Lamido Sanusi, Governor of the Central Bank of Nigeria (CBN)

Some of Nigeria’s rich and powerful, long accustomed to a lifestyle of yachts, fancy cars, and businesses fueled by unchecked credit lines, have been put on notice.

The Central Bank of Nigeria (CBN) on Wednesday made the unprecedented move of publishing a list of what it says are the major debtors to five banks rescued in a $2.6 billion bailout, among them some of the wealthiest and most powerful people in Nigeria. Hours later, the country’s top anti-corruption unit, the Economic and Financial Crimes Commission, said the debtors had one week to repay their loans or risk arrest and seizure of their assets.

The list of more than 200 companies, individuals, and government bodies includes Nigerian billionaires; Nigerian Stock Exchange officials; energy and hospitality conglomerate Transnational Corporation of Nigeria PLC (Transcorp); the former governor of Nigeria’s richest state; and the Ministry of Finance.

“It has become necessary to use this medium to request the following defaulting customers of the affected banks to pay without further delay their indebtedness, failing which the banks will take all appropriate legal actions to ensure repayment,” the CBN said in a statement on its web site.

“They have just one week to bring in their checks or drafts to us or we begin their arrest and prosecution as well as confiscation of their assets because they are people of enormous means,” EFCC Head Farida Waziri said in a statement.

Among those on the central bank’s list of debtors to bailed-out banks are some of the nation’s wealthiest businessmen, including Aliko Dangote and Femi Otedola.

The moves of newly appointed Central Bank of Nigeria Governor Lamido Sanusi have surprised many in Nigeria, Africa’s most populous nation, and are seen as sending a message to Nigeria’s fast-living business elite. “It sends a signal that a phase of doing things a certain way is over,” Olawale Edun, Chairman of financial services group Chapel Hill Denham, said in Lagos.

The Central Bank of Nigeria (CBN) recently injected $2.6 billion into Afribank Nigeria PLC, FinBank, Intercontinental Bank, Oceanic Bank International (Nigeria) Ltd., and Union Bank of Nigeria after they had accumulated $7.6 billion in bad debts, which the CBN said threatened the survival of Africa’s second-biggest economy.

For years, Nigerian banks and those they lent to have operated with little oversight. Several debtors named Wednesday appeared on more than one bank’s list, pointing up the lack of a credit-rating agency. Lamido Sanusi, a former banker (and the former MD/CED of First Bank of Nigeria), took office in June pledging to crack down on banks with poor lending records.

The CBN fired the top executives of the five bailed-out banks. Executives from four of the five have been questioned by the EFCC, and managers at the five banks have been put on a watch list to prevent them from leaving the country, the EFCC said.

Lawyers representing the ousted managing director of Intercontinental Bank, Erastus Akingbola, on Tuesday filed an injunction against his ouster with the Lagos Supreme Court. A senior government official said Tuesday that he hadn’t yet been questioned and was out of the country.

None of the five bailed-out banks could be reached to comment.

The top overall debtor named on the CBN’s list was Ascot Offshore Nigeria Ltd., an oil services company that bought out U.S. company Willbros Group Inc. in 2007. The CBN said the company owed Intercontinental Bank N44.67 billion, or $284.3 million. The company couldn’t be reached to comment.

Also on the list of debtors was Aliko Dangote, considered one of Nigeria’s richest men, and President of the Dangote Group, which controls significant portions of the cement, sugar, flour, and rice industries in Nigeria. Earlier this month, he was elected President of the Nigerian Stock Exchange (NSE) by the exchange’s council.

The CBN cited what it says is a $50.5 million debt of Dansa Oil and Gas Ltd. to Intercontinental, and listed Mr. Dangote as a “director or shareholder.” A separate listing said Dangote Industries Ltd. owed just under $16 million to Oceanic Bank. “Aliko Dangote was never a director of Dansa Oil & Gas Ltd. That is actually a misnomer. He is not part of the management of Dansa,” a Dangote Group spokesman said. He added, “For the matter of the N2.2 billion owed to Oceanic Bank, this is true, but the matter is close to a resolution. They’re working out the final figures.”

Femi Otedola, Head of African Petroleum PLC and Zenon Petroleum & Gas Ltd. was also cited, for a debt the CBN says is $120 million. Femi Otedola could not be reached to comment.

The Transcorp conglomerate was named for a $41.1 million debt to Union Bank. The Head of the company, Ndi Okereke-Onyiuke, is also Executive Director of the Nigerian Stock Exchange (NSE). Officials from the Nigerian Stock Exchange declined to comment. Transcorp couldn’t be reached to comment.

Nigerian energy firm Oando PLC on Wednesday denied the CBN’s statement that it had a $47 million non-performing loan with Oceanic Bank.

Read more on Banking in Nigeria

Chapel Hill Denham | Intercontinental Bank | Union Bank | Oceanic Bank | First Inland Bank (FinBank) | Afribank | Central Bank of Nigeria (CBN)

Source(s): The Wall Street Journal