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Following the declassification of the list of former directors of the 13 banks that failed due to insider credit abuse, the Senate Committee on Drugs, Narcotics, Financial Crimes and Anti-Corruption has written to the Economic and Financial Crimes Commission (EFCC), demanding a report on the prosecution of debtor directors who have been found culpable.
THISDAY, however, learnt last night that the chair of the anti-grant agency, Mrs. Farida Waziri, has already directed EFCC operatives to start the processes of the prosecution of the indicted directors.
EFCC spokesman, Mr. Femi Babafemi, confirmed the development to THISDAY last night.
The Senate Committee wants the report by the sleaze watchdog to detail its efforts to recover the outstanding N48.6 billion from the debtor directors some of whom have begun to make plans to liquidate the debts against the backdrop of reported plan by some senators to move a motion calling on relevant agencies of the Executive arm to prosecute them.
Barring any hitches or change in plans, the motion, which has put the debtor directors under pressure, will be moved this week.
The letter, which was addressed to Waziri, dated July 7, 2009 and entitled: “Insider Credit Abuse by Directors of Failed Banks”, was signed by the Committee Chair, Senator Sola Akinyede.
In the two-page letter, the Committee gave Waziri seven days to furnish it with the report. The deadline expires Thursday this week.
The letter read: “At the sitting of the Senate on Tuesday, 7th July, 2009, the issue of insider credit abuses by directors of failed banks was discussed and the names of erring directors were disclosed. The Senate was shocked by the degree of the abuses and the staggering amounts involved.
“Having regard to the powers of the EFCC under the Economic and Financial Crimes (establishment) Act, 2004 particularly Section 7(2) (c) (d) and (f) which provides that:
“In addition to the powers conferred on the Commission by this Act, the Commission shall be the coordinating agency for the enforcement of the provisions of:
“(c) The Failed Banks (Recovery of Debts) and Financial Malpractices in Banks Act, as amended;
“(d) The Banks and other Financial Institutions Act 1991, as amended;
“(f) Any other law or regulation relating to economic and financial crimes including the criminal code and penal code.”
The Committee said it would like to be “furnished with a report on what the Commission has done so far with a view to ensuring the recovery of outstanding sums and/or prosecution of those who have been found culpable.”
The letter further read: “Please, furnish the Committee with the report within seven (7) days of the receipt of this letter. The Chairman is assured of my kindest consideration and highest regards.”
THISDAY learnt that the letter was written by the Committee to bolster the efforts by the Senate Committee to mitigate the agonies of depositors of failed banks in the country.
The move, as further learnt, was to widen the scope of legislative push for urgent executive actions for the recovery of the debts and prosecution of debtor directors that had been found culpable of financial malpractices.
The debtor directors were reported by the Nigerian Deposit Insurance Corporation (NDIC) to have used their insider knowledge of the banks while they were operating to secure a total of N53.3 billion loans, many of which were not collateralised.
Some of the loans were secured with personal guarantees of the debtor directors, original certificate of occupancy of landed property, equitable mortgage on buildings, debenture of fixed and floating assets, and credit bond, among others.
The NDIC had, as of last Tuesday when the Chairman of the Senate Committee, Senator Nkechi Nwaogu, reeled out the names on the list on the floor of the Senate, recovered N4.722 billion from the debtor directors.
The Committee had summoned the Central Bank of Nigeria (CBN), the NDIC and the debtor directors to a meeting scheduled for this week in Abuja. The meeting, as learnt, is aimed at recovering the outstanding N48.6 billion debt.
But Nwaogu had last week, at the West Africa Regional Conference on Smart and Appropriate Technologies for rural Communities, disclosed that the N53.3 billion owed through insider credit abuse was part of the over N188 billion depositors’ funds trapped in failed banks.
According to her, “If you notice the figure in question, the people we are talking of now are the former directors and managing directors and chairmen board of directors of those banks that failed.
“We are not talking about people who borrowed money from the banks in the course of their doing business. No! And we are saying that it is not fair for these directors, including insiders privileges, to borrow so much money for one thing or the other and at the end of the day these banks died and they died with customers' money.
“Can we now ask over 60 per cent of the population who do not have bank accounts to go and have bank accounts and blame them for putting their money under their pillow cases?
“Then, will it be nice when they put their money (in the banks and) at the end of the day, these banks go underground deliberately or not deliberately and they are not paid their deposits.
“Four years down the line and the people who borrowed through the back doors are unable to pay. What the Senate is saying is that we must begin to be our brothers’ keepers. We must sanitise.
“We are talking of rebranding; we must rebrand from within; we rebrand from ourselves; and, some of these people or board members are now real big men with new portfolio. Is it right?"
She had reportedly called on the CBN and the NDIC to pay the depositors to assuage their sufferings because the aggrieved had been bombarding the National Assembly with petitions.