Proshare Logo
   Market Date: 23-01-2015   
Agriculture ARTS FINANCE All One Min News Archives Bonds Cap Mkt Sentiments Capital Market CASHLESS NIGERIA Commodities Corporate Earnings Daily & Weekly Market Updates Elections Enterpreneurship ETFs Forex Frauds & Scandals General Global Market Insurance Investors NewsBeat Islamic Finance Mergers & Aquisitions Money Market Mortgage Mutual Funds Nigeria Economy Oil Sector Opinions and Analysis Pensions People Personal Finance Politics Power Products & Services Professionals Property Public Offers Private Placements Regulators REITs Stock PICKS Taxation Telcos Travel & Tours Unlisted OTC MARKET World of Business

Central Bank suspends four Finbank directors

Category: Capital Market

  Read (2032)
Central Bank suspends four Finbank directors

By Stanley Oronsaye October 11, 2010 

The Central Bank has come down hard on directors of rescued banks who have insider related loans, in a renewed crackdown on those that have contributed to the terrible state of some of the banks.As part of efforts to recover the loans, the Central Bank has placed some of the affected directors on suspension with an ultimatum to repay the loans or face prosecution.

Specifically, the regulator on September 27 suspended four non-executive directors of Finbank for 90 days for failure to pay their debts. They are Ernest Orji, proprietor of Southern Sun Hotel, Ikoyi; Ezelue Efobi; Iheanyichukwu Anyadiegwu; and Agnes Ebubedike.

The suspended directors together owe the bank N20 billion, out of about N25 billion of insider related loans. Mrs. Ebubedike is also standing trial alongside Okey Nwosu, the former chief executive officer of the bank; Danjuma Ocholi; and Dayo Famoroti, both of whom are former directors of the bank.

The Economic and Financial Crimes Commission (EFCC) had in 2009 taken them to court on a 90-count charge, bordering on money laundering and granting of reckless loans, amongst other offences.

Outstanding indebtedness

The CBN gave each of the directors an ultimatum to repay their outstanding indebtedness to the bank within that period, failing which, they shall be prosecuted and blacklisted from holding any position in any bank or financial institution, under the purview of the CBN.

It had earlier issued letters of query to the recalcitrant directors, who failed to heed the warning. This latest action by the bank became inevitable, since the affected directors did not pay back their loan.

It was gathered that the CBN may have moved against the affected officials in order to recover the funds from them before their final exit from the bank. The Central Bank recently released tenure guidelines, which stipulate that non executive directors would only serve for two years after which their terms may be renewed for another two years, but will be subject to the approval of the apex bank.

A source at Finbank said the CBN onslaught is also a moral issue as directors who are indebted to the banks have no justifications to decide on actions against other debtors.“It is not proper that directors who are indebted would now sit at meetings where decisions are taken against other debtors. This is a corporate governance issue. It is part of the sanitisation process,” the source said.

Only Finbank

Mohammed Abdullahi, the Central Bank spokesperson, said the action was taken against the directors of Finbank, and not to directors of other rescued banks. He added that the move against the directors was in fulfillment of the code of conduct of bank directors, which stipulates that directors should not have non performing insider related loans.

Sola Oni, the Nigerian Stock Exchange spokesperson, said he was not aware of the development.Finbank officials refused to comment on this development. They did not respond to enquiries on the issue for nearly a week.

But Susanne Iroche, its chief executive, told shareholders at a forum in Lagos recently that the bank is operating with negative capital, as 88 percent of its loans are currently non performing.“We have taken deposits and shareholders fund up to N88 billion, which is yielding nothing for us but that is costing us money. We can’t continue to operate like that. We have to resolve this as quickly as possible,” she said.

Only N2.7 billion has been recovered from insider related loans, putting the total amount of non performing loans at N156 billion, while the bank expects to recover between N10 to N15 billion before year end.


Tags: , 

Comment With Your Facebook or Yahoo! ID

Latest news

News on Capital Market

About Us

Who We Are
Our Team & Partners
Corporate Governance
Advertise with Us
Subscribe / Unsubscribe
Site Map
News Feed - RSS
Contact Us
Volunteer Program
Message from CEO

News & Features
The Analyst / Market Data
Investor Relations Portal
The Regulator
Economy & Politics
Training Portal
Events Calendar
NewsStands - Online Reputation

Products and Services

Research & Market Intelligence
Analyst Services
Offers & Rights Support Service
Investor Relations Services
Alert & Subscription Services
Share Support Services
Proshare Consult
Event & Seminar Coverage
Market Directory
File a Complaint
News & Analysis

News from TheANALYST
Video News from WebTV
Money Market Updates
Opinions & Analysis
Nigerian Economy
Market Data
The Regulator
Discussion Forum

Subscriber Agreement
Privacy Policy
Data Policy
Copyright Policy
Comments in Site
Advertising Code
Conflict of Interest
Content Partnership
3rd Parties

Online Trading and Execution
Legal Support Services
Web/Technology Services
File a Complaint

CBN Governor 2014