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Bank crisis: EFCC mount pressure on detained directors to sign off their shares

by Business News Report

By Omoh Gabriel
Detained bank chiefs yesterday disclosed that the Economic and Financial Crime Commission operatives are asking each of them to sign off their shareholdings in the five trouble banks as a means of gaining their freedom and soft landing. The bank chiefs who disclosed the latest development to their counsel said “This is part of a plea-bargain deal put forward by the anti-graft commission to secure the co-operation of the directors towards paying off their alleged debt. They were asked to surrender their shares in writing as a means of paying off their alleged indebtedness on one hand and receiving a “soft landing” from the commission.
EFCC had placed difficult bail conditions on the bank directors making it impossible for them to get bail long after the court ruling. Intercontinental Bank in particular has had its executive and non executive directors held by the EFCC in place of its Managing Director Dr. Erastus Akingbola. According to a source close to the banks chiefs in the custody of the EFCC, all the directors of Intercontinental Bank both individually and collectively have rejected the plea-bargain arrangement and refused to surrender their shares due to the implications which they say surrendering the shares has severe implications, one of which is that it will expedite CBN’s move of selling the banks to new foreign or local investors.
Also since the shares would be transferred in bulk, and the directors own 51 per cent, efforts by other shareholders to protest the CBN plans to sell the Banks to pre-determined foreign banks backed by their Nigerian associates, would have been compromised and undermined.
This development confirm fears that the CBN and EFCC are on a mission to dispossess shareholders of the affected banks of their holdings in the banks with a view of selling them to their preferred investors. The CBN Governor has repeatedly said he was ready to sell the banks to new investors in order to recapitalise the banks. Sanusi was quoted by Reuters while speaking in London at the conference the CBN governor called to reassure counter-party banks and foreign investors about the bailout said that he would not “stand in the way of any foreign banks taking a 100 per cent stake in the five Nigerian institutions”. The CBN also said that the five banks will be run as going concerns until new investors can be found to recapitalise them.

The Central Bank two weeks ago injected N420 billion into five banks and sacked their senior management, saying lax governance had left them so weakly capitalised that they posed a systemic risk.
Sanusi’s bailout, just two months after he took office at the helm of the CBN, shocked corporate Nigeria and initially panicked financial markets, sending the naira currency lower and triggering a stock market sell-off. S&P cut Nigeria’s speculative sovereign long-term foreign currency credit rating one notch to B-plus from BB-minus last week, citing the costly bank bailout and falling oil revenues.
It will be recalled that on March 23 this year Vanguard reported that Anti consolidation forces have regrouped with the hope of dissembling the banks and forcing a take over of the top five banks in the country. The grand plan by the group is to cause panic and uncertainty in the industry and make the target banks look unsafe for depositors. Their aim, Vanguard gathered, is to cause loss of public confidence in the banking industry and compel the Federal Government to move in by injecting funds. Further, they ultimately plan to instigate government to take equity holdings in the targeted banks.

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