A CNN interview with Lamido Sanusi, Governor of the Central Bank of Nigeria (CBN), regarding his plans to clean up the Nigerian banking sector.
The Central Bank of Nigeria (CBN) last week rescued 5 banks: Intercontinental Bank, Union Bank, Oceanic Bank, First Inland Bank (FinBank), and Afribank. Additionally, the CBN fired the management of these banks, accusing the banks’ management of chronic mismanagement. Furthermore, Lamido Sanusi has threatened prosecution of the banks’ management if any unlawful activities are discovered.
View more Lamido Sanusi videos.
Intercontinental Bank | Union Bank | Oceanic Bank | First Inland Bank (FinBank) | Afribank | Central Bank of Nigeria (CBN)
Source(s): CNN
#1 by ast ana on August 22nd, 2009
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CBN ACTION AGAINST OCEANIC BANK IS A COUP D’ETAT
Although it is becoming increasingly easy for the Government and its agencies to buy the airwaves and the news media in Nigeria it cannot do the same for the minds of the people, particularly foreign investors who can clearly see that a coup d’etat in the Nigerian Banking industry, as unlawful and destructive as a political one, has just occurred in Nigeria.
Today in a progressive execution of a well laid out take over plan the CBN Governor declared his intention to invite expression of interest from “private sector operators” to take over the ownership of Oceanic bank and others that have been targeted.
An article written by Omoh Gabriel and Emeka Mamah as far back as 23rd March 2009 (a copy of which I attach hereto for your ease of reference) had predicted that some persons (referred to in that article as “ANTI-CONSOLIDATION forces”) were to install a new Central Bank Governor after Mr. Soludo with an agenda to enable them take over five of the nations top banks. One of the candidates named in that article for the job is the current CBN Governor. I commend that article for your reading and enlightenment.
Our clients are aware that many patriotic and well meaning Nigerians are completely aghast and scandalised by the precipitate and clearly unlawful actions of the CBN, the unjustified name calling and attempt to tarnish for selfish reasons the hard earned reputation of honest and hardworking people who have done nothing wrong except be efficient and creative at their jobs.
The clear attempt at whipping up public opinion against our clients through the bandying of all sorts of unconfirmed figures that are designed to confound and astound Nigerians that have been impoverished by inconsistent and selfish government policies like the current one have also been noted.
Our clients wish to make it clear to Nigerians that the banks are not the cause of poverty in Nigeria, it is irresponsive and irresponsible action by those entrusted with power in the well chronicled history of Nigeria that has always been the problem.
Contrary to the reactionary populist propaganda of the CBN, Oceanic bank has always been committed to Building A Stronger Nigeria under the management headed by Dr. Cecelia Ibru. Below are some of the vital infrastructural developments that have only been possible because of the patriotism of Oceanic bank :
1. From the days of GSM Oceanic bank ’s $20 million USD loan enabled Econet (today’s Zain) to win their GSM bid. Undoubtedly Zain is a conglomerate and thousands of Nigerians are in gainful employment with them thanks to this initial seed by Oceanic bank .
2. Oceanic bank funded the purchase of Unipetrol by Ocean and Oil (Oando). Today Oando is one of the most respected oil and gas conglomerates and is already prospecting oil in deep waters, again thanks to Oceanic bank
3. Murtala Mohammed Airport 2 (MM2 Airport) – this was a BOT (Build Operate Transfer) arrangement which no bank was willing to finance until Oceanic bank took it up, financed it and today that facility is a landmark on the BOT strategy of the nation and a reference point for all such projects, again thanks to Oceanic bank .
4. The Lagos central business district – roads rehabilitation by Lagos Government was funded and financed by Oceanic bank .
5. Badore road, Lagos – a new high class neighborhood was funded by Oceanic bank
6. Bar beach reclamation was funded by Oceanic bank
7. Oceanic bank provided 5 billion Naira guarantee to kick off the Lagos express way, without this guarantee the construction consortium would not commence work.
8. In respect of food security – Oceanic bank financed the purchase and rehabilitation of former NAFCOM now renamed NOTORE – a success story of BPE (bureau of public enterprise) privatization scheme. The company now produces urea and ammonia for agricultural fertilizer. This company, which until its privatization was alreadt run aground has now become easily the largest fertilizer plant in West Africa. The plant is worth over 100billion today.
