executives and top management in an effort to prevent a systemic banking crisis. It said the banks had accumulated loans amounting to trillions of naira, part of them non-performing loans, posing a risk to other operators in the industry.

“The President has directed all law enforcement agencies to give their fullest support to efforts by the new management teams of the five banks which have received bailout funds from the CBN to recover the huge loans, the non-servicing of which placed the banks at risk of distress,” a statement yesterday in Abuja by Presidential Spokesman Olusegun Adeniyi said.

The bailed out banks, according to CBN, account for 40 per cent of banking sector credit and the executives removed included members of the business aristocracy, long seen as almost untouchable.

The EFCC yesterday said it was ready to prosecute the five sacked bank executives. A senior official who did not want to be named said the commission had been investigating the five banks since March and that cases had been established against them.

“We put up surveillance around these banks and have been monitoring their activities,” the official said, but did not give a date for the commencement of court proceeding against the bank chiefs.

The sacked chief executives are Mr. Sebastian Adigwe (Afribank), Mr. Erastus Akingbola (Intercontinental Bank), Mr. Bartholomew Ebong (Union Bank), Mrs. Cecilia Ibru (Oceanic) and Mr. Okey Nwosu (Finbank).

The presidency statement also said, “President Umaru Musa Yar'adua fully endorses the measures announced by the Central Bank of Nigeria (CBN) at the weekend to sanitise Nigeria's banking sector and prevent fresh bank failures with their attendant negative effects on the national economy.

“President Yar'adua wishes to assure all Nigerians that their deposits in Nigerian banks are safe as the Federal Government will continue to act in concert with the CBN to ensure that no bank is allowed to fail or become distressed.

“The over N400 billion already injected into the five affected banks to ensure their continued viability affirms the Yar'adua Administration's commitment to taking all necessary action to ensure the stability and well-being of the country's financial sector.

“Along with stricter supervision and regulation by the CBN, the Administration will continue to do whatever is necessary to guarantee the safety of deposits in Nigerian banks and entrench best corporate practices and better credit administration processes in the management of banks.”

The president has also nominated Dr. Kingsley Chiedu Moghalu for confirmation by the Senate as a Deputy Governor of the CBN, in an effort Adeniyi said was to “strengthen the apex bank further for the effective and efficient performance of its supervisory and regulatory functions.”

Moghalu, 46, who holds a doctorate degree from the London School of Economics has many years of experience in corporate governance, risk management and strategy.

The statement said also that the president has approved the appointment of Mr. Stephen Oronsaye and Mr. Nebolisa Arah as members to the board of the CBN. Oronsaye who is currently the Head of the Civil Service of the Federation is to serve on the CBN board in his personal capacity and is to replace Prof. Akpan H. Ekpo (South-South Zone), while Arah who was the pioneer Managing Director of Fidelity Bank is to replace Mrs. Juliet Madubueze (South-East Zone).

The appointments of Mr. Samuel Olofin, Dahiru Muhammad and Joshua O. Omuya to the CBN board have also been renewed by the President, Adeniyi added. All the board appointments are subject to confirmation by the Senate.

“In further action to enhance the effectiveness of the CBN as an institution, President Yar'Adua has also approved the nomination of Dr. Adedoyin Salami, Mr. John Oshilaja, Prof. Chibuike Ugochukwu Uche, Dr. Shehu Yahaya and Mr. Abdul-Ganiyu Garba for confirmation by the Senate as members of the Bank's Monetary Policy Committee,” the statement said.

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