Quick Links
Download account opening forms Download NSE Price List Central Bank of Nigeria The Nigerian Stock Exchange Central Securities Clearing SystemSecurities and Exchange Commission
Adverts
News

EFCC places 'wanted' tag on ex-bank chiefs
August 24, 2009

 

    • Banks' stock crash, Investors lose N519b
    • Shareholders allege hidden plan by CBN

    IN defiance to a plea by the Nigerian Stock Exchange (NSE) and other regulators of the financial sector, investors at the weekend offloaded millions of shares of listed banks in the nation's capital market.

    The development came as the Economic and Financial Crimes Commission declared wanted the recently sacked Chief Executive Officer of Oceanic Bank Plc, Mrs. Cecilia Ibru and her Intercontinental Bank Plc counterpart, Dr Erastus Akingbola.

    Meanwhile, the Central Bank of Nigeria (CBN) is planning to sanction banks that failed to obtain credit report from at least two licensed credit bureaux prior to granting loans.

    The Director General/Chief Executive Officer of the NSE, Ndi Okereke-Onyiuke and other regulators of the financial sector had pleaded with the investors not to sell their shares in the banks following the crisis currently rocking the financial sector.

    Despite the injection of fresh funds into the affected banks and the attestation by the NSE that the action by the CBN was an indirect way of bailing out the nation's capital market, investors traded off banks' shares. The panic was prompted by the penultimate Friday's removal of the chief executive officers of five banks listed on the floor of the Nigerian Stock Exchange.

    Precisely, at the close of transactions on the floor of the Exchange last Friday, investors suffered a total loss of N519 billion as banks' stocks and other blue chip stocks suffered share price depreciations.

    Worst hit among the banks whose shares were traded last week were Access Bank Plc, UBA Plc and First City Monument Bank Plc, all of which accounted for 393 million shares, representing 50 per cent of the banking sub-sector's turnover volume for the week.

    With only six stocks enjoying share price appreciation out of over 200 listed companies, the market capitalization which closed the previous Friday at N5.55 trillion, closed lower at N5.037 trillion, representing a decline of N519 billion, while the All-share Index dropped by 2,263.89 points from 24,237.85 to 21,973.96 .

    Similarly, with the prolonged bearish trend occasioned by banks' stocks losses, the NSE Banking Index dropped by 14.1 per cent from 389.75 points to close at 334.90 points on Friday.

    The NSE, in a bid to forestall the dumping of the affected banks' shares, early last week placed full suspension on them for two weeks.

    The NSE had explained that the resolve to suspend the five banks was taken in collaboration with the CBN and the Security and Exchange Commission (SEC) to avoid indiscriminate pricing of the shares of the affected banks, and that the three regulators would meet at the end of the two weeks to review the situation and determine whether to continue with full or settle for technical suspension.

    At the close of transactions the penultimate Friday, the volume of traded equities in the banking sub-sector closed lower as investors staked a total of N1.42 billion on 184.3 million shares, 15.5 per cent lower than the preceding day's volume of 218.1 million shares valued at N1.64 billion.

    With the affected banks enjoying varying transactions from investors, their share prices suffered depreciations as they fell from the preceding day's share prices.

    For instance, Union Bank of Nigeria Plc lost 36 kobo to close at N12.60 per share followed by Intercontinental Bank Plc with 36 kobo loss to close at N6.93 per share, while Afribank Nigeria Plc shed 27 kobo to close at N5.22 per share.

    Similarly, Oceanic Bank Plc and FinBank Plc both lost 26 kobo and eight kobo to close at N4.94 and N1.55 in that order.

    Reacting to the development at the weekend, the Chief Executive Officer of Deep Trust and Investment Limited, Mr. Fafa Zibiri-Aliu alleged that the banks were reckless in giving out loans. He, however, advised the CBN to, at the end of its auditing on the rest of the banks, summon the managing directors of these banks for interrogation, instead of coming out in the open to make pronouncement.

    This, he said, would forestall further effect of the pronouncement on the stock market and the economy at large.

    The plan to sanction banks that failed to obtain credit report before granting loan was confirmed to The Guardian by a source in the apex bank at the weekend

    According to him, if these banks had obeyed the CBN's instruction on this matter, they would have realized early enough that they were being ravaged by a cabal.

