Stockbrokers condemn publication of new debtors' lists




Stockbrokers at the Nigerian Stock Exchange have criticised the new publication of debtors' lists by the Central Bank of Nigeria (CBN), saying it was a wrong signal that could jeopardise business relationships.

Some of the brokers said the CBN could have assisted the "troubled" banks in recovering their bad loans without making some businesses look bad in the public's eyes.

"Publishing commercial relationships between a bank and its customer is not right," said Rasheed Yussuff, the chief executive officer of Trust Yields Securities Limited, saying such relationship should be kept confidential.

Mr. Yussuff said people should realise that "to have a good business plan achieved, a company will have to borrow money to function. If you're in business and you don't borrow, then you must be stealing money somewhere. To borrow money is not a crime since it's a commercial borrowing."

Loan restructuring

However, Mr. Yussuff, who is also the Chairman of the Association of Stockbroking Houses of Nigeria (ASHON), said stockbrokers have made their point clear to their banks that the loans granted to them should be restructured.

"Whether you (banks) publish or not, the final analysis is to continue to sit down and agree with the banks on how to repay the money; as long as it was used for the purpose it was meant for. The banks know the current situation of the market," he said.

"I believe the money was used to buy stocks, and the stocks are with the banks. So there is no money that was taken away by anybody," he added.

Disciplinary measure

Meanwhile, Okechukwu Uwegbu, an executive member of ASHON, has encouraged his colleagues whose names were published not to panic if they did not engage in any fraudulent act.

"Stockbrokers should not be afraid if they have not done any illegal business, even if the Economic and Financial Crimes Commission comes after them," he said.

Mr. Uwegbu added that if the security agency can establish that any stockbroker diverted or use the borrowed money for other purposes than what it was officially taken for, the association will take disciplinary measure against such members.

"But if no illegality was found, then we'll continue to talk to the banks on loan restructuring and to also encourage them to embrace the loan write-off plan that the CBN urged them to take for stockbrokers," Mr. Uwegbu said.

Sanusi Lamido Sanusi, CBN governor, on September 16, during his visit to the Stock Exchange, had promised stockbrokers that the CBN will ask banks to write-off doubtful loans. "Banks cannot overtake the profits and overlook the losses. Best accounting practice is to recognise the losses. If the market comes back, take the profit; but for now, take the loss," he said.

However, Mr. Sanusi blamed stockbrokers and their lenders for an act of "irresponsibility" which they took when margin loans were granted without considering the volatile nature of the stock market.

Debtors' list

Some of the stockbrokers whose firms were mentioned in the new five banks debtors' lists include: Gbenga Obisesan of Topmost Securities Limited, with N167.27 million debt; Olanrewaju Abimbola Braimoh of Tower Securities and Investment Limited, N337.76 million; Simide Sanusi of Trade Link Finance and Securities, N533.09 million. Peter Ololo's Falcon Securities topped the debtors' lists with over N21 billion debt.

The CBN, on Wednesday, published the list of non-performing loans of N100m and above for Bank PHB, Spring Bank, Unity Bank, Wema Bank and Equitorial Trust Bank as at June 30, 2009.



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