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FRONTPAGE VIEWPOINT MAGAZINE BY SECTION Special Report Business Nigeria COVER POLITICS BUSINESS & ECONOMICS BACK OF THE BOOK REGULARS NEIL FORD LETTERS PUBLISHERS NOTE AROUND AFRICA POLITALK WILMOT ADVERTISING Email us for advertising information COMPANY PROFILE MISSION TEAM EDITORIAL BOARD DIRECTORS |
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Click here for the NewsAfrica Special Focus Article CBN names toxic debtors THEY ARE GENERALLY regarded as the movers and shakers of society. They are business magnates and top flight politicians. But in the latest clean up of Nigeria’s banks, they have been exposed for creating a mountain of toxic debt that threatened the stability of the entire sector. Last month the Central Bank of Nigeria (CBN) published a list 616 individuals and companies owing N450bn ($2.982bn) in non-performing loans to five banks – BankPHB, Equitorial Trust Bank, Spring Bank, Wema Bank and Unity Bank They include former vice-president Atiku Abubakar, Nigeria’s High Commissioner to South Africa, Buba Marwa and culture minister Adetokunbo Kayode. The debt is in addition to the N747bn ($4.942bn) owed to Afribank, Oceanic Bank, FinBank, Intercontinental Bank and Union Bank, which were found to be insolvent following the first round of a CBN audit in August. This led to a $2.6bn government bail out and the arrest of four chief executives for fraud. A fifth is on the run. BankPHB, Equitorial Trust Bank and Spring Bank were given a $1.37bn lifeline after a further audit early last month found them in a ‘grave situation’. Their managing directors have been sacked and are currently under investigation by the government’s anti-fraud outfit, the Economic and Financial Crimes Commission (EFCC). Another two, Wema Bank and Unity Bank, were asked to recapitalise by June 2010. Those on the latest debtors list have been given until December 31 to pay up or face arrest. But many are strenuously protesting their innocence. Abubakar, who served as vice-president under Olusegun Obasanjo, blamed his aides for not drawing his attention to his N110m ($730,000) debt to Spring Bank, which he said lay in a dormant account. ‘I have since resumed talks with the bank on the issue and the matter will be resolved. We will pay the outstanding sum as soon as it is agreed upon,’ he said in a statement. He went on to apologise for the lapse, adding that he was in full support of the banking clean-up. Marwa flatly denied owing Unity Bank the sum of N1bn. In a press statement he said, ‘I state categorically that I do not owe Unity Bank plc or any other bank any sum of money whatsoever.’ The putative debt is connected to domestic airline Albarka Air, which Marwa was once a director of. ‘I am only mentioned as a director of Albarka Air; I am not Albarka Air,’ Marwa stated. Similarly, Anthony Annenih, former minister of works and chief of the ruling Peoples Democratic Party (PDP). denies ever owing Spring Bank the sum of N2.065bn as alleged, saying he has nothing to do with the beneficiaries of the loan, Mettle Energy and Gas. He is said to have sent a letter to the EFFC, urging it to investigate. Kayode, listed as owing Bank PHB N122m, said he was in dispute with the bank over a shares purchase. ‘They are owing me because my money is still with them,’ he said. Pat Utomi, an academic and former presidential candidate, also denies any connection with the loan granted to Baywood Continental. The transaction took place years before he was invited to join the board as a director, he argued. Other big-name debtors are Femi Odetola of Zenon Oil, and Aliyu Dangote, president of the Nigerian Stock Exchange and one of Africa’s wealthiest men. His company, Dangote, is alleged to owe Equitorial Trust Bank N1.96bn. Meanwhile, stockbroker Peter Okolo of Falcons Securities has the largest debt of more than $110m. Okolo is currently on trial over his company’s N88.3bn debt to three of the first five failed banks. He also owes Bank PHB N16.7bn. His other company, Peterson Oil and Gas, owes the same bank N4.5bn. Sanusi Lamido Sanusi, the CBN governor, said he was aware that there is ‘no criminality in owing but there is everything wrong in owing with impunity.’ At the end of September, it was announced that the the EFCC was able to collect more than N100bn owed to the first five affected banks. Early this month, the CBNordered all banks to report suspicious cash transactions from people involved in politics, otherwise known as PEPs – “politically exposed person” – who include politicians, local government chairs, soldiers and members of royal families. Many PEPs are major shareholders or directors in Nigeria’s banks. |
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