    "Most of the times, the banks think the CBN is just issuing instruction for the sake of it, but from the July returns from the accredited credit bureaux in the country, it is now clear to us that, these banks did not obey the instruction," the source said.

    He equally revealed that when the August returns from the credit bureaux come to the apex bank, it would take a look at them, and enforce that particular section of the guidelines to the letter.

    According to a statement issued yesterday by the EFCC, Cecilia Ibru and Akingbola are wanted in connection with alleged fraudulent abuse of credit process, insider trading, capital market manipulation and money laundering running into billions of naira.

    Femi Babafemi, the spokesman of the anti-graft agency told The Guardian in an interview that "we are looking for the two former big wigs in the banking sector, Akingbola and Mrs. Ibru. People who have useful information on their whereabouts should call the EFCC."

    According to the statement, the Executive Chairman of the EFCC, Mrs. Farida Waziri, directed that the two former bank executives be declared wanted following their alleged failure to honour the commission's invitation.

    In a reaction to the crisis in the banking sector, former president of the Chartered Institute of Bankers of Nigeria (CIBN), Mazi Okechukwu Unegbu, at the weekend, indicted auditors of banks for allegedly performing below expectations.

    Also, President of Association of Senior Staff Association of Banks, Insurance and other Financial Institutions (ASSIBIFI), Sunday Salako, decried the action of security agents in breaking into Erastus Akingbola's office.

    "It's not the proper way to go about it. You've declared somebody wanted, the next thing is to follow the due process and rule of law. The way the security agencies are going about it, they are making people to believe that there is more to it than they are making us to believe.

    "These people are innocent until proved otherwise. Bad loans can only be proved to be anomalous until when proved through due process. People are already insinuating that a script is being played out the way the authorities are going about it. This is an era when the President, as claimed by him, should enforce the rule of law."

    Specifically, Unegbu, who spoke in an interview with The Guardian in Lagos said bank auditors usually decline to qualify account of banks because of alleged financial rewards.

    He alleged that some auditors are consultants to banks, adding that they would rather keep their contract than confront the bank management over its state of accounts.

    Unegbu said: "I have always had this problem with auditors of banks. I remember when I was the executive chairman of a bank, I had problem with the auditors terribly because there were things they did which they ought to have seen and advised thoroughly."

    Unegbu spoke as the Independent Shareholders Association of Nigeria (ISAN) described the ongoing efforts to sanitise the banking sector as "very suspicious."

    ISAN, explained in Lagos that while the CBN was in a hurry to "criminalise" those who borrowed money from banks, it was silent on the various government agencies that are also debtors to banks.

    Speaking through its national coordinator, Sir Sunny Nwosu, ISAN said some contractors borrowed money from the banks to execute government contract, adding that the government has not paid the contractors, a development that would make it difficult for contractors to pay their bankers.

    Making reference to the reported plans to open expression of interest for the five troubled banks, Nwosu said "the CBN has a hidden agenda. Why are they in a hurry? People have refuted claims made by the CBN in that publication. The unfolding drama will make people feel there is a hidden agenda."

    "Coming from a CBN boss who was an operator before becoming a regulator, people think he's getting at those who were in competition with him," Nwosu added.

    Meanwhile, the new substantive Managing Director and Chief Executive Officer of Intercontinental Bank, Mr. Lai Alabi is expected to assume duties soon, going by a message he sent to The Guardian from United States of America (USA).

    Mr. Joseph Olusola Ajewole has been holding fort in the bank as acting Managing Director since August 14, when CBN governor announced Alabi as successor to Dr. Erastus Akingbola.

    The whereabouts of Alabi came to the fore at the weekend when Ajewole was evasive as journalists confronted him on the issue, during his maiden chat with newsmen in Lagos.

    Speculations were rife that the former Wema Bank boss was either indisposed, had rejected the offer or awaiting clearance by security agencies, as his whereabouts became a puzzle, 10 days after he was supposed to have assumed duties.

    But in a text message to The Guardian yesterday, Alabi allayed fears over his health and disposition to the Intercontinental Bank's job offer.

    Related News
    counter easy hit