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Financial terrorism – the new face of the radical islamization of Nigeria

September 4, 2009

On Friday the 14th of August 2009, Nigerians were jolted just after the Friday Mosque prayers [about the same time the Boro Haram’s of the world take their actions] to what is now termed the Banking tsunami with the announcement of the firing the CEOs of 5 Banks and their Executive Directors on the grounds that the said banks were distressed requiring the intervention of the CBN to protect depositors, the banking public and the economy from the negative impact of their imminent failure.


The Governor announced new CEOs for these banks and injected some 420 billion Naira of newly printed money into the affected Banks, and has since unleashed the wrath of the EFCC on the sacked bank officials and some of the debtors to these banks in an effort to recover some of the debts that have contributed to the precarious situation of these banks.  

Ordinarily we as members of this forum would have seen these actions of the CBN and its Governor as normal since banks take-over and failures are not new to Nigeria - the metamorphosis of consolidation in the banking industry is a very recent experience. However, facts that have emerged since the August 14th action have shown that there is clearly a manifest hidden agenda outside what we have been told by the CBN Governor.

The first surprise is the scoop on the script by the vanguard newspapers which was published in March and is now being played out in August by the Governor with a level of accuracy that is baffling.

The following clearly gave out the CBN Governor.

1.    Very hasty action with manifest failure to follow due process. The actions of the CBN Governor was said to be based on the report of an adhoc-committee which investigated 10 banks out of the existing 24 banks. Further investigation would continue with another batch of 11 banks and the whole exercise is billed to end in the month of September. Why the hurry in August? Would it not have been better to conclude the audit and then work out a comprehensive strategy for the whole industry? Since this action was not about the overall welfare of the Banking industry one can see why Mallam Sanusi did not wait for the outcome of an industry wide audit.
2.    A report from this adhoc committee, should by process go to the board of these Banks for their reaction with a request to remedy within a time frame, the discovered defects in the structure of these Banks by a number of means which should include the call for the injection of more capital from the shareholders and/or the aggressive recovery of debts from creditors. There is no report of this being done by the CBN
3.    The 420 billion Naira injected certainly did not go through the known procedures stipulated by law establishing the Securities and Exchange Commission and as concerning public quoted companies. This process was also inconsistent with the process for the bail-out monies provided in the US, Europe and other Civilised nations who have worked at securing their financial institutions as a result of the global financial meltdown. We are told by the CBN Governor that it was printed monies. We are yet to understand the full implications of this action where in one day the CBN injected this amount of money into the economy in terms of possible inflationary backlash and its impact on the value of the Naira. We are also waiting to see the actions of the National Assembly vested with the authority of appropriation to scrutinize this unauthorised injection.
4.    The grand-standing and posturing of the Governor as he waltzes through this exercise in a country and regime that is under the rule of law.
5.    The immediate efforts to sell these banks to some interests, with the resulting contradicting statements which give the impression that the CBN house is not in order and disunited. In all Mallam Sanusi has been speaking from both sides of his mouth because he is acting before thinking.

We can easily see from the action of the CBN Governor the following:

