🐂 Not all bull runs are created equal. November’s AI picks include 5 stocks up +20% eachUnlock Stocks

CORRECTED - (OFFICIAL)-Nigeria threatens to arrest bank debtors,seize assets

Published 08/20/2009, 03:54 AM

(Deletes reference to Delta state as a defaulting debtor after central bank corrected list)

* List of debtors includes powerful tycoons

* Defaulters could face arrest, asset seizures

* Bank execs sought for questioning

By Nick Tattersall

LAGOS, Aug 19 (Reuters) - Nigeria's anti-graft police have given defaulting debtors of five banks rescued in a $2.6 billion bailout, including some of the nation's most powerful tycoons, a week to organise repayment or face arrest and asset seizures.

Farida Waziri, chairwoman of the Economic and Financial Crimes Commission (EFCC), set the deadline hours after the central bank published a list of the banks' debtors and warned they would face legal action if they did not pay up.

"She has given them one week to bring in their money to the commission or risk arrest, prosecution and losing their assets all over the country," EFCC spokesman Femi Babafemi said.

The central bank's list of more than 200 firms, individuals and state bodies contains stockbrokers and local oil and gas firms as well as larger companies, including conglomerates Transcorp and Dangote Industries and fuel distributors African Petroleum and Oando Plc .

Oando denied holding a non-performing loan. [ID:nLJ23114]

The names listed as directors and shareholders in some of the defaulting companies reads like a roll-call of the great and the good of Nigeria's corporate aristocracy.

It includes two of the country's best known tycoons, Aliko Dangote and Femi Otedola -- the only Nigerians on the latest Forbes billionaires list, worth $2.5 billion and $1.2 billion respectively -- as well as Ndi Okereke-Onyiuke, director-general of the stock exchange and chairman of Transcorp.

Aigboje Aig-Imoukhuede, the group managing director of Access Bank , is also listed as the director of a firm owing more than 16 billion naira ($107 million).

"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 central bank said in a statement.

"These are the largest debtors and the CBN will continue to publish the list of defaulters on an on-going basis."

The central bank last Friday injected 400 billion naira ($2.6 billion) into Afribank , Finbank , Intercontinental Bank , Oceanic Bank and Union Bank and sacked their chief executives.

The banks had notched up bad loans totalling 1.14 trillion naira ($7.6 billion) and the regulator said lax governance had left them so weakly capitalised that they posed a threat to the banking system in sub-Saharan Africa's second biggest economy.

The naira was broadly stable at around 158.30 to the dollar on the interbank market on Wednesday, although volumes remained low with foreign counterparties nervous about trading, while the stock market <.LAGLG> fell 2.6 percent with only five of more than 200 stocks notching up gains.

NEW CHAPTER?

Corruption, lax regulation and weak corporate governance have long been top of the list of concerns for foreign investors in Nigeria. Analysts say the move by Central Bank Governor Lamido Sanusi, who has been in the job just two months, could be the start of a major change in the business landscape.

The sacking of the senior management of the five banks sent shockwaves through the corporate establishment. The regulator said the institutions would be run as going concerns until new investors could be found to recapitalise them.

Published on the central bank website (cenbank.org), the list of debtors includes the southeastern state of Ebonyi, the judiciary of Bauchi state and the Ministry of Finance and Economic Planning.

It names Peter Odili -- former governor of Rivers, the richest oil state in the Niger Delta, who last year secured a "perpetual injunction" against arrest by the anti-graft police -- as owing 189,123,712 naira ($1.26 million).

Odili governed Rivers, which has an annual budget of well over $1 billion and where most of the estimated 5 million residents have no power, clean water or access to functional schools and clinics, for eight years until May 2007.

But the amount he is listed as owing is dwarfed by the debts of the largest defaulters.

Local oil and gas services firms Ascot Offshore Nigeria Limited and Rockson Engineering Limited -- whose directors include J.I.A. Arumemi-Ikhide, founder of Nigerian airline Arik Air -- are listed as owing Intercontinental Bank 45 billion and 37 billion naira respectively.

Transcorp is listed as owing Union Bank 31 billion naira.

EFCC's Babafemi said anti-corruption police have detained and questioned 11 bank executives and was seeking to bring in eight others.

Analysts say criminal charges could be brought if executives are found to have falsified accounts or breached share price manipulation rules by setting up subsidiaries as vehicles to trade their own stock and push the share price higher.

Nigeria's Guardian newspaper said one of the sacked chief executives, former Intercontinental boss Erastus Akingbola, had won a reprieve from a federal high court allowing him to challenge his removal by the central bank. (For more Reuters Africa coverage and to have your say on the top issues, visit: http://af.reuters.com/ ) (Additional reporting by Oludare Mayowa in Lagos and Camillus Eboh in Abuja; Editing by Jon Boyle, Patrick Graham and Toby Chopra)

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.