Red Alert! Security beefed up around Goodluck Jonathan

Security agencies including the State Security Services (SSS) and the Nigerian Police may have increased the security alert threshold of the acting President, Dr. Goodluck Jonathan.
“As it is with matters relating to security, the security agencies have beefed up security around the acting president because of the increased threat level to the person of the acting president,” an official said.
Though the state’s official would not give a reason for the increase in the threat level to the acting President, there are indications that events since the dramatic return of ailing President Umaru Musa Yar’Adua may have heightened security tension in the land.
“You know that there is a silent probe of strategic security officers of the presidential villa like the chief security officer to the president, Yusuf Mohammed Tilde and Yar’Adua’s aide-de-camp Mustapha Onoyveta and some other security details, this coupled with some other controversies still going on in the country, it is generally believed in security circles that the situation remains quite tempting for ambitious or aggrieved characters to want to take it out on the acting president. So, for me, I think these are some of the reasons the security alert around the acting president must have been increased.

Rilwanu Lukman: The Controversial Mr. Fuel Scarcity

“Time will tell!” This is one of the elder’s saying when there is a major controversy over a particular issue or a person, what they are saying in essence is that there is no offence in waiting for the person to come up with proof and true picture that will provide the basis either for rejection or acceptance of the good or bad allegations against him/her.
This is the case of Nigeria’s longest serving Petroleum Minister, Hon. Minister of Petroleum Resources, Dr.Rilwan Lukman, who was appointed by the present ailing President of Nigeria, Umaru Yar’Adua in the late 2008 after a cabinet shake-up in which 20 ministers were relieved of their positions.
He has a very rich academic background that will earn him accolades anywhere in the world. In Nigeria, his visibility in the corridors of power with one appointment or the other provides support and breakthrough for successive presidents to put him in a sensitive position of higher responsibility.
However, in reality and in practice, the opposite is always the case when it comes to assessment of his performance in office. And that is why most analysts have described him and former governor, Dr. Sam Egwu as the worst ministers in President Umaru Yar’Adua’s cabinet.
Lukman has severally been criticized by eminent Nigerians for accepting to serve as Minister of Petroleum when his name was submitted to the Senate in 2008 because of his long stay in the corridors of power and his health condition which Nigerians don’t know. On his health condition, a petroleum industry insider submitted that “Dr.Lukman must have been really touched by the national embarrassment caused by the fuel scarcity, but I can tell you that nothing will happen to the management of the NNPC even if the scarcity lasts for another 12 months. His ties with the NNPC Managing Director, Mohammed Sanusi Barkindo can be traced years back, and besides, the old man is not exactly in good health shape to take the fuel crisis head on.” He has his excuses, though, of travelling abroad for one international conference or most often for medical check up.
His power acquisition story started when he was appointed by the then former Head of State, General Muhammed Buhari in 1984 as Federal Minister of Mines, Power & Steel. He also lobbied his way into the cabinet of General Ibrahim Babangida as Federal Minister of Petroleum Resources of Nigeria between 1988 and 1989 and as President of the Organization of Petroleum Exporting Countries (OPEC).
He was Minister of Foreign Affairs of Nigeria,1989-1990, Chairman, Board of Directors, National Electric Power Authority (NEPA), Lagos,1993-1994, Secretary General of OPEC, Austria,1995-2000, Presidential Adviser on Petroleum & Energy, Nigeria,1999-2004, Pro-Chancellor & Chairman of Council, Nasarawa State Univeristy, Keffi, Nasarawa State, Nigeria 2004 – date, honorary Presidential Adviser on Petroleum & Energy, Nigeria, 2007-2008. Chairman, Presidential Committee on Oil & Gas Reform, 2007-2008. Now he is the Minister of Petroleum Resources of Nigeria since 2008 till date.
As at the time of his appointment in 2008, it was exactly five years when former President Olusegun Obasanjo removed him as Presidential Adviser on Petroleum & Energy when he could no longer contain his failed “chicken” policies responsible for the incessant fuel scarcity between May, 1999  and September, 2003, and then the establishment of Petroleum Products Pricing Regulatory Authority (PPPRA).
Suddenly, after his unceremonious replacement with Dr. Edmund Daukoru as Presidential Adviser on Petroleum, fuel began to flow in all the filling stations as marketers embarked on fuel importation to support output of the refineries belonging to the Nigerian National Petroleum Corporation (NNPC). Within a short period, Nigerians, particularly Lagosians forgot the pains of long queues for fuel until recently. We should not forget cases of kerosene explosions in Lagos and Benin during the period and performance of the refineries below 30 per cent which led to the sack of several top shots of NNPC by Jackson Gaius-Obaseki, former GMD. This particular action was carried out by Obasanjo without his consultation. In response to the protest, he was advised to resign.
