The Sanusi Revolution (2)

The shocking story continues of how the former governor of Nigeria’s Central Bank, Chukwuma Soludo connived with the Bank executives to ruin the Nigeria Banking System and destroyed families and people’s investment then left Sanusi Lamido Sanusi to clear the rot. “As far as I know, the so called key shareholders and bank executives that ruined these banks do not deserve a place again in the institutions but should find their place in jail or even be shot dead.” – Sanusi


Background by Dayo Coker Contd (See Part 1)

Barth Ebong

Only a powerful witchdoctor could have known that Union Bank was in trouble. Long criticised for its horrendous customer service and aversion to technology, its chief executive was neither ostentatious nor publicity-hungry. As the oldest bank chief, he had a measure of
gravitas which turned out to be a mask for incompetence.

With the benefit of hindsight, one should have guessed something was wrong with the big, strong and reliable bank when last year, in response to a campaign to force its chief executive to resign, the board moved its AGM to Maidugri, effectively disenfranchising the bulk of the bank’s shareholders. Union Bank also stunned analysts when it agreed to underwrite half of Afribank’s overpriced public offer. Now it turns out that the dour Ebong also gambled heavily on high risk sectors.

It is now clear that years of mismanagement had turned the bank into a corporate cadaver. So far, Union bank’s loan recovery efforts have yielded little fruit when compared to Intercontinental, Oceanic and Afribank. The authorities must also investigate how the trio of Nike Akande, Jite Okoloko and Festus Odumegwu ended up on the bank’s board of directors.

Sebastian Adigwe

Many analysts believe that Afribank’s current problems stem from its relationship with African Petroleum. The bank was heavily involved in financing Femi Otedola’s takeover of the petroleum marketing company and the huge debt added to its woes. The two firms forged a strong relationship that resulted in Adigwe joining AP’s management board while Osa Osunde, an alleged front for Lucky Igbinedion, doubled as Vice-Chairman of AP and Chairman of Afribank. Apparently, the effete Adigwe was a figurehead who pandered to the whims and caprices of the bank’s powerful backers. A few weeks to the CBN action, Afribank took out paid advertisements congratulating Ogbueshi Uche Luke Okpuno, one of its prized clients who later showed up on the CBN’s debtors list. How interesting.

Okey Nwosu

FinBank raised more than 100 billion from its public offer and invested heavily in the oil and gas sector. The bank clearly had no long term strategy and one wonders if Mr Nwosu believed that oil prices would hit 400 dollars. A week before he was sacked, the suave Okey Nwosu approved a loan to Jevcon Oil and Gas.

It was widely celebrated as a testimony of the bank’s devotion to indigenous operators in the maritime business. Amazingly, Jevcon shows up in the CBN list of debtors. Dr Onyung, Jevcon’s chief executive, has not issued any public statement to counter the CBN’s
claims. What was Mr Nwosu smoking?

Ndi Okereke Onyiuke and Musa Al-Faiki

Ndi Okereke-Onyiuke is an amazing creature, a corpulent buffoon who somehow clawed her way to the zenith of Broad Street while earning a dubious professorship. It is hard to understand how she kept her job after she publicly claimed that CNN and the Internet caused the stock market crash.

While the NSE is a privately-owned organization, it is now clear that Okereke-Onyiuke has no business at the helm. For years, she has allowed the Exchange to be controlled by compromised acolytes and highly-placed insiders. The case of Mallam Musa Al-Faiki is a cautionary tale.

The former SEC DG was hopelessly out of depth during his five year tenure and did little to stop the widespread abuse in the market. Part of Mallam Al-Faiki’s problems was that he owed his position to Madam Onyiuke’s friendship with President Obasanjo. The vacillating SEC DG clearly did not want to offend his benefactor and when SEC staffers like Charles Udora, leaked their critical views to the press, he was always quick to issue a
quick retraction.

