I think we must remember that everything boils down to context. And we should not naively believe the claims of some people that they are the “owners” of banks- especially the listed ones.
In almost all the banks that we took over, we discovered that these so- called owner managers set up SPVs, lent money to these SPVs, turned round and purchased their own bank shares with these funds -and that was how they acquired control. In blunt terms: they STOLE money belonging to depositors to buy the shares.
When the stock market tanked and the bubble capital burst it was those deposits that were entrusted to them which evaporated and we had to redeem.
To give one example, when we went into Intercontinental Bank, the bank owned 25% of its own capital through these fraudulent schemes. Akingbola did not buy his shares in Intercontinental with his own money- he stole deposits to fund his control. He ran to the UK and we followed him with the evidence. We established before the crown court what he did and the amount involved was in excess of N140b for which the court gave a worldwide freezing order. On the basis of the same evidence in Nigeria it took 11 years but Akingbola was finally jailed.
He was not the only one. Cecilia Ibru was jailed. Nwosu was jailed. Atuche was jailed. All this happened before us and people are criticising the regulator and moralising on behalf of those who OWN banks? How? With stolen money?
One of Akingbola’s executive directors joined the bank as an officer and was his PA. Akingbola was MD of his bank for 22 years or so. All his so called EXCO were his “boys”. Ibru appointed her son ED corporate. He would approve loans for their SPVs and she would send the money to her daughter in Dubai to buy property. For 3 years Ibru’s daughter won gold medals in Dubai for being an estate dealer. She was buying the real estate with depositors funds. We recovered assets then estimated at $1.2b at cost from Ibru alone- including over 200 pieces of real estate in the UAE, including property on the Potomac, in Abuja, Lagos and Port-Harcourt and private jets. All with depositors money.
These CEOs had stayed so long no one could call them to order. Not their boards, not risk management, not audit, not Legal. In one case the Board of Oceanic was bold enough to decline a loan recommended by Ibru. After the Board declined it she came to her office and approved it and it was disbursed.
If staying so long makes some CEOs that powerful and if that power was seen to corrupt why would we allow CEOs to overstay? If all banks were run like Citi or StanChart or IBTC this matter would not have arisen but we cant run a system based on miraculous exceptions. And is ten years not enough in a CEO position? Is there no benefit to something called succession? Is there nothing like key man risk?
Banks are not a business. Dangote group and Exxon mobil are. Banking is a profession. Banks are professionals guided by ethics. A bank is where you keep your money and expect to find it. If your banker can keep your money safe and make profit by trading it that is what we want. If he starts to make it his own he has to be reminded it is not his.
If these people are so smart they should go run a cement plant or build a refinery or a commercial enterprise. Anyone can make billions stealing money entrusted to them it is not intelligence. Just plain thievery. And this is why every chance they get they just steal and buy property and private jets and yachts. It is not capitalism but prebendalism.
The arrogance begins when these bankers who own a tiny percentage of the total capital at the bank’s disposal think they own the bank. They do not. And the Central Bank is not there to protect the rich and powerful shareholders and management but the poor and vulnerable depositors who trusted us and kept their savings in these institutions. Some people just dont get it.
With the CBN the depositor is King. It is hypocritical after everything we know to pretend that these criminals are bank owners. They never were. And to make the system safe we have to learn lessons and not wait for the next Akingbola or Atuche or Ibru to happen on us.
It may well be that someone else sitting in that office with all this information may have ideological sympathies for shareholders and management and believe I had gone overboard in protecting depositors.
My comment is that such a one should be at the stock exchange and not the central bank. Term limits are among the policies I am most proud of and yes- we demystified all the minigods and oligarchs. But none of them was a target.
The only target was to protect depositors and keep our banks safe.
I am publishing my CBN memoirs next year inshaallah. The title is ” Confronting vested interests: Central banking in a rentier economy”. The title says it all.
SLS