Perhaps, in some quarters these days, they prefer to call Lukman “Mr. Fuel Scarcity” and to support that label, he travelled out of Nigeria during Christmas holiday despite the directive of the then Vice President, Goodluck Jonathan that he should stay back during the holidays so as to ensure improvement in fuel supply. His cronies that cut across both upstream and downstream sub-sectors of the Nigerian oil and gas industry fear him like God to avert his wrath on suspicion of disloyalty. And to compensate loyalty, he is good at giving them appointments that will sustain the relationship. One of such loyalty appointments recently was the confirmation of Dr. Bello Gusau as executive secretary of Petroleum Directorate in January 2009, even though the National Assembly is yet to pass into law the Petroleum Industry Bill (PIB) that gave birth to the directorate. Today, Gusau, a member of the Oil and Gas Implementation Committee (OGIC) is a senior government official managing an illegal office not approved by law yet.
Another beneficiary of Lukman’s loyalty is Dr. Barkindo Sanusi Mohammed, GMD of NNPC, who was technical assistant and later acting secretary general of OPEC. The controversy still rages in the petroleum ministry over his appointment by Lukman as governor of OPEC along with his position as GMD of NNPC. This position since joining of OPEC by Nigeria is reserved for the permanent secretary of the Ministry of Petroleum Resources. And for protesting against the appointment of Barkindo as governor, the former permanent secretary was redeployed and later retired last year. It is also good for the record to mention the recent appointment of former Head of Media at OPEC secretariat in Vienna, Austria of Mr.Umar Farouk as his special assistant on media and communications. The appointment, according to industry sources, is temporary because the actual target is for him to be the spokesman of the NNPC.
To ensure that he has his boys in control of the downstream sub-sector, Dr. Abiodun Ibikunle, technical assistant was also appointed recently as the executive secretary of PPPRA. And that is why the ostentatious stakeholders forum organized by the NNPC having Lukman as Chairman barely a week after the forum organized by Mr.Odein H. Ajumogobia, Minister of State for Petroleum Resources, who was saddled with the responsibility of downstream sub-sector a week before the departure of Yar’Adua for medical treatment in Saudi Arabia. However, three weeks after the forum, Nigerians now stay longer at the filling stations to queue for petrol.
And for those that refused to play along with him, the reward is denial of appointments. Indeed, he always ensures they are far from getting any key position and that is the case of Dr. (Mrs.) Donu Kogbara, former member of OGIC from Rivers State.
If his refusal to honour  the invitation by the Senate on four occasions and the fine of =N=4,000 he was asked to pay last year is an indictment that will remain in his file, what will be the fine for supporting the NNPC to create shortfall in fuel supply? If in reality, it is clear that NNPC can only supply 47 per cent of the daily demand requirement of fuel, why will Lukman support several lies of former TV talk-show hosts on NTA – “The Sunday Show,” Dr.Levi Ajuonuma, Group General Manager (Public Affairs) that the corporation has 31 cargoes of fuel on the high sea when there is actually none.
If all is well in the oil industry, National Assembly should ask “Mr. Fuel Scarcity” why NNPC cannot support multi-national oil companies in early completion of damaged gas pipelines after the amnesty deal so as to increase gas supply to the power generating stations of the Power Holding Company of Nigeria (PHCN)? It is clear that the failure of the Federal Government to achieve 6,000mega watts (mw) target on December 31, 2009 lies with the NNPC under the direct supervision of Dr.Rilwan Lukman. He should be held responsible for the failure of the 6,000 mega watts (mw).
At this stage, what is good for him is to resign voluntarily because when the pressure of problems created by his expedition for power becomes too much for him with his fragile health condition, the beneficiaries of his office, would not be able to help him hedge on to power. The sudden withdrawal of support by former President Obasanjo for Yar’Adua should serve as a lesson.
The feeble Dr.Rilwan Lukman will do better as an adviser and therefore it is better for him to join the Eminent Elders Group and allow talented, skillful, agile and energetic young Nigerians like Kola Karim, Femi Otedola, Uche Ogah, Sayyu Dantata and the amiable Wale Tinubu to manage the petroleum industry. He should stop providing cover for NNPC in the mismanagement of our crude oil resources. There are several Nigerians from the North if Yar”Adua must insist on producing a Minister of Petroleum for the region. And that is why the Senate should take the lead to sustain the plans to move Nigeria forward by taking a cue from the success of Oando PLC, Shoreline Energy Int’l by young Nigerians. The hope of Lukman lies in the quick recovery of the ailing President for him to remain in office. Lukman should quit the stage while the ovation is loudest.

