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Former Power Minister, Prof. Barth Nnaji and others to face the law for Bank debt – CBN

By on September 24, 2012

CBN Governor, Lamido Sanusi

The former Power Minister, Prof. Barth Nnaji and other debtors amongst who are Femi Otedola, Alhaji Sayyu Dantata, Sir Johnson Arumemi-Ikhide, are to be handed over to law enforcement agents if they do not pay off their debts. Other debtors are Mrs Elizabeth Ebi and Dr. Wale Babalakin whose firms, directors and shareholders were excluded from securing additional loans from local banks ought to be prepared for a bigger storm.

The Central Bank of Nigeria (CBN) at the weekend, announced that debtors, as well as their firms would be would face the wrath of the law, if they do not pay off their loans, they will be handed over to law enforcement agents to take it from there. Based on report published in one of the national dailies last week not fewer than 113 companies and 419 directors/shareholders were listed.

Ugochukwu Okoroafor, CBN public relations officer in a special report stated that should the debtors fail to repay their loans; the apex bank will engage the law enforcement agents to pull off full recovery, to guarantee financial solidity, as well as implant discipline in the banking sector. “We are a bank, not law enforcement agent. Should these debtors fail to repay their loans, law enforcement agents will take care of it for us,” he said.

A top CBN official, who appealed anonymity, also clarified that CBN had to bar the debtors from additional credit, to allow them honour their responsibility, adding that CBN  decided to use expose them since it is the only way the debtors will be obliged to honour their contract.

Mustafa Chike-Obi, Managing Director, Asset Management Corporation of Nigeria (AMCON), declined comments on the matter saying, it was out of his jurisdiction, that it was a CBN matter.

Last week the CBN banned banks from giving out further credit to the affected persons and their companies. This action was necessary owing to problems the AMCON is having with the debtors, taking over bad loans valued at N3.4 trillion from the banks.

CBN’s Director, Banking Supervision, Mrs. A. O. Martins, in a written report said: “It has become necessary to stop debtors who failed to repay their loans to banks and had these loans subsequently transferred to AMCON, from further enjoying credit facilities from Deposit Money Banks (DMBs), until they fully repay agreed outstanding to AMCON.”

The CBN has however, made it a rule that any bank that fails to operate within the set guidelines for loaning would be compelled to make a 100 percent refund of the total principal and outstanding in the account of the customer and related parties as well as other penalties the CBN aggress on.

The report presented by CBN showed that NITEL, Zenon petroleum, MRS Holdings, which is owned by Dantata are indebted to the tune of N71.547 billion, N192.4 billion and N119.98 billion respectively. Others are Seawolf Limited – N98.32 billion, Capital Oil and Gas Limited-– N48.014 billion and Arik Air Limited, belonging to Arumemi-Ikhide – N85.481

CBN likewise engaged banks to avoid further credit to Cross River and Zamfara States for the reason that the Tinapa Business Resort has failed and Accountant General, Ministry of Finance, Zamfara to settle up loans taken correspondingly.

One Comment

  1. Kingslive

    September 25, 2012 at 7:16 am

    Okay, Okay! Cleaning the Augean Stable with pure water ba! I get it! Now, lets look at this holistically, first Sanusi says, the banks were in wrongdoing in giving out loans, mismanaging funds bla, bla bla. Yes, I agree all of these were true no doubt, but like I have often said, and will continue to say, an entire department exist in CBN that is meant to cater for Banking Supervision what happened there? Nothing! There is also Risk Management, which assess, monitor and supervise risk for large loans given by Bank, and where happened there? Nothing as well. Now, we are back again, this time chasing after Debtors and tell us that there are dubious directors et cetera. Heads must roll for all of this, the debtors, bank chiefs, department head and directors at CBN, people from CAC, the list goes on and on. But if the CBN Governor wants to keep cleaning his Augean stable with pure water, then he should be my guest. Because just has his father taught him never to apologize when he is not wrong, mine also taught me that you do not take the back of the tree for the tree and that a bad produce is the result of many underlying factors. DO THE RIGHT THING!