9. Oceanic bank has supported religious pilgrimage and in this regard has partnered with the Nigeria pilgrimage board to organize hitch free pilgrimage
11. Oceanic bank has been involved in poverty alleviation. Oceanic bank is in the process OF putting structures in place in all the senatorial zones to provide advisory and logistics services to farmers in the North in regard to problems they encounter with planting, growing, harvesting and transporting crop to the market. 6 states had already signed on and many more had indicated interest before this disruption of our operations and vision by CBN.
12. Also in the North, plans are at an advanced stage to build the biggest economic city in Kano, to enlarge and reposition the famous singer market in Kano. Similarly the Kaduna model market is on the drawing board.
13. In respect of power – Oceanic bank had recently entered into agreement with a Chinese and Nigerian consortium to build power plants in Kaduna, Kano and three free trade zones.
14. Micro Finance – Oceanic bank has partnered with NAPEP in over 10 states to address the poverty issue. Also in Cross River state an initiative for women spearheaded by state first lady Mrs. Imoke for women farmers was launched a couple of months ago. It is a partnership between the cooperative of women farmers, Oceanic bank and CBN. All the women took loans from Oceanic bank with expectation that other cooperatives will follow suit on the success of this first initiative.
15. PSR – In terms of Personal Social Responsibility we are a member of UNEP United Nation Environmental Program and creating awareness for personal social responsibility that is encouraging and educating people on environmental preservation and protection.
16. CSR – Corporate Social Responsibility – youth empowerment – football talent hunt – thousand of youths participated and 30 who displayed exemplary talents were celebrated with gifts and scholarships to study in areas of their choice while being offered full time job at Oceanic bank . The second season is already on and very popular and one can only hope that this whole debacle will not affect its contribution to the growth and empowerment of our teeming youths.
17. Oceanic bank has also refurbished hostels for an all girls school in Jalingo, Taraba State where we have furnished classrooms with desks, chairs etc to provide a conducive environment for education.
Similarly, in kebbi State Oceanic bank has provided desks and chairs for the whole primary school system where pupils were previously sitting on the floor to study.
19. Oceanic bank has built a lecture hall for Nasarawa State university, built a girls hostel for Delta state university Abraka and classrooms for Cross-river state university
These are some of the projects that Oceanic bank originated, which contributed tremendously to the employment of millions of Nigerians in these areas of growth. The success story of all these projects is testimony of the great administrative acumen in the top management of the Oceanic bank . They deserve to be reinstated to address the issues if any that might arise while creating the tremendous capital and growth of our nation.
Oceanic bank from available records was already in the process of reinventing itself by working with the top consultants like McKenzie and Co and already deployed world recognized ERP – enterprise resource planning software tool to position itself for best business practices and global efficiency.
These are some of the strategies implemented to prepare the bank for sustainability and steady growth.
The recent CBN actions will have adverse effects on all these laudable projects as the international community has already responded by cancelling all international LC and trade lines.
We wish to emphasise that up till now our clients have not received any details from the CBN about the alleged findings of the none existent “special investigation” which pertain specifically to them and upon which basis they were unlawfully removed and their bank taken over.
These lapses are beginning to justify the view held by many people that this is but an execution of a clear design by certain persons through the instrumentation of the CBN to take over ownership of our clients’ bank.
We have petitioned the president hoping he can still terminate this ominous conspiracy against the development of the nations economy especially in view of his vision to transform the economy into one of the 20 largest ones by the year 2020, now just about 10 years off.
Our clients are giving the authorities a reasonable time to rectify the situation themselves in order to demonstrate their good faith.
The current action inspite of the heavy propaganda unleashed by the CBN has the potential to turn Nigeria into an economic pariah again just like military coup d’états have done in the past.
The style of undemocratic corporate governance and dictatorial tendencies exhibited in the current pogrom is already causing international finances to recede from Nigeria as the news media have confirmed. Many foreign banks witnessing this unwarranted and unjustifiable disruption of the operations of healthy institutions have already withdrawn to watch the outcome.