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PEN ROBBERS! NDANUSA, MAI NASARA ILO IMPLICATED IN LOOTING FIFA U-17 N12BN HOSTING FUND

Background to Record Setting Swindle

Nigeria’s hosting of the 2009 FIFA under 17 World Cup championship otherwise known as Nigeria 2009 may have turned out to be a record setting swindle by officials of the National Sports Commission (NSC) and the Local Organising Committee (LOC) responsible for organizing the successful hosting of the tournament.
Soon after the conclusion of the football tournament on November 15, a rash of protestation and public suspicion heckled the quality of organization deployed by both the LOC and the NSC in hosting the tournament in Nigeria. Not a few sports stakeholders had questioned the total N12billion reported by the LOC to have been spent on hosting the tournament. The LOC was managed by Mr. Mai Nasara Ilo in the capacity of the chief executive while the supervising Ministry of the LOC, the NSC, was under the charge of Engr. Sanni Mohammed Ndanusa, chairman of the NSC and the country’s Minister of Sports.
The truth (as new facts are unfolding) suggests that the hosting of the tournament represented different motives for FIFA, the global governing body of the game of soccer and the Nigerian Local Organising Committee, the adhoc body set up to manage the hosting of the tournament.
Insider sources at the LOC swore that FIFA administrators had to go out of their ways to support when they realized in the run up to the tournament that the organization of the event was headed for a possible embarrassing failure to it. This contrasted to the reported approach of the top echelon of the Nigerian LOC who were said to be determined to cut corners for personal gains in putting together the tournament.
At the end, the Nigerian government was presented with a N6billion debt supposedly arising from the hosting of the tournament, this is besides the N9billion initially approved for the LOC by the Federal Government and an additional N3billion doled out to the LOC just about two days to the kick off of the tournament on October 14. The additional N3billion was given out to the LOC on account of the various scenarios of failure painted by the LOC to throw the Federal Government into the scare mode.

What the Security Agencies Are Discovering

400 PEUGEOT CARS DIVERTED

The State Security Service (SSS) and the Economic and Financial Crimes Commission are reported to be involved in unearthing the shady deals that characterized the expenditure incurred during the hosting of the tournament.
Reports indicate that the reviews of the expenditures undertaken by the LOC as approved by its supervising ministry are becoming mind-boggling by the day.

The truth (as new facts are unfolding) suggests that the hosting of the tournament represented different motives for FIFA, the global governing body of the game of soccer and the Nigerian Local Organising Committee, the adhoc body set up to manage the hosting of the tournament.

A major troubling question that is yet to be properly answered by officials of the LOC and NSC is, how a fleet of 400 Peugeot cars ordered and duly paid for by the NSC simply disappeared into the air? A source in the then LOC confided that even as everybody awaited the delivery of the vehicles, nobody can, till this moment, explain how the cars were diverted.
“It is one of the major questions the security agencies are trying to resolve,” the source said.
“Except for the purchase of high budget SUVs that the top management of the LOC bought for themselves, there was a paucity of mainstream transport for the tournament, of course, the expected Peugeot cars had been diverted, it was again FIFA that came to the rescue when it imported a fleet of 78 Hyundai cars into the country to serve the transportation needs of middle ranking officials of FIFA and the LOC; so again, where did they spend the N13billion they collected?” the source further queried. “Matters usually get to a head when the LOC had to hire vehicles to convey its officials when the FIFA vehicles were not available.”

UNAVAILABILITY OF TRAINING AND COMPETITION PITCHES

A bewildering scandalous angle to emerging revelations is the failure of the LOC to invest in building training and competition pitches.
It would be recalled that a contract was awarded for the upgrading of the country’s stadia for a very huge amount to Mallorca Nigeria Limited over six months before the commencement of the tournament, and after several visits by FIFA to ascertain its worthiness, only disappointment awaited them.
An LOC insider said that matters got a to a head in this regard so much that Engr. Ndanusa himself had to make it a part of his morning chores to rush down to the Abuja stadium to water the pitch.
“This is because he holds a heavy interest in the company that was awarded the contract to upgrade the pitches,” the insider gushed.
“We know that in a desperate effort by FIFA to justify the granting of the hosting right to Nigeria, they were ready to do anything. In the face of the obvious failure of the LOC to provide the required four training pitches in each of the hosting city, FIFA had to reduce the standard requirement from four to two pitches and was compelled to provide two synthetic training pitches and donated them to the LOC. We also know that most of the other synthetic pitches used during the tournament in the eight centres were funded and provided by Governors of the states in which those centres were located. The centre are Abuja, Bauchi, Calabar, Enugu, Ijebu-Ode, Kaduna, Kano and Lagos. Now, tell me where they spent the billions they collected,” a security agency insider queried.

