Special fraud police investigations into bank practices in Nigeria have uncovered evidence of widespread corruption and deception over loans. The probe comes in the wake of the country�s multi-billion dollar bank rescue, and could result in criminal charges against some of Nigeria�s most influential figures.
�What we are dealing with is very sensitive. We are dealing with people, debtors, and this is a very serious situation. It borders on economic sabotage of this country,� said Farida Waziri, chair of the investigating commission. The Economic and Financial Crimes Commission (EFCC) gave defaulting debtors until the end of Tuesday to come up with their payments, and those still owing could now have to give up assets or face arrest.
Five of the country�s banks in threat of collapse were bailed out by the Central Bank last week. Senior managers were fired and many are now in custody or on the run from authorities. The Central Bank has published a complete list of more than 200 companies, individual and state debtors and it is believed they collectively owe US$5 billion.
Prominent businessmen
Many individuals on the list are prominent Nigerian businessmen. The only two Nigerians to appear on the latest Forbes billionaires list, Aliko Dangote and Femi Otedola are both on the Central Bank list.
Dangote has denied holding non-performing loans. Yesterday, Nigerian anti-corruption police said they had so far recovered 25.57 billion naira (US$170 million) in bad loans owed to five banks bailed out this month and pledged to prosecute their chiefs �very soon�.
EFCC agents have been hunting defaulting debtors, including some of Nigeria�s most powerful tycoons, who the central bank says owe 747 billion naira (US$5 billion) in non-performing loans. An EFCC deadline to pay up or face arrest, prosecution and the possible seizure of assets expired on Tuesday.
�In line with my promise to go after debtors who failed to take advantage of the seven-day ultimatum ... our operatives have since commenced the arrest of defaulters and have made significant recoveries,� EFCC chairman Farida Waziri said.
She said 16 executives from the five banks were in EFCC custody, while 68 debtors were being interrogated. She said charges would be brought �very soon� against the bank chiefs, but gave no further details.
Erastus Akingbola, the former chief executive of Intercontinental Bank, is the only one of the five banks� former chief executives not to have been detained. Local newspaper reports have said he has left the country.
�He is the only one who has escaped justice so far, but we will bring him back through the interpol system,� Waziri said, adding that charges would be brought �very soon� against the bank chiefs, without giving further details.
The EFCC granted bail to two of the former bank chiefs � Sebastian Adigwe of Afribank and Okey Nwosu of Finbank � after they secured court orders. The anti-corruption agency said the case against the two suspects involved sums of more than 30 billion naira individually and set bail at one billion naira each.
The central bank injected US$2.6 billion into Afribank, Finbank, Intercontinental Bank, Oceanic Bank and Union Bank on August 14 and sacked their senior management, saying lax governance had left them so weakly capitalised that they posed a systemic risk.
The EFCC has so far recovered 8 billion naira owed to Oceanic Bank, 7.7 billion naira to Intercontinental, 7.6 billion naira to Afribank, 1.6 billion naira to Finbank and 659 million naira to Union Bank.
Waziri said EFCC investigators had divided the borrowers into two categories �those with legitimate business intentions who continued to service their loans, and those whose loans did not follow due process and are non-performing.
Analysts say criminal charges could be brought if bank executives are found to have falsified accounts or breached share price manipulation rules by setting up subsidiaries as vehicles to trade their own stock and push up the share price.
The EFCC has said some of the loans were sought using false names, disbursed without approval from the boards of the banks, and in some cases diverted to ventures other than those for which they had been sought. It has said some defaulters could be prosecuted as conspirators with the banking executives.
Source: Daily Nation
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