The Talented Peter Ololo

Two years ago, one of Okereke’s aides told me about Peter Ololo, whom he simply called Falcon. The aide was starry-eyed as he described the powers of this mythical “Falcon”, who could effortlessly double the price of First Bank stock within a month. Today, Peter Ololo is in EFCC custody.

He owes 88 billion. Like every smart businessman, he filled his firm’s board with power brokers such as Senator Tunde Ogbeha and Senator S.A Otegbola. Unfortunately, the indolent Nigerian press has not really scratched the tip of Ololo’s schemes.

In addition to Falcon Securities, the disgraced accountant also controlled two active publicly listed companies, DEAP Capital Management and Trust and DVCF Oil and Gas Fund.

These companies were empty shells whose complex schemes were powered by insider trading and exploitative business models. If Mrs Waziri’s EFCC is serious about sanitizing the sector, it wouldn’t be a bad idea to question the chief executives of these two fund management firms.

Fit and Proper Person Test

Nigerian regulators must adopt a system of screening bank executive directors to ascertain that they are of sound mind and body. Private investigators should be hired to pry into their backgrounds and their educational and analytical skills must be evaluated by an impartial panel. People should not be appointed to highly sensitive positions because of ethnic politics and tenure. I believe that such as test would have shown that Mrs Ibru, Mr Akingbola and Mr Ebong were not suited to the task of managing their respective financial institutions.

The Case for a Financial Services Authority

Perhaps the CBN, NDIC, SEC and other agencies should seriously consider the idea of establishing a Financial Services Authority to supervise the financial sector. The head of this agency must be chosen through a transparent recruitment process that has nothing to do with
ethnicity, religion and other petty considerations. If the head hunters conclude that no Nigerian is suitably qualified, the government should
consider foreigners for the post.

During the stock market bubble, a shocking thing happened. Pyramid schemes, commonly known as “wonder banks” sprouted in droves and earned the patronage of even highly educated bank managers who allowed greed to cloud their judgement. While they were eventually closed down, the SEC and the CBN has still not resolved the matter. An effective FSA could have nipped this development in the bud.

Vanguard newspaper and the Northern Agenda.

Unbelievable!!! In what must be a contender for this year’s most stupid argument, Vanguard has backed its campaign against Sanusi with an article it published in March detailing a supposed plan by anti-consolidations to take over five Nigerian banks. I don’t understand why the
Nigerian public is taking this rag sheet seriously when Sam Amuka-Pemus tissue paper
 newspaper does not even qualify to be called a tabloid.

Let’s look at the timeline. Vanguard published the article on March 23, 2009. At the time the article was published, those five banks were already heavily indebted to their peers at the inter-bank market and there were already concerns over their financial health.

In fact, Dayo Coker was already on the trail of Erastus Akingbola and had released his findings to the press. Their chief executives must have suspected that Sanusi would be a tough cookie and quickly dispatched their PR strategists under the aegis of ACAMB to plant the story.

Of course, Vanguard’s moronic journalists played along and concocted this baseless story to distract the new governor. The article was meant to pre-empt Sanusi and force him into making a compromise but he refused to buckle under pressure. The Nigerian public does not understand that Vanguard newspaper is one of the biggest beneficiaries of the corporate malfeasance that pervaded the Nigerian banking sector.

For years, the newspaper made a killing from the Vanguard Bankers Awards where a table for eight went for a whopping five million naira. From a logical standpoint, this northern agenda argument holds no water.

As the CBN Governor has pointed out in newspaper interviews, some Nigerian banks are controlled by nominees who are hidden behind legal documents. One does not have to be a chief executive to actually control a bank.

It is possible that there could be individuals from the North that have designs on the banking sector but it makes no sense to speculate that a Northern “movement” is keen on hijacking the banking sector. And if Sanusi is a Fulani supremacist as his detractors have argued, then it is likely that non-Fulani Northerners are unlikely to support this purported plan.