FIFA WAS ALSO FORCED TO PROVIDE ACCOMMODATION EVEN FOR NIGERIAN OFFICIALS

“This is beside the fact that FIFA arranged and paid for the accommodation and feeding of all the participating teams including even officials of the LOC. I know that Mr. Sanni Lulu, Chairman of the Nigeria Football Federation and Mai Nasara Ilo, the LOC CEO himself stayed in rooms provided by FIFA at the Transcorp Hilton. Yet the LOC claimed it paid two point something billions on providing accommodation,” the source further revealed.
“What has also been revealed is that the LOC neither purchased nor installed any public address system in any of the stadia used for the tournament. Even the CCTVs that were supposed to be installed in the eight hosting states to enhance security of participants were only installed in Abuja. What happened to the money earmarked for both the importation and installation of the CCTV?” the security source wondered.

N37MILLION FOR TERMINAL DEDICATED TO NIGERIA 2009 AT NNAMDI INTERNATIONAL AIRPORT

As part of standard practice, a space is usually secured in the airport of the capital city of the hosting country’s where all participating teams and officials will arrive and depart from. To create this space, it is reported that the LOC claimed that it forced out a princely N37million. The sum went into partitioning the space, spending N7million for its perimeter fencing, fixing the toilet and laying tiles on the floor of the space dedicated for the Nigeria 2009 terminal.
“The LOC claimed they paid the sum of N7million to wash the space, we are not talking of the whole airport here, just the space,” the insider said.

WHAT HAPPENED TO 700 WALKIE-TALKIES BUDGETED FOR?

To ease communication between and among LOC officials, the LOC made orders for the delivery of 700 walkie-talkies. There is strong evidence to show that payment was duly made for the purchase of these walkie-talkies but all through the course of the tournament, none of the walkie-talkie was delivered, rousing suspicion of diversion.

WHEN UPS BECAME INVERTERS

Inverter is the new technology introduced to Nigeria to help assuage the continuing power problems ravaging the country. The management of Nigeria 2009 LOC also decided to adopt the new technology to support its computer network and other communications infrastructure.
Report affirmed that all the idea for using inverter turned suspicious when officials of the LOC only saw that they were units of UPS that were delivered instead of the more expensive inverters that had been paid for.

HUMILIATING FIFA’S PRESIDENT

Nothing would rankle the sensibility of the average Nigerians than the revelation that Mr. Sepp Blatter was left stranded at the Nnamdi Azikwe International Airport when he arrived the country two weeks to the commencement of the tournament.
“When the FIFA President arrived the country at about 10 p.m. there was nobody at the airport to receive him and his aides. In fact, private arrangements had to be made to convey him from the airport at about 11p.m.
“Perhaps, it was for this reason that FIFA determined to bring into Nigeria all provisions for the use of its about 230 officials, these included security gadgets and transportation,” the insider said.

WHO GETS N250, 000?

Part of the remuneration for officials of the LOC was the specific provision of N250,000 to be paid LOC board members as monthly seating allowance. Reports indicate that while the management of the LOC insisted that each member of the board was paid this stipend every month for six months, all members are denying receiving such payment for the period.

LOC SEND FORTH PARTY AND FIFA’S $5.5MILLION MARKETING GUARANTEED FUND?

Same source revealed that FIFA had released the sum of $5.5million generated from marketing activities related to the hosting of the tournament. Even in the face of claim of N6billion debt resulting from the hosting of the tournament, the LOC is reported to be planning to spend a sum of about N12million on a send forth party for officials of the LOC that had been disengaged weeks after the conclusion of the tournament.

WHAT THEY HAVE TO SAY

At the NSC, our correspondent was told that the Commission or its chairman cannot be responsible for activities of the LOC because it was an independent body and administered as such.
At the EFCC, Fortune&Class Weekly was told that the agency was continuing in its investigation of the organization of the championship.
Several calls to the mobile telephone number 08037881673 belonging to the LOC’s CEO, Mai Nasara Ilo were not picked or returned.

Afribank: New Directors accused of financial recklessness

Replace all tellers in the bank with OND holders
There is a growing groundswell of ill-sentiments among members of staff of Afribank Plc against the Central Bank of Nigeria’s appointed management team of the bank. The staff, across ranking strata, have accused the Managing Director of the bank, Mr. Nebolisa Arah and other Executive Directors of going on a spending spree when their primary task in the bank, predicated on the CBN intervention was that of recovery.

 Aggrieved staff of the bank protested that despite the parlous state of the liquidity position of the bank, as painted by the management team, the Managing Director and his Executive Directors decided to grant to themselves, loans of up to N25million to purchase vehicles for their personal official use.