Contrary to the impression CBN is trying to create Oceanic bank is a conglomerate powerhouse set for global presence. Apart from its 350 branches in Nigeria, 7 branches in West Africa sub region and a representative office in China, Oceanic bank had just completed setting up its UK subsidiary which was set for operations. The current action of the CBN governor has truncated the approval by the British Financial Services Authority after the huge capital outlay by Oceanic bank in expectation of good value creation and profitability.
Oceanic bank was not in any danger of insolvency or failure at any stage and the figures, which the CBN refuses to publish, confirm this. We advise Nigerians not to be hoodwinked by the propaganda but to ask relevant questions before joining the bandwagon.
The overwhelming and unlawful use of law enforcement agencies to harass people who have done nothing illegitimate and to collect debts that cannot under any parameters known in the industry be classified as bad or non-performing is a throwback to military rule days and is certainly going to harm the industry in Nigeria.
Nigerian courts have already in many instances condemned the intervention of law enforcement agencies in legitimate contractual transactions between persons whose recourse in cases of disagreement is to civil courts and we urge the EFCC and others to refrain from acts that may appear politically expedient at the moment but on the long run will only jeopardise the economic growth of the country.
#2 by ast ana on August 22nd, 2009
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http://www.vanguardngr.com/content/category/1/14/40/
http://www.nairaland.com/nigeria/topic-312881.0.html
Here’s a news article from the Vanguard Newspaper published in March 2009, a few months before Sanusi became CBN Governor.
Nigeria: Group Plots Takeover of Five Top Banks
Omoh Gabriel and Emeka Mamah
23 March 2009
ANTI-CONSOLIDATION forces have regrouped with the hope of dismantling the structures and forcing a takeover of the top five banks in the country, Vanguard can now reveal.
The grand plan by the group is to cause panic and uncertainty in the industry and make the target banks look unsafe for depositors.
Meantime, indications emerged yesterday that the Federal Government may announce the names of a new Governor of the Central Bank (CBN) and the Auditor-General of the Federation (AGF) in April just a few weeks before the tenure of the incumbents run out.
However, the Arewa Consultative Forum (ACF) has expressed concern over what it described as the rapidly deteriorating liquidity situation in the banking industry and tasked the Central Bank (CBN) to make public information on causes of the development as well as the scale of the crisis.
Vanguard investigations revealed that the aim of the anti-consolidation forces 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.
Vanguard gathered that the group at work is made up of former bank owners who lost out during the consolidation exercise, a powerful clique in the present government, and some aggrieved persons in three of the six geopolitical zones in the country who felt left out in the consolidation exercise.
Presidency sources disclosed that those who felt left out in the consolidation exercise are up in arms to recoup what they felt they lost during Obasanjo years.
Part of the plans hatched by the group is to ensure that the incumbent Governor of the Central Bank, Professor Chukwuma Soludo, does not get a second term. The plan is also to ensure that whatever gains consolidation recorded are discredited. This, it was learnt, was meant to force the President to act quickly in the matter of appointment of a successor to Soludo as they anticipate that the president’s slow move may scuttle their dreams and cause the renewal of Soludo’s re-appointment for a second term.
The group’s second game plan is to make Nigerian banks look unsafe in the eye of the banking public. Part of the game is to spread rumours that some banks are unsound and are on the verge of collapse. They send out text messages to individuals and account holders passing wrong information on their target banks. At the moment, the group’s target is one of the high-flying new generation banks where they have sent out several messages.
New CBN Gov, Auditor-General to emerge April
The tenure of the CBN Governor, Professor Chukwuma Soludo and Auditor-General of the Federation, Mr. O. R. Ejenavi from Delta State will lapse in May 2009.
Naming nominees for the top jobs, according to a presidency source, will afford the Senate ample opportunity to work on them before they assume office.
While Soludo will complete his first term in office as CBN governor by May 29, Ejenavi will be due for retirement on age grounds on May 18.
