Nigeria bourse boss denies debts as showdown deepens

August 24, 2009

By Nick Tattersall
LAGOS, Aug 24 (Reuters) – The head of Nigeria’s stock exchange on Monday denied being among debtors owing banks billions of dollars, the latest high-profile business figure to join a showdown with the country’s new central bank governor.

The regulator last week published a list of firms and individuals, including some of Nigeria’s most powerful tycoons, whom it said owed 747 billion naira ($5 billion) to five banks bailed out to prevent a systemic banking crisis.

Anti-corruption police have declared the former heads of two of the banks — Cecilia Ibru and Erastus Akingbola from Oceanic Bank and Intercontinental BankĀ  — wanted in connection with fraud, insider trading and money laundering.

The standoff between new central bank governor Lamido Sanusi and some of the biggest names in corporate Nigeria has made front-page headlines for days as Nigerians wait to see whether figures long considered untouchable will face prosecution.

“I unequivocally state that I do not owe any Nigerian or foreign bank,” Ndi Okereke-Onyiuke, the director-general of the bourse, said in a full-page advert in the ThisDay newspaper.

Okereke-Onyiuke was included on the list of debtors because of her position as chairman of Transcorp <TCNP.LG>, a conglomerate which the regulator said was one of the biggest defaulters to both Oceanic and Intercontinental.

The Economic and Financial Crimes Commission (EFCC), Nigeria’s anti-corruption police, took out its own full-page advert in the same newspaper entitled “Notice to Bank Debtors”, repeating a one-week deadline for defaulters to pay up.

“Debtors have seven days with effect from Weds Aug. 19 to make necessary payments failing which the commission will have no other choice but to exercise its powers under the law to recover the funds,” it said.

It said it had powers to “trace, freeze, confiscate or seize” proceeds from “financial crime related offences”.

The central bank injected $2.6 billion into Intercontinental Bank, Oceanic Bank, Afribank, Finbank and Union Bank on Aug. 14 and sacked their senior management, saying lax governance had left them so weakly capitalised that they posed a systemic risk.

The EFCC has been interrogating those executives it has managed to track down but on Sunday declared Ibru and Akingbola wanted after they failed to show up for questioning.

Akingbola has launched a legal challenge to his removal and demanded 50 billion naira ($333 million) in damages, according to court papers. A hearing is due on Aug. 28.

ThisDay reported on Saturday that Ibru was also seeking
50 billion naira in damages.

Integrated Oil and Gas Ltd placed a second full-page advert opposite Okereke-Onyiuke’s, denying it had a 2 billion naira non-performing loan with Intercontinental Bank.

Aliko Dangote, one of only two Nigerians on the latest Forbes billionaires list, as well as energy firm Oando have also denied holding non-performing loans.

If successful, the challenges could be a serious setback for Sanusi’s efforts to sanitise the banking system, whose lack of transparency has long been a major disincentive to investors.

Sanusi took over at the helm of the regulator just two months ago after building a strong reputation for corporate governance and risk management as head of First Bank.

Bankers say his insider knowledge, built over more than two decades in the Nigerian industry, means he knows exactly where the skeletons in the sector’s closet lie.

But those he has taken on include some of the most powerful figures in Nigeria, including Peter Odili, former governor of Rivers, the richest oil state in the Niger Delta, who was listed as owing almost 190 million naira ($1.26 million).

Odili last year secured a “perpetual injunction” against arrest by the anti-graft police in a separate case and critics say the EFCC itself is compromised, dropping investigations against powerful politicians for fear of retribution.

Analysts say the challenge for Nigeria’s anti-corruption efforts now is to prove that its corporate heavyweights are not equally as immune from prosecution as some of its politicians.

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