“This is simply ruinous, I must tell you,” one of the bank’s senior staff said. “These people were appointed to lead the recovery effort of the bank and that supposes cost saving and limitation on expenditure.

“You can imagine how we felt when we got to know that the directors have approved for themselves the sum of N25million each to purchase official vehicle. Is this supposed to be cost cutting or sheer wastefulness? Of course, we are aware that when the erstwhile directors were sacked, they were not allowed to go away with their official cars. We expected that in the spirit of the time, the directors appointed by the CBN to manage the bank as a recovery team, would make do with the vehicles they inherited from the former management team, you can imagine the cost to the bank if you multiply N25million with the number of the Executive Directors and the managing director. 

Other consideration for the aggravation of the bitter sentiment pervading the baking halls of Afribank Plc has to do with the retrenchment and recruitment tactics of the management team. A bank insider told Fortune&Class Weekly of how the new management team forces old staff of the bank through the front doors of the bank only to replace them by favoured people, who are connected to individual Executive Directors.

“Seriously, this is scandalous,” the insider asserted. “Most staff members had prepared for the worst when the CBN appointed directors were inaugurated in the bank. We knew there would be sweeping reforms and most of all staff would have to go. But most of us get scandalized that rather than use the staff strength down-sizing as a cost saving measure, this management team simply turned it to opportunity to provide employment for their cronies. Those of us that were booted out through the front door were replaced by their cronies through the back door, so the question is: What do the supposed cost saving measures, implemented by the bank’s management, intend to achieve?

“Now, why are they halving our salaries and at the same time recruiting new people. It is scandalous,” the insider said.

Describing the general state of anxiety among the mainstream staff of the bank, another insider confided that as things stand, those working as tellers in the bank are, more or less, existing within the bank’s structure on tenterhooks.

“We learnt that the management team has decided to replace all tellers in the bank with OND holders, we are only waiting for when the sack letters would be distributed.”

Afribank Plc was one of the first set of five banks seized by the CBN for failing to satisfy the apex bank indices for capital adequacy, risk management, liquidity and good governance, on 14 August, 2009.

Our effort to talk with the spokesperson of the bank, Mr. Mosshod was unsuccessful because his phone was switched off all through last Friday.

WHAT CBN DISCOVERED AT ETB

How Adenuga launders IBB’s money through his bank

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Perhaps the most persistent subject of suspicion in the Nigerian public space has been the nature of the business relationship between Otunba Mike Adenuga and General Ibrahim Babangida (rtd).

Adenuga owns and directly controls a massive business empire that includes Globacom, ETB, ConOil and several well heeled concerns. Ever since the 1990s when Adenuga started grabbing public attention, most Nigerians have held that Adenuga was simply one of the fronts for the very diverse economic interest of Babangida, the military General who ruled Nigeria with a mixture of guile and violence at a time when the nation’s economy enjoyed a boost of buoyancy especially during the Gulf War. Nigeria is believed to have earned $12billion within a six-month span during the Gulf War (August 1990- February 1991).

However, it would seem the closest an official connection linking Adenuga directly to Babangida as business partners was established in 2006 when the Economic and Financial Crimes Commission (EFCC) arrested and questioned Mohammed Babangida, first son of the former military president over his alleged ownership of 24 per cent shareholding of Globacom, the giant telecommunication company owned by Adenuga who was also briefly arrested by the then Nuhu Ribadu led EFCC.

But then, in what would become a characteristic of Adenuga’s engagements with enforcement authorities in Nigeria, the Bull, as he is fondly reverenced by his many admirers, took to his heels and fled Nigeria after he was granted bail. He would not return until a new Federal Government led by Mallam Umar Musa Yar’Adua took charge of the administration of the country.

THE BULL, AS HE IS FONDLY REVERENCED BY HIS MANY ADMIRERS, TOOK TO HIS HEELS AND FLED NIGERIA AFTER HE WAS GRANTED BAIL

It is now history that within the first six months of the Yar’Adua administration, Ribadu was hounded out of the EFCC and like many other matters being investigated by the agency, the matter of how Mohammed, the young man who was not known to be engaged in any form of business came about the wealth he used in purchasing his holdings in Globacom was swept under the carpet.

TRACKING THE ETB MINNA BRANCH UNEXPLAINED PAYMENTS

For an ETB’s insider, it is common knowledge that the bank branch in Minna, Niger State, must have been established to serve, especially, the needs of Babangida. According to the source, ETB’s Minna branch is located on Bosso Road, on the outskirts of the capital of Niger State and far away from Paiko Road, the city centre where most bank branches in the state capital are located.

“Of course, most of the customers that come to the Minna branch are very unusual looking people coming to collect manager’s cheques sometimes with value of up to N300million,” the source revealed.

