Mrs. Cecilia Ibru

Onwuka Nzeshi 

The House of Representatives Ad Hoc Committee, which investigated the "near collapse of the Nigerian capital market", Tuesday recommended that Mrs. Cecilia Ibru and Erastus Akingbola, former Managing Directors of the defunct Oceanic Bank International Plc and Intercontinental Bank Plc, respectively, be stripped of their national honours.

This formed part of the recommendation of the committee’s report, which was submitted at the close of plenary by its chairman Hon. Tukur El-Sudi, weeks after the investigation was concluded.

The report also came down hard on key financial system regulators and its past and present officials.

The committee advised that all former bank executives, who are recipients of national honours and are currently being prosecuted for crimes and unethical practices, which led to the collapse of their banks, be stripped of the honours.

Of the eight bank CEOs that were sacked by the Central Bank of Nigeria (CBN) in 2009, Ibru was awarded the national honours, Member of the Federal Republic (MFR) and Officer of the Federal Republic (OFR), while Akingbola was conferred with an OFR for services to banking and the country.

But the CBN removed both chief executives and six others in 2009 after a joint audit conducted by the apex regulator and Nigeria Deposit Insurance Corporation (NDIC) had discovered that their banks’ capital was impaired and that they were illiquid.

The Economic and Financial Crimes Commission (EFCC) was later to arrest and prosecute them for running their institutions aground.

Ibru, who pleaded guilty, was convicted in a plea bargain, while Akingbola is still in court.

Also, the committee said that it had established that N8 billion got missing during the recapitalisation of Union Bank Plc through a public offer, concluding that investors’ funds were fraudulently diverted after the offer.

The report recommended that the past board and management of the bank, the CEO of the issuing house to the offer, the present members of the board and management including the managing director of the bank, "be investigated by the Economic and Financial Crimes Commission with a view to establishing the facts and recovering the missing funds."

In its most controversial move, the committee went on to assume a judicial role, interpreting the laws of the Federal Republic of Nigeria, when it ruled that "the nationalisation of three banks and their subsequent change of names to Mainstreet Bank Limited, Keystone Bank Limited and Enterprise Bank Limited, was in violation of the AMCON Act, NDIC Act and Section 44 of the 1999 Constitution.

“The process of transfer (of ownership) was fraught with potential forgery, unethical practices, abuse of office and various unacceptable bad corporate governance precedents.”

After passing its judgement, the committee recommended that the transaction be reviewed and investigations carried out by EFCC on the Managing Director of NDIC, Mr. Umaru Ibrahim; Managing Director of AMCON, Mr. Mustafa Chike-Obi; as well as the Governor of the CBN, Mallam Sanusi Lamido Sanusi, to establish their complicity in the deal.

It said that the Registrar General of the Corporate Affairs Commission (CAC), Mr. Bello Mahmud, and “all those who were used or offered themselves to be used in the various misrepresentations leading to the corporate registration of the nationalised banks” should be tracked and made to face the full wrath of the law.

Also recommended for prosecution were all the “faceless lawyers” and directors of the three nationalised banks.

The report said: “That the Governor of CBN, Mallam Sanusi Lamido Sanusi as the Chief Executive Officer and Chairman of the CBN board is hereby cited for contempt of the House of Representatives having refused to produce, after demand, the Special Examination Report upon which the intervention in eight banks in August 2009 was based.

“That the CBN action in disbursing N620 billion bail-out funds and other intervention funds afterwards did not follow the due process of the law and the Constitution as the source of funds and the appropriate authority did not approve.”

The report also recommended that former CBN Governor, Prof Chukwuma Soludo; former CBN Director, Banking Supervision, Mr. Ignatius Imala; and Deputy Governor, Mr. Tunde Lemo, who were also in charge of banking supervision, be further investigated on account of their role in the banking sector crisis that led to the CBN intervention in eight banks in August 2009.

On the Securities and Exchange Commission (SEC), the report said that the appointment of Ms. Arunma Oteh as Director General of SEC be terminated forthwith as her appointment was in violation of Section 3(2) and Section 38(1) and other sections of the Investment and Securities Act (ISA), as she did not have 25 years experience in the Nigeria capital market as required.

According to the report, “Oteh has shown incompetence in the management of the human and material resources at her disposal in SEC and displayed lack of transparency on the job.”

It also faulted the engagement of Access Bank staff by SEC, who are on secondment to the institution which regulates the same bank. The report stated that this is unethical and may erode investors' confidence and therefore the affected personnel should be disengaged immediately.

It also asked that SEC withdraws its nominees on the Council of the Nigeria Stock Exchange (NSE) as a way of further boosting investors' confidence.

In apparent frustration with Sanusi, Chike-Obi and Oteh, who repeatedly ignored the committee when it asked that they submit vital documents during the probe, it also recommended that trio be prosecuted by the Attorney General of the Federation (AGF) for refusing to submit the documents.