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Feedback from London Townhall Meeting: Sanusi Promises More Shocks



Going into the third week of the crisis in the banking sector, the Governor of the Central Bank of Nigeria (CBN), Mr. Sanusi Lamido Sanusi, has promised "more shocks" for the already traumatised public. This is because, beginning this week, charges will be preferred against the five Chief Executive Officers (CEOs) and the some former management staff of Oceanic, Intercontinental, Afribank, Finbank and Union Banks, who were sacked from office on August 14.

"In the next few days, you'll see the charges and you'll be shocked"
Sanusi said, as he fielded questions on a live phone-in on BEN TV's morning show on Saturday.

Hence, Courtrooms, jailhouses and detention centres of the Economic and Financial Crimes Commission (EFCC) may witness an unusual influx of visitors in the next few days.

This is when the first ripple effect of the recent Sanusitisation exercise becomes public knowledge.

So, for people, who are still in doubt about the seriousness of the CBN governor, the courtrooms will be the place to be.

Sanusi fielded questions, among others, on the worrisome areas of:
    i. taking a long time for the CBN to detect the reported rot in the financial system;
   ii. alleged undue haste to sack the bank chiefs and publish the banks' debtors and their indebtedness; and
   iii. pursuing a northern agenda to supplant the southern hold on the banking sector of the economy.

He also responded to The Guardian query at a Friday meeting at Liverpool Street, on not giving the affected banks time to recover the loans.

Asked by the TV host, Kayode Akintemi, as to why it took the CBN so long to detect that the banks were in that situation, Sanusi said:

"It's very easy for you to run a bank for many years without anyone knowing it's true state. The only time people will know is if there's external shocks," such as the falling prices of oil of the past few months.

"If there're external shocks, someone will know that somebody is struggling to keep their obligations.

"If oil prices had not collapsed, the banks would not have been found out." But when oil prices started collapsing, "that's when the boys were separated from the men."

Sanusi revealed that from October last year, the five affected banks were living on loans and struggling to meet their obligations. Hence, he sent in examiners to give him a report when he took over from Professor Chukwuma Soludo.

He cited the case of the Lehman Brothers in the United States, to justify the argument that bankers could be dubious and not disclose the real state of their institutions to their shareholders, the public and auditors.

But Sanusi had on Friday, promised that the CBN would ensure we "improve full disclosure."

However, addressing a packed hall of foreign investors and Nigerian professionals at the Andaz Hotel on Liverpool street, Sanusi said he wouldn't blame the auditors of those five banks.

"I'm very unwilling to blame auditors, "because even if they knew, perhaps, they wouldn't have done anything nor get to the root cause of the banks' problems.

"The reasons we got to the bottom of the problem is because we have powers that auditors don't have."

On if there was any northern agenda in the CBN action, Sanusi smiled wryly before dismissing the idea.

He stated that there's no basis for insinuating that even though 23 of the banks' CEOs are southerners while only one out of the 24 CEOs is from the North, stressing, however, "it's not to imply that" though.

He stated that, "these offences were committed by individuals," and besides, the "CBN is not a northern institution."

"The basis of our action was that these banks were in a grave situation and was it responsible for me to act or not?" he asked.

Sanusi continued, saying, "I don't usually get into this North/South argument because those who ran these banks were human beings," and not geopolitical zones or entities.

"Who was running these institutions?" he asked.

The CBN governor also fielded questions from The Guardian during the Friday meeting at Liverpool street on whether he gave the boards of the five banks enough time to respond to the charges that led to their removal.

His response was: "The decision to remove the CEOs of those banks was taken because they had run the banks against the interests of their depositors and creditors.

"And when we discovered that, am I supposed to ask the bank Managing Director if he agrees with me?"

"We published the list of the non-performing loans and that is enough. That a bank has N200 billion in non-performing loans is enough to move any Chief Executive."

Sanusi added: "I have no doubt in my mind that if we had given them the opportunity, they would not have had answers to that.

"But if we had written them, they would have taken out injunctions and we would not have been able to do what we did.

"So, it was extremely important that if they're going to fight from the courts, let them fight from outside, not from within."

Allaying the fears of foreign investors at the forum, Sanusi said: "As long as CBN is in the banks, we stand behind the liabilities, and if they default, we will underwrite them."

He also told the gathering that, with it's action, the CBN wanted to let everyone know that "there's a paradigm shift."

"We want to send a message across that the days of impunity are over," he said.

Meanwhile, a Lagos High Court had, last Wednesday ordered the Economic and Financial Crimes Commission (EFCC) to release the former Chairman of Intercontinental Bank Plc, Mr. Raymond Obieri, and eight former directors of the bank on bail, an order which the Commission allegedly refused obey.

The Exparte Order was given based on the request by the bank directors' counsel, Professor G. A Olawoyin (SAN) of the Olawoyin Olawoyin Chambers seeking an order restraining the EFCC from stopping the detained former directors from exercising their fundamental human rights.

According to the court order issued Hon. Justice R.I.B Adebiyi and signed by the Registrar, O.A Oshundun, a copy of which was made available to The Guardian, the Court gave the applicants leave to enforce their 'fundamental human rights against the respondents,' and ordered the EFCC to stay all actions that might infringe on the fundamental rights of the applicants pending the hearing and determination of the proceedings.

It also ordered that the respondents should admit the applicants to bail and release the applicants forthwith upon the provision of sureties.

It was, however gathered that the EFCC had had refused to sign the order since Wednesday, instead, insisting on its terms, which the commission said the detainees had not been able to meet.

The detainees affected by the Order include, former Chairman of Intercontinental Bank, Dr Raymond Obieri, Chief Samuel Igbayilola Adegbite, Mr. Chris A. Alabi, and Dr. (Mrs.) Toyin Philips (who was said to have collapsed in detention). Others are Mr. Bayo Dada, Dr. Sanni Adams, Engr Hynacinth U. F. Enuha, Alhaji Isyaku Umar, and Mrs. Seinye O.B lulu-Briggs.

Armed with the ex parte Order from the Lagos High Court, lawyer to Raymond Obieri, and eight others had written to the Commission over bail conditions for the bank executives.

The letter dated August 28, and signed by their lawyer, Prof G.A Olawoyin (SAN), read in parts: "Following your commission's refusal to release the applicants on the bail terms stipulated on August 24, 2009, to wit, a person employed in the Civil Service in Nigeria, not lower than level grade 14, we were constrained to seek the leave of the High Court of Lagos State to enforce their fundamental human rights.

"On 27 August, several attempts were made by the bailiff of the Lagos State High Court to serve the said order on the commission but to no avail." The bank executives continued: "We do not want to believe that the refusal to accept service is part of an orchestrated attempt to circumvent the due process of the law, which not only your Commission but also the current government of President Umaru Yar'Adua has avowed to protect."

It would be recalled that Chairman of the Commission, Farida Waziri had at a news conference on August 27 said that those in detention could get bail if they could provide; deposit guarantee in the sum of N1billion in favour of the Commission, tax clearance for three years, and a surety who must be a serving/current Minister who will provide a landed property in Victoria Island, Ikoyi, Maitaima, or Asokoro in Abuja. Obieri and others have however argued that there was a prior subsisting court in respect to the conditions for their bail.




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