“Most staff of ETB Minna branch have continued to wonder the kind of business the bank has with this odd looking people. When they enter the branch, every thing has to stop as the headquarters in Lagos will be directing us on how to go about making payment to these persons. Most often, we draw manager’s cheque to the value of N300million without even knowing which account to debit. The most important for us anytime any of these fellows come into the bank is just to hand over the cheque to them. It is after they would have collected the cheque that the bank headquarters would tell us to debit an internal account of the bank, that is, an account that belongs to the bank.

“We have all learnt to play dumb; of course, we know where the cheques would end up. What manner of business do we engage in Minna that we would be making such payments, sometimes up to N500million in a week. And this is not to just one person. Different people that are not known to the branch, usually come once and we don’t get to see them again. The names we get to write on the cheques are quite interesting, one would see that names were just being twisted to give them semblance of sequencing. But what can we do? We only relate to these people as directed by the headquarters in Lagos,” the source explained.
“I guess this is one of the issues the CBN/NDIC auditors were concerned with when they examined the books of the bank,” the source added.

An official of the bank that would not want his name in print, however, insisted that the CBN sanctioning of Adenuga was simply another political move by people he refused to identify.
“We don’t want to make this a media issue, we know that it is simply politics at play,” the official said.

What the CBN special examination of ETB revealed

Penultimate week, the Central Bank of Nigeria announced the result of the special examination it had conducted on the second batch of 14 banks it had performed its stress test on. The apex bank had on August 14 announced the sacking of five bank chief executives, in tow with their executive directors, as part of the outcome of the special examination of the first set of 10 banks.

Three chief executives of banks were given the boot in the second batch of 14 banks and that included the CEO of ETB, curiously, in a move far away from the sanction earlier imposed on the group of five banks on August 14, the CBN went behind the veil to specially treat Adenuga with the same sack sanction applied to his CEO. A non-executive director should under normal consideration be of little consequence to the running of the bank.

Though the Central Bank of Nigeria is yet to inform the public of ETB’s specific breaches of its rules or those for which Adenuga was removed from the board, a source with the apex bank informed Fortune&Class Weekly that the CBN identified Adenuga as the all pervading influence in the day to day management of the bank.

But perhaps, more worrisome to the auditors from CBN and the National Deposit Insurance Corporation that examined the books of ETB were the various unexplained payments made directly from internal accounts of the bank to various people through the Minna, Niger State branch of the bank. The unexplained payments, according to the CBN source, have over the years, run into billions of naira.

Investigation Reveals Where Bank Loans Went Bad

searching-manA Fortune&Class in-house panel of experts has, after a review of the bad loans accrued to the five banks currently under the Central Bank of Nigeria’s direct supervision, submitted that the Federal Government holds largest liability in repayment to the banks. The committee of experts nonetheless observed that the figures made public by the CBN also affirmed that the affected bank officials must have been heavily involved in unethical manipulation of the stock market even as the panel agreed that the banks, indeed, tried to play their economic role of financial intermediation by providing a big chunk of their facility for real sector activities.

The conclusions of the panel’s review may put the lies on the generalized opinion prevalent in the public place of the bulk of the five banks financing going into loans for stock market trading and the importation of petroleum products.

The panel reports that 51 per cent of the N747,000,000,000 alleged bad loan, approximated at N375,487,000,000 was given out by the banks to the real sector. The classification of the real sector, in the consideration of the panelists includes activities in construction, manufacturing, imports of raw materials for industries, farming and telecommunications.

Interestingly, the panel reports that a mere 22 per cent of the N747billion bad loan aggregated at N163billion can be attributed to the stock market while N218billion, about 27 per cent of the bad loan has been tracked to have been borrowed by players in the oil and gas sector.

The Case For Union Bank

barth ebongTaken on individual profiling, Fortune&Class panelists submit that the sanctioning of Union Bank managing director should raise questions because of the five banks under the CBN’s thumb, Union Bank’s hope of recovering its bad loan is more assured because the bulk of the bad loans atissue are facilities given to entities in the real sector.

Of the total N73.582billion bad loan attributed to Union bank N66billion summed up to be loans to the real sector. The bank’s only stock market related bad loan is the N1,291,737,218 granted to GMT Securities.
In the same vein, the bank’s only outstanding to the oil gas sector is the N6,251,658,228 taken by Zenon Oil and Gas. Panelists argue that Zenon has a higher likelihood of paying up because of its track record in the oil and gas sector.

It is not, however, a shared optimism, as in the hope of recovery of the bad loan from a company like Femi Otedola’s owned Zenon when compared to the N28.5billion Oceanic Bank is expecting Rahmaniyya Global resources, a company in the petroleum products marketing sector, to repay it.
Rahmaniyya’s operations are reportedly hampered at the moment.

