Senate Committee Investigates Cecilia Ibru’s Siezed Assets

senateThe Senate has begun investigating an allegation made by stakeholders that the Asset Management Company of Nigeria (AMCON) failed to remit funds and assets of former Managing Director of the Defunct Oceanic Bank, Mrs Cecilia Ibru to shareholders, as well as Eco Bank, the company that took over Oceanic Bank

At an investigative hearing organized by the Senate Committee on Drugs, Narcotics and Financial Crimes, the committee observed that four years after entering into a plea bargain with the office of the Attorney General of the Federation, Mrs Cecilia Ibru is yet to remit N16.1 million to AMCON.

However, the Acting Managing Director of AMCON, Mrs Foluke Dosunmu said AMCON had not taken up Mrs Ibru over the N16.1 billion, because it had not ascertained her unwillingness to pay it, saying once it is confirmed that she’s not ready to pay, the corporation would take her back to court.

The Acting MD Also maintained that AMCON does not owe the Oceanic or Eco Bank.

The Senate Committee also faulted AMCON over its failure to follow due procedures in the sales of some recovered properties, as they revealed how the corporation had failed to advertise the property before embarking on sales as required by the rules governing sales of government property.

The Senate Committee, headed by Senator Victor Lar had entertained a petition said to have been filed by a Nigerian whose name was not disclosed, said that the sale of the properties by (AMCON) were questionable.

The seized assets, worth N569 billion, were taken over by the Federal Government, following a plea bargain entered into by Mrs Ibru. The committee said that the mode of disposal of the assets located within and outside Nigeria was shrouded in secrecy.

Senator Victor Lar said on Monday that Ibru had pleaded guilty, during the course of her prosecution and entered into a plea bargain with the government, while handing over assets allegedly bought with depositor’s funds.

EFCC Must Declare Cecilia Ibru’s Assets Within 72 Hours — Court

A Federal High Court sitting in Lagos has ordered the Economic and Financial Crimes Commission (EFCC) to disclose within 72hours, the whereabouts of the money and properties forfeited by the convicted former Managing Director of Oceanic Bank (now Ecobank), Mrs. Cecilia Ibru.

Presiding Justice Mohammed Idris gave the order while delivering judgment in a Freedom of Information (FOI) suit filed by the President of Progressive Shareholders Association of Nigeria (PSAN), Mr Boniface Okezie.

Mr Okezie, had filed the suit against the EFCC as well as the Minister of Justice and Attorney General of the Federation, Mohammed Bello Adoke (SAN).

He had also urged the court to compel the two defendants to render account of all the legal fees paid so far to private lawyers handling its criminal cases.

Delivering judgment, Justice Idris  held that it was imperative for the anti-graft agency to account for the assets recovered from Ibru, which amounted to about N191 billion.

The judge also ordered  Mr Adoke and the EFCC to, within seventy-two hours, disclose the amounts they have respectively spent on hiring private lawyers for criminal prosecution.

In addition, the court ordered the defendants to disclose the amounts they pay their in-house counsel and their qualifications.

The defendants, according to the judge, are also to state the reasons for preferring private lawyers to their in-house counsel, as well as the amount they have spent for the training of their in-house counsel in the past one year.

The assets forfeited by Mrs Cecila Ibru included 94 landed property scattered in Nigeria, Dubai and the United States of America, as well as shares in about 100 firms both listed and unlisted in the Nigeria Stock Exchange (NSE).

It would be recalled that Mrs Ibru was sentenced to eighteen months imprisonment by the then Chief Judge of the Federal High Court, Justice Dan Abutu after she pleaded guilty to a three-count charge of recklessly granting credit facilities.

Ibru had admitted granting an illegal credit facility of $20 million to WAVES Project Nigeria Limited and N2 billion unlawful credit to Petosan Farms. She also agreed that she failed to ensure that the 2009 balance sheet of Oceanic Bank was a true view of the state of affairs of the bank.

Justice Idris, had in a sister case, ordered the Central Bank of Nigeria (CBN) to account for the assets forfeited by Ibru also within seventy-two hours.

Already, the CBN has appealed against that verdict.

In the notice of appeal, the apex bank stressed that accounting for the assets was not possible in view of the fact that it would expose the legal fees paid to lawyers that handled the matter.

The appeal, which was anchored on one point stated above, was filed by Gabriel Olawoyin (SAN) on behalf of the CBN.

The appeal is yet to be heard and determined by the appellate court.

Court orders CBN to make public management of assets seized from Ibru

A Federal High Court sitting in Lagos has given a 72-hour ultimatum to the Governor of the Central Bank of Nigeria (CBN), Sanusi Lamido Sanusi, to make available, the total cash and value of properties recovered from the former Managing Director of the defunct Oceanic Bank Plc, now (Eco Bank Plc) Mrs. Cecilia Ibru.

Presiding Justice Mohammed Idris also mandated the CBN governor to make public, the whereabouts of the money and properties recovered as well as what part of them has been returned to Oceanic Bank and/or its shareholders.

The judge gave the directive while giving his judgement in a suit filed by the President of Progressive Shareholders Association of Nigeria (PSAN), Mr Boniface Okezie, against the CBN where he sought to compel the apex bank to publicise how it managed about N191 billion worth of assets realised from Mrs. Ibru after her conviction on charges of fraud and mismanagement of Oceanic Bank’s assets.

