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Africa Business News of Thursday, 15 July 2021


Banking sector clean-up: Nigerian convictions offer lessons to ongoing cases

The Economic and Financial Crimes Commission (EFCC) The Economic and Financial Crimes Commission (EFCC)

At a time when the state is pressing on with criminal cases charges against shareholders and management staff of some of the liquidated banks, courts in Nigeria are jailing bankers over similar issues.

This article, published by Premium Times Nigeria, examines the circumstances leading to the convictions and offers invaluable lessons for the ongoing cases in the country.

On 17 June, a former managing director (MD) of the defunct Bank PHB, Francis Atuche, was convicted of fraud by a high court in Ikeja, Lagos.

The ruling came after a lengthy legal battle that lasted about a decade.

Mr Atuche and a former chief financial officer (CFO) of the bank, Ugo Anyanwu, were accused of stealing N25.7 billion. The Economic and Financial Crimes Commission (EFCC) had preferred 27 counts against both of them.
Mr Atuche and his co-defendant begged the judge, Lateefa Okunnu, not to send them to prison.

“I plead for mercy, leniency, your kindness, and I plead that out of your kindness and generosity, you will not allow me to go to jail,” the former MD said.

“I am sorry and remorseful.”


The judge eventually sentenced Messrs Atuche and Anyanwu to six- and four-year jail terms respectively.
“It was a well-planned, well-executed scheme but the bubble busted when the Central Bank of Nigeria (CBN) intervened,” the judge held.

“The first defendant (Atuche) was diversionary and evasive on the witness stand; sometimes confrontational and rude.

“The third defendant (Anyanwu) was also combative and rude under cross-examination,” the judege observed.

However, this is not the first time a similar scenario would play out in the Nigerian banking industry. Mr Atuche is only the lastest in what is becoming a growing list of convicted rogue bankers.

Memory Lane

Cecilia Ibru: On October 8, 2010, a former chief executive officer (CEO) of the defunct Oceanic Bank, Cecilla Ibru, was convicted and sentenced to six months imprisonment after a plea bargain that saw her pleading to charges of fraud.
She was ordered to pay back more than €1 billion, following 25 counts of fraud.

Mrs Ibru, who began working at the bank in the early 1990s as a general manger, rose to become the MD seven years after.

During her time, Oceanic Bank evolved from its family-owned bank beginning to become one of Nigeria’s biggest publicly listed companies.

She was accused of granting credit facilities of N16 billion to a company that “had no collateral.”

Although she denied any wrongdoing, over 100 properties in different parts of the world from Nigeria to Dubai and the United States were confiscated from her. So also were her shares in 77 companies. However, under her stewardship, the bank reportedly experienced tremendous growth.

Okey Nwosu: The CEO of the defunct FinBank (now part of First City Monument Bank Plc) was among the five bank MDs that were fired by the CBN on August 13, 2009 on allegations of fraud and money launderin, among others.
He was accused alongside three directors of the bank – Dayo Famoroti, Agnes Ebubedike and Danjuma Ocholi in a 26-count charge centring on conversion and theft of N10.935 billion.

They denied any wrongdoing.

In January 2021, Justice Lateefa Okunnu of the high court in Ikeja, Lagos, found all the accused persons guilty and sentenced Messrs Nwosu and Famoroti each to three years in jail.

Ongoing cases

Meanwhile, there are other top bankers also facing trial for alleged fraud. They are still on trial and it is unclear how their cases will end.

They include:

Erastus Akingbola: In August 2010, the former MD of the defunct Intercontinental Bank, Erastus Akingbola, was arraigned for fraud in a 22-count charge by the EFCC.

He pleaded not guilty to all counts.

Mr Akingbola was accused of N47.1 billion fraud in what the commission described as “fictitious transactions.”

It was alleged he manipulated Intercontinental Bank’s share price and extended loans without the approval of board members.

The judge who had handled the case, Charles Archibong, had dismissed the charges for “lack of diligent prosecution” by the anti-graft agency.

In 2019, the EFCC re-arraigned him on a 22-count charge. The matter is ongoing.

Nnamdi Okonkwo: On April 28, 2016, the former MD of Nigeria’s Fidelity Bank PLC, Nnamdi Okonkwo, was held in custody by the EFCC for allegedly helping the former Minister of Petroleum Resources, Diezani Alison-Madueke, to launder about N58.2 billion.

The EFCC slammed a 14-count charge, including conspiracy and money laundering against Mr Okonkwo in a federal high court.

Charles Ojo: In October 2009, the erstwhile MD of the extinct Spring Bank (now part of Heritage Bank) was originally arraigned alongside Atuche at the Federal High Court, Lagos Division, in a N125 billion fraud case.
The suit, presided over by Justice Akinjide Ajakaiye, alleged the two bank CEOs were involved in various forms of malfeasance, ranging from disregarding due process in granting loans to some companies to manipulating share prices.

Both men have stakeS in Platinum Capital Limited, which they were said to have recklessly granted facilities worth billions of naira.

But the litigation has been bedeviled by a lot of impediments and setbacks, beginning with the transfer of the judge few months into the trial, which later culminated in his retirement.

Justice Fatimat Nyanko, who took over the case, would soon be transferred also, prompting the EFCC to start prosecution from scratch in a 45-count charge.

The case was reassigned for the fourth time before settling on the current judge, Ayokunle Faji, in February 2017 – the eighth year of the legal tussle, after Mr Saidu was relocated elsewhere.

Although a certified true copy of minutes of the 38th board of directors’ general meeting in 2008 was presented at the request of the court at a session last October, Tayo Oyetibo, the defence counsel, prayed the court to request the original copy of the document from the lender.

The prosecution objected the move, noting it could deal further blow to the suit that had already suffered three adjournments under the current judge. Justice Faji, nevertheless, heeded the plea of the defence and postponed the hearing.