Crosscheck of operations at the Apapa depot of the company shows that not much activities are going on there. A senior staff of the company confides that operations have been hampered because of the company’s huge indebtedness to banks. The official took time to protest that the company’s situation became bad because an appreciable percentage of the loans secured at commercial banks were usually given out as kick backs to officials of the banks where the loans originated from.

Where Oceanic Bank May Lose Out

cecilia ibruAs a stand alone, Oceanic Bank’s loans are locked into the real sector, that is about N122billion of a total N278.2billion. The worrisome aspect of the bank’s bad loan portfolio, as it were, would be the N56billion exposure to the stock market. This figure aroused much concern because just six companies, as recorded, were found worthy enough to enjoy margin loan from the bank. The panelists reasoned that what the figures suggest is that officials of the bank merely decided to employ the services of this small number of stockbrokers to help it exploit the stock market.

The panelists also submit that the larger percentage of Oceanic Bank’s expected repayment from the bad loans tracked to the oil and gas sector of about N100billion hold no prospect of recovery in consideration of the track records of most of the entities that secured the loans.

Intercontinental Bank shares the same fate that may befall the recovery efforts of Oceanic Bank. With N34billion outstanding from just seven stock-broking houses most of which have continued to dispute the figures in the public domain.

Bad Loan Recovery Challenges For Intercontinental Bank

akingbolaAs in the case with Oceanic Bank, all of the brokerage houses involved have protested that the loan accounts were opened jointly with the banks. Some even complained that they never received any cheque book on the account that was in the joint names of the brokerage house and the bank.

In different letters of protest forwarded to the banks, some of these brokerage houses had hinted at being asked to engage in stock market manipulation by the bank. One of such protest letters written and forwarded to Intercontinental bank which Fortune&Class got a copy, reads:
“…Your bank also included clauses in the contract that gives you the sole right to decide which stock can be purchased and when such can be sold. The records presented to us even show that some of the shares purchased with the margin loan included the stock of your bank.”

The letter from the lawyer tells of more worrying aspects of the margin loan where it notes that:
“Our client mentioned the fact that they never solicited the loan but rather your bank approached them with the offer of the loan…even as their accounts were debited for the processing and management fees for the transaction before they had even had any opportunity to review or sign the offer letter.”
For our panelists, it is issues like these that may stunt efforts to recover the bad loans for Intercontinental Bank. This is besides the crisis of the Federal Government non-payment of petroleum products subsidy differentiation to oil marketers that secured a large part of the N79billion loan that was used in importing petroleum products into the country.

‘Afribank played big in the Stock Market…sure to lose big’

sebastineNot even the EFCC Chairman can yet fathom how the five companies that Afribank granted about N60billion to trade the stock market, would pay back their exposure in the current lacklustre stock market.

Whose interest was the bank management advancing by farming out the huge sum of N60billion to just five entities? Again, it is believed that the bank played big in the stock market to forward its interest. “That N60billion cannot be recovered in the short term,” one of our panelists said.

Finbank Liberal Lending Policy

okeyOf the five embattled banks, Finbank Plc profiles a liberal lending culture. Though we can’t say for certain how the loans were collaterised, the fact of farming out its loan to a larger number of borrowing entities compared to other banks in the bad loan quagmire, suggests that recovery of debt may be easier Finbank.

The bank’s total non-performing loans as calculated by the CBN is approximated at N42.4billion. Of this, about N15billion was borrowed out to 83 operators in the real sector. This is just as the total sum of N11.1billion bad loan accruing from stock market activities, was granted to nine entities with the highest calculated to still owe about N3billion.

The same liberal lending policy shows in the figure of the loans repayment of N14billion from 17 entities in the oil and gas sector.

The Sector That Is Sure For Repayment

Our panel of experts are of the opinion that bad loans accrued in the real sector may easily be recovered because of the quality of collaterals that would have been provided before approval to draw down. This, however, excludes any insider related dealings.

Compared to loans to the real sector, recovery of bad debts accrued from stock trading activities may be considered hopeless in consideration of the state of the Nigerian stock market, the macro-economic environment and the harsh realities of the global economic meltdown. The collaterisation of loan assets in margin loan is linked to securities purchased, the lender is, however, supposed to dispose of with the securities in the open market when prices go below an agreed threshold. But it turned out that these banks didn’t effect the power of cashing the securities by selling off when the prices of the securities slid below the agreed threshold. Thus, the lenders are left with collaterised securities that are way below the worth of the loans.