However, among those being considered for the position of CBN governor include the Minister of National Planning, Dr Shamsuddeen Usman from Kano, who was a former Finance minister and deputy governor at the apex bank; another former CBN deputy governor, Obadiah Mailafia from Nassarawa, Mallam Isa Hayatudeen from Borno, a former managing director of FSB International Bank, incumbent Managing Director of First Bank, Mallam Sanusi Lamido Sanusi, also from Kano, and Mallam Falalu Bello from Kaduna, Managing Director, Unity Bank.
But the most touted name so far is that of Mallam Isa Yuguda, the Bauchi State governor who won election on the platform of the All Nigeria peoples Party, ANPP, but defected to the ruling PDP last week. Yuguda is also an in-law of President Umaru Yar’Adua. Yuguda was also a former Managing Director of Inland Bank, a legacy bank in post-consolidation FinBank.
Past CBN governors include late Dr. Clement Isong (Akwa-Ibom), Alhaji Adamu Ciroma (Yobe); Mr. Ola Vincent (Lagos), late Alhaji Abdulkadir Ahmed (Bauchi); Mr. Paul Ogwuma (Abia), Dr. Joseph Sanusi (Ondo) and the current Professor Charles Soludo (Anambra).
It was also gathered that strict obedience to civil service rules will be observed in the appointment of a new Auditor General for the Federation going by the constitutional provision.
Section 86 Subsection 1 of the 1999 constitution states: “the Auditor-General for the Federation shall be appointed by the President on the recommendation of the Federal Civil Service Commission, subject to the confirmation of the Senate.” That of the CBN may be determined by other factors, mostly political considerations which are at the pleasure of the President without recourse to the commission.
The most senior director in the office of the Auditor-General currently is Mr. Ogunsina G.F from Ekiti State who may be appointed unless there is political maneuvering. Having been a director since 2004, it may not be smooth sailing for Ogunsina because, there is another senior civil servant Mr. Osonuga T. A. from Ogun State who was promoted a director in 2007 and is being propelled by other forces to occupy the office.
It’s unfortunate top 5 banks are targeted, says official
A CBN official who spoke on condition of anonymity said that it is unfortunate that top five banks are the target. The banks, he said, are sound. The CBN had mistaken in the past the ongoing move as de-marketing by competitors in the banking industry, saying it is unhealthy competition.
The group is using this means to make depositors panic and undertake massive withdrawal of funds from the targeted banks in an attempt to cause liquidity problem in the bank. In that state they hope to cause a take over by the government which may buy a stake in the bank and later sell to members of the privileged group who may be appointed in the interim into the board of the banks.
Arewa worries over liquidity problem
However, the Arewa Consultative Forum (ACF) expressed concern over what it described as the rapidly deteriorating liquidity situation in the banking industry and tasked the Central Bank (CBN) to inform the people the cause of the development as well as the scale of the crisis.
ACF said that the commercial banks must have obviously lent too much money to people who either invested them in buying stocks or in the importation of petroleum products in the country, but are unable to repay such loans.
A statement signed by the National Publicity Secretary of the Forum, Mr. Anthony Sani however blamed the CBN for enquiring “into the volume of the so-called toxic assets of the commercial banks while refusing to tell Nigerians how or why in the first place, the banks found themselves in trouble.
The statement reads “The Working Committee of the National Executive Council of the Arewa Consultative
Forum (ACF) held its meeting at its national headquarters in Kaduna on Tuesday, the 17th of March 2009. In attendance were all National officers of the ACF drawn from the 19 northern states and the Federal Capital Territory (FCT). General IBM Haruna, the Chairman presided.
“Among other things, the meeting reviewed and discussed a number of issues and other troubling developments in the country. At the end, it resolved to issue the following statement.
“The ACF deliberated on the rapidly deteriorating liquidity situation in the banking industry and observed that Nigerians are feeling increasingly frustrated by the failure of the Central Bank of Nigeria (CBN) to disclose the true the true nature and the scale of the crisis.
“Even members of the National Assembly, despite their best efforts, have been unable to get to the truth of the matter.
According to Arewa consultative forum “All that seem obvious is that our commercial banks had lent out too much money to too many people who had invested them in stocks or petroleum importation but who are now unable to pay back. Beyond that, the public has no clear idea as how or why the loans were given and on what terms.”