August 31, 2009

5 troubled banks to be run as going concern until... –CBN •As Intercontinental Banks directors petition EFCC


entral Bank of Nigeria (CBN) at the weekend told prospective investors in London that the five troubled banks will be run as a going concern until new investors can be found to recapitalise them.

While wooing investors at a parley with international banks, lenders and rating agencies, the CBN Governor, Mallam Sanusi Lamido Sanusi hinted that Nigeria was likely to see a robust non-oil economic growth of more than six per cent this year even after bailing out five banks earlier this month.

Sanusi assured prospective investors in the five banks that he would not stand in the way of any foreign banks taking a 100 per cent stake in the five Nigerian institutions, adding that the injection of N400 billion ($2.6 billion) into the banks and the sacking of their senior managers was because of laxed governance which made the five banks so weakly capitalised that they posed a systemic risk.
He noted that the banking sector is key to Nigeria’s economic prospects, saying that the private sector credit outstripped the entire spending of the country’s federal, state and local governments last year and this year banks are expected to provide much of the government’s estimated N1.6 trillion ($10.6 billion) borrowing needs.

The number one banker in Nigeria also said, in an agency report, that Nigeria’s consumer inflation dipped to 11.1 per cent year-on-year in July from 11.2 per cent the previous month. He said that he cut interest rates to 6 per cent from 8 per cent in July in his first monetary policy meeting as governor.

Amidst the outcry of the accumulation of more debts by Nigeria after the exit of Paris and London Clubs loans, Sanusi used the occasion to announce that the Federal Government has concluded plans to take another $2.8 billion Special Drawing Rights from the International Monetary Fund (IMF) as the country expects double digit growth between 2010 and 2011.

“We expect non-oil Gross Domestic Product(GDP) growth to be robust above 6 per cent in 2009. I have no doubts that by 2010-2011 we will be looking at double digit growth in Nigeria ... We were growing at 6 per cent without electricity, without peace in the Niger Delta. We are a country of 150 million people but with only 23 million bank accounts. So, there is a lot of room for growth,” he said.
Meanwhile, nine detained directors of the Intercontinental Bank Plc have petitioned the Economic and Financial Crimes Commission (EFCC) over their continued detention.

The petition dated August 28 and addressed to the chairman of the anti-graft agency, Mrs. Farida Waziri was also copied to the Attorney-General of the Federation and Minister of Justice, Mr. Mike Aondoakaa.
The detained directors include Dr. Raymond C. Obieri, Chief Samuel Igbayilola Adegbite, Mr. Chris A. Alabi, Dr (Mrs.) Toyin Phillips, Mr. Bayo Dada and Elder (Dr.) Sanni Adams. Others are Engineer Hynacinth U.F. Enuha, Alhaji Isyaku Umar and Mrs. Seinye O.B. Lulu-Briggs.
In the petition, the counsel to the detainees, Professor G.A. Olawoyin (SAN), called the attention of Waziri to the ruling of Justice R.I.B. Adebiyi of a Lagos High Court that ordered that all actions against the directors be suspended till the case was determined.

The court had last Thursday granted a leave to the directors to enforce their fundamental rights against EFCC. Justice Adebiyi held that the leave should operate as a stay of all actions that might infringe on the fundamental rights of the directors pending the hearing and determination of the proceedings.

“It is hereby ordered that the respondents admit the applicants to bail and release the applicants forthwith from detention upon the provision each of two sureties, either two sureties who shall be an individual employed in the civil service in Nigeria at a grade level not lower than level 14 or one civil servant and the second surety being an individual with landed property in Lagos,” Justice Adebiyi ordered.
The counsel to the detainees, Professor G.A. Olawoyin, appealed to Andoaka to use his good offices to ensure that EFCC complied with the court order.

The petition read in part: “We consider it imperative to draw your attention to the fact that in the case of our clients, there was a prior and subsisting court order in respect of the conditions of bail which by law supersedes your commission’s term of bail as stipulated during your press conference.
“In the premises, we therefore request that our clients be admitted to bail on terms as stipulated by a duly constituted court of law with jurisdiction to grant the orders. For the avoidance of any doubt on this pint, we draw your attention to Section 46 (1) of the Constitution of the Federal republic of Nigeria 1999 and Order 1 Rule 1 of the Fundamental Rights (Enforcement Procedure) Rules which states that ‘court’ means the Federal High Court or the High Court of a state.”

For the detainees to be admitted to bail, EFCC had sought for a deposit of a bank guarantee in the sum of N1 billion in favour of the commission, tax clearance certificate for the past three years and a serving Minister in the country who must provide a landed property in Victoria Island, Lagos or Ikoyi, Maitama or Asokoro in Abuja as surety in respect of each suspect.

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