1.    A deliberate move into the Banking industry to harvest 5 banks [from where he has not planted] under false pretext for deployment towards the establishment of an Islamic bank. This proposed Islamic bank will rely on the infrastructure of these banks to launch itself into becoming the biggest bank in Nigeria. Imagine the branch network of Union Bank – Big Strong and Reliable, Intercontinental Bank, Oceanic Bank, Afribank in the hands of one institution with Boko Haram as a back drop!!!!.
2.    The Governor with his post graduate training in Islamic fundamentalism in Sudan is driving an agenda that is anti capitalism and free enterprise with a religious undertone having elected to take over banks whose CEOs [Cecilia Ibru and Erastus Akingbola] are in the vanguard of Christian work.
3.    Still on this radical Islamic agenda the Governor is averse to the spirit of enterprise, self determination and creative hard work which Oceanic Bank a product of a known Nigeria family of industry represents.
•    This particular bank just before the action of Mallam Sanusi had secured an approval from the CBN for its books - the annual accounts /report for the year ended 2008.
•    Huge provisions of N45 billion were made for bad loans, and was in preparation for it AGM in late August when all of a sudden an action that  technically robs all its shareholders of their ownership was taken without an opportunity to secure or remedy same.
•    This is a bank that has won many awards and with core ownership drawn from the Urhobos, Ijaws, Itsekiris, other Niger Deltans and indeed a good number of Nigerians. It has a very strong branch network across the nation with a very viable presence in the northern parts of this country. 
•    It has effectively used its balance sheet to support the building of a new Nigeria.
•    This said balance sheet was now threatened by the effects of the global financial crisis which saw a huge outflow of funds that were withdrawn by offshore investors from the bank. This shortfall looking at the capability to provision N45b in this year could have easily been covered in a maximum period of 3 years with the due support of the CBN as it is being done all over the world.
4.    In this grand design to deceive, this bow tie wearing Governor who chose Sudan of all places to do a Masters degree in Islamic Studies chose to wear a Niger Delta outfit on his interview with the CNN in order to convey the picture of a patriot when he is actually striping the people of that region of a very valuable asset and access to wealth creation for these heavily denied peoples of this nation.

The consequences of the CBN Governor actions are as follows:

1.    There is now a run on these 5 banks which will end up in their overall loss of deposit far greater than they were before the take over and injection of N420bn. They would end up as mere shells thereby making them a cheap buy for their infrastructure to be used for the Islamic bank.
2.    There will be loss of jobs, and projects being financed by these banks will suffer in the circumstances with telling effects on the economy. Projects like the Kano Shopping Complex under the financing and superintendence of Oceanic Bank are for now doomed.
3.    The said Islamic bank with the connivance of Mallam Sanusi and his cohorts plan to acquire these shells cheaply with the extensive branch network to become centres for the great work of Islamization. Combine this with the attrition of all the other groups from the top echelon of the NNPC and the picture becomes grim and clear.
4.    All existing shareholders would have lost their investments with no recourse to recover same.
5.    Nigeria is now seen in a very bad light with a signal as an unfriendly destination for foreign investment by the way investors in Nigeria are being treated
6.    The economy would be the worse for it and none of the groups whether the extremists Islamist behind this scheme, the moderate Islamist or the Christians of the Nation would benefit.

The call:

1.    All people of good will to stop the CBN Governor on his track.
2.    Reverse this forced acquisition of these banks and opt for a more humane process of recapitalising these banks. The first option for recapitalization is for existing shareholders to inject fresh funds within a specified time frame. If the shareholders fail to recapitalize, then new investors should be sought.
3.    The CBN Governor should not be a marketing agent of new banks. Anybody or group interested in starting a bank should go and get their licence, build their branches and grow their business and not look at stealing the commonwealth of others. This also applies to the Islamic Bank dream. We hereby put a tag of ‘Buyer beware’ on all the shares and ownership instruments of these 5 banks. The Governor can pursue his dream of Islamic Bank by working like every other bank through the granting of licence and building their own infrastructure rather than working at taking those of others who have worked hard over the years to build their businesses under a culture of free enterprise.
4.    No investor should consider any of these banks as free/cheap assets for acquisition, as long drawn legal battles await these actions and if we work with the new judiciary we have in Nigeria, there is likely to be a replay of the Savannah bank experience where official high handedness was reversed.
5.    The Yar’dua administration should work at taking the vision 20/20/20 in the wider context of not only growing our potentials but also minimizing self inflicted pains such as this action by Mallam Sanusi in terms of the choice and implementation of policy options available to government. The CBN being cardinal to the attainment of this vision should therefore be run by very capable hands that can steer the nation in that direction. We doubt if this Governor is well suited for this assignment. We hereby call for his immediate resignation or sack before he does further damage to our already sick economy. He is like a ‘bull in a china shop’ that needs to be eased out of this very delicate duty that requires a sublime, matured and less exuberant personality.


SAMSON AKPOBEVUGHE
TRUTH AND JUSTICE FORUM
47 PESSU ROAD
WARRI
4 SEPTEMBER 2009.


 


 
 

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