Opinion and Analysis

I doubt that Sanusi Lamido will be successful in ridding the financial sector of the crooks that call the shots. My pessimism stems from the
experiences of other reformist crusaders that have tried and ultimately failed to change the status quo in this dystopian conundrum called Nigeria . His job will be made harder by his colleagues at the central bank.

They understand how the system works and may not be committed to his disruptive agenda. Sanusi’s dalliance with the EFCC might reap short term dividends but anybody who understands the workings of Mrs Waziri’s EFCC knows that the agency is simply using this God sent opportunity to con Nigerians into believing that it is serious about the anti-corruption war.

We must also consider the legal angle. Senior lawyers have told me that it is difficult to prosecute debtors when there is no evidence of fraud in the loan disbursement process. This explains why hardcore debtors such as Ike Okolo’s Aquitane Oil and Gas have ignored the EFCC and opted to hire legal heavyweights to defend them. In spite of the EFCC’s public relations blitz, other notable debtors such as the imperious Peter Odili have also headed to court. The CBN has done the right thing by releasing the list of debtors whose loans are not performing.

The composition of the list shows that there is a problem with Corporate Nigeria. Some of our most respected business leaders showed up on this list. I’m surprised that Alhaji Aliko Dangote and other respected Nigerian businessmen could brazenly decide to connive with these banks to short-change small investors and depositors. What if the banks had collapsed?

The banks didn’t help matters with their dubious interest charges. They basically gave debtors an excuse to stall. 

August 14, 2009 and the raging debate

:On Friday, August 14, 2009, a bow-tied and bespectacled Fulani prince convened an extraordinary meeting and sacked the executive directors of five Nigerian banks. The television footage made for gripping prime time drama. One could hear a pin drop as the funereal Governor of the Central Bank solemnly ended the careers of his former colleagues. He calmly looked into the flashing cameras as he listed the executive directors whom had been affected. 

With those softly-spoken words, Mallam Sanusi Aminu Lamido Sanusi became the most polarizing figure in Africa’s most populous country. By midday, it became Sanusimania as the privileged digerati and news hungry Diaspora crowd joined in the debate. That evening, the largely unemployed roadside analysts nearly came to blows as they argued and passed around copies of PM News.

The cold war between the bourgeois and the masses ensured that the news was received with glee among the lower classes. The wave of schadenfreude was plain for all to see. For the ordinary man on the street, this was a fitting end for the criminals who had colluded with kleptocratic politicians. As I wound down my car window to pick up the popular evening tabloid, a swarthy man dressed in a dirty suit bashed his tattered briefcase against a wall and said to no one in particular, Let him sack all of them. It was a truly visceral sight.

The verbal sparring started the next day as Mr Sanusi single-handedly drove the news cycle and brought smiles to the faces of long suffering vendors. The country was already abuzz with conspiracy theories and very few people were still on the fence. These Hausa cows will ruin our economy, suggested one debater. Forget the ethnic stereotypes, another replied. The man is the real deal nonsense, proclaimed another doubter. I knew that man had an agenda when I heard that he quit a lucrative job to go and spend six years in the Sudan. He is a Boko Haram jihadist. Have you actually read his essays? a supporter countered. Sanusi is a moderate Muslim who is even loathed by the Northern establishment.

The battle lines had been drawn and six weeks after, the country is still divided into two camps. On one side are Sanusi’s supporters who argue that the financial sector needed a life saving surgery; on the other side are those that argue that it was an ill-advised action motivated by revenge, and part of a wider conspiracy. This group has been egged on by a lunatic fringe which suggests that Sanusi sacked the bank chief executives because they had supported Christian pilgrims and tried to encourage the growth of businesses in the southern part of the country. These loonies defend their echolalia with a Photostat copy of a prophetic edition of Vanguard. 

The shock continues. Those name you respected and probably loved are the same ones killing you softly in Nigeria. More exposes still. 

To be Continued 

Read also The Sanusi Revolution (See Part 1)