Justice Idris in his judgement said, “The Central Bank of Nigeria is hereby ordered to declare the whereabouts of the money recovered from Cecilia Ibru; and what part of this cash and properties has been returned to Oceanic Bank and/or its shareholders.

“What is done officially must be done according to the law,” he added.

Justice Idris however turned down a request by Mr Okezie to compel the CBN to disclose the total sum paid to the firms of Olaniwun Ajayi and Kola Awodein in respect of the prosecution of Cecilia Ibru and how much of this sum was in the form of commission on the properties recovered from her.

It will be recalled that the assets forfeited by former Oceanic Bank supremo, Mrs Cecilia Ibru included 94 landed properties scattered in Nigeria, Dubai and the United States of America, as well as shares in about 100 firms both listed and unlisted in the Nigeria Stock Exchange (NSE).

In the written affidavit, which was in response to the counter-affidavit filed by the CBN to the suit, Mr Okezie alleged that he had heard the rumour that Sanusi and his associates within and outside of government had embezzled the recovered funds, a development he said necessitated the reason why the CBN must be made to account for the funds at its disposal under Sanusi.

In the counter-affidavit deposed to by one, Chiaka Mogaha, the CBN urged the court to reject the applicant’s request because the information sought relates to the contractual relationship and negotiation between it, the legal practitioners and other professionals engaged by the apex bank.

CBN noted that the disclosure of the information would interfere with the contracts and negotiations between it and the professionals engaged, adding that there is already a momentous condition of service that the details of remuneration “shall never be disclosed to any third party.”

Responding, Okezie stressed that the apex bank had only laboured in vain to avoid the clear duty imposed on it under the Freedom of Information (FOI) Act to disclose payments it has made to consultants and professionals.

While citing Sections 2 (3) (d) (v) and 2 (4) of the FOI Act, the applicant stated that those sections even require the CBN, as a public institution, to publish and disseminate widely “information relating to the receipt or expenditure of public or other funds of the institution,” without prompting.


Internal fraud in Banks responsible for collapse of Capital market – CBN deputy governor

The deputy governor, financial systems stability, of the Central Bank of Nigeria (CBN), Kingsley Moghalu on Wednesday said that lending to non-priority sectors and to operators of the capital market by commercial banks in Nigeria were key factors responsible for the near-collapse of the nation’s capital market in 2009.

The deputy governor, financial systems stability, of the Central Bank of Nigeria (CBN), Kingsley Moghalu

Mr. Moghalu disclosed this while he was making a submission at the resumed hearing of the House of Representatives ad-hoc committee investigating the collapse of the capital market.

He said that the nation’s financial system would have collapsed if the CBN had not exercised its responsibility as the lender of last resort as he replied to questions by members of the ad-hoc committee on who authorised the CBN to nationalise the bank.

The CBN in November 2008, injected N602 billion into eight banks that were almost running aground.

Giving a breakdown of how some of the banks manipulated their share prices, Mr. Moghalu said that “Afribank PLC via a share buy-back arrangement manipulated its share price when it went to the stock market in 2007.”

He claimed the bank through the services of three stock broking firms bought 66 per cent of the bank’s offer using fictious name of 1,258 subscribers and at the end of the offer, they will announce that their offer was over-subscribed.

He also revealed that Finbank in August 2006 conspired with three companies incorporated by the bank to buy N2.8billion worth of its own shares between August 2006 and August 2008, adding that the bank will claim the offer was over-subscribed.

Another bank accused of the fraudulent shares buy-back was Intercontinental bank. The CBN deputy governor said that the bank bought 3.4million units of its share which constitute 29 per cent of the bank’s share value on the stock market between September 2007 and December 2009.

He gave a breakdown of the non-performing loans by the eight liquidated banks as below:

  • Bank PHB – 40.86%
  • Oceanic Bank – 44.35%
  • Afribank – 47.0%
  • Finbank – 47.45%
  • Intercontinental bank – 48%
  • Equatorial Trust Bank (ETB) – 57%
  • Wema bank – 77%
  • Spring Bank – 85%

He described the banks as ‘net-takers’ that are only surviving exchanges from the inter-bank rate markets’. He added that between 2008 and 2009 “the banks were also on ‘life-supports’, surviving on sub-ventures from the CBN such as the Expanded Discount Window and Standing lending facility.

Bank Consolidation

A member of the committee, Bimbo Daramola, raised the issue on how the bank consolidation of N25 billion forced on the bank’s was the reason why the banks were involved in the round-tripping of share buy-back in a bid to rush and make the N25 billion.

Mr. Moghalu noted that it was just eight banks that were culpable of the wrong-doing and not all the banks that sort to carry-out the consolidation. “Without the consolidation, the global financial crises would have wiped out all the Nigerians bank” he said.

He added that the knock-on effects of the global financial crisis and the capital flight of $15 billion also contributed to the crash of the capital market.

Another Member of the ad-hoc committe, Representative Usman Mohammed, noted that despite the huge investment of funds into the banks, the lending rate to the real is still poor. Responding to the observation, Mr Moghalu stated that “the most important obstacle and challenge to the nation’s real sector is the absence and lack of power and not interest rate”, adding that “loans to the agriculture sector has risen from 1% to 3% in the last one year.”

He also assured the hearing that with the ongoing reforms across the nation’s economic sector, the banks will start granting more loans to the sector once the reforms kick-off.

He further explained that banks lending has increased drastically due to AMCON’s purchase of all bad loans. “Just about 5% of banks loans are now bad loans” he stated.