Same is the extant downside of the oil and gas sector. With consistent sliding petroleum product prices and the unwillingness of the Federal Government the only buyer of petroleum products in Nigeria, to pay up the difference between the landing cost of petroleum products in the country and the price at which the marketers are mandated to sell to retailers, the expectation of bad loan recovery from the entities in these sector may be challenging.

Who Is Paying Up

The Economic and Financial Crimes Commission has said that it had so far recovered a sum of N25.5billion out of the N1.143 trillion of total non-performing loans of the five banks.

The break-down of recovered debt and the banks are as follows; Intercontinental bank N7, 736, 571, 744.19; Finbank.N1, 590, 417, 332.05, AfribankN7, 551, 121, 378.69, Oceanic bankN8, 033, 481, 868.65; Union bank N659, 240, 400.78.

Executive Directors Took N5bn Unsecured Loans Each

More troubling revelations have continued to emerge from the banking industry in the wake of the sack of five bank chiefs and members of their senior management cadre. Some top banking industry staff have started talking of the justification of the action of the Central Bank of Nigeria’s Governor, Sanusi Lamido Sanusi to sanction the affected bank chiefs and their senior management cadre because of their connivance to fleece the bank.

Specifically, the entire management board of one of the banks is said to being investigated by the CBN to ascertain how each Executive Director got approval of N5billion loan facility.

IBRU FAMILY RECRUITS SENATE LEADERSHIP, PRESIDENT’S WIFE TO SAVE CECILIA

Vol 2 Issue 31 magazineThe Ibru family reportedly threw all its influence and moneyed privileges into the battle to mitigate the public embarrassment of Mrs. Cecilia Ibru, sacked Managing Director of Oceanic Bank and wife of the patriarch of the Ibru’s clan, Olorogun Michael Ibru.

Details emerging in the wake of the sudden appearance of the erstwhile Managing Director of Oceanic Bank at the office of the Economic and Financial Crimes Commission (EFCC) last Wednesday, indicate that the wife of the Chairman of the Ibru organization was advised to beat a tactical retreat to allow the family deploy its massive goodwill in the nation’s political arena to stave off the prospect of an embarrassingly long detention for Mrs. Ibru by the EFCC.

Knowledgeable insiders to the horse trading that led to the eventual emergence of the woman fondly revered as the Nigeria’s first lady of banking, confided in Fortune&Class Weekly that the Ibru family pulled all the plugs through the Senate and the Presidency to get certain assurances from the EFCC before Mrs. Ibru was given the green light to submit herself at the EFCC.

“Seriously, we have only heard about the ingenuity of the Ibru family in making money, but I was a witness to another aspect of their lives these past days when I experienced their ability to move around and lobby office holders to intervene in the roiling crisis that had claimed one of their own, Mrs. Ibru. It’s not as if you saw any of the Ibrus physically, but there were many people lobbying on her behalf especially at the Senate,” the source said.

“You know, the second day after the Governor of the Central Bank of Nigeria, Sanusi Lamido (Sanusi) made those earth shaking pronouncements about sacking five bank chief executives, the President left the country in company with his wife, Turai. The next level of authority, in the real sense of it, at that time, was the Senate. And it was to the Senators that the Ibru lobbyists took their battle to get political pressure to be applied on the EFCC boss to provide lighter treatment and shortened detention for Mrs. Ibru. The fulcrum of the argument of the lobbyists is that the Central Bank of Nigeria was making a mountain out of a mole hill by its decisions to sack the bank managing directors and their arrest by the EFCC.

“The lobbyists pleaded with the leadership of the Senate to prevail on the Chairman of the EFCC, Mrs. Farida Waziri, to make a commitment to making Mrs. Ibru’s detention before taking her to the court as short as possible.

“Of course, they got sympathetic ears in the Senate. The Senate leadership made overtures to the Chairman of the EFCC who insisted that Mrs. Ibru must first surrender herself to the anti-grafts agency before she could determine the next step.

“Hajia Binta Turai, wife of President Umar Yar’Adua also played a peripheral role in the Ibru EFCC saga. Two of the first lady’s friends were drafted to talk to the EFCC Chairman to provide a soft landing for Mrs. Ibru, the source said.

Mrs. Ibru had, as part of her battle to stop her arrest and detention, dragged the Central Bank of Nigeria and its governor, Sanusi Lamido Sanusi before a Federal High Court in Abuja over her compulsory removal from office, demanding the sum of N50 billion for “exemplary, punitive and aggravated and general damages.”

The EFCC, however, declared Mrs. Ibru and Mr. Erastus Akingbola of Intercontinental Bank wanted on Sunday, 23 August, after failing to honour invitations for interrogation, sequel to their sack on August 14 along with three other bank MDs, Mr. Sebastine Adigwe of Afribank, Okey Nwosu of Finbank and Bartholomew Ebong of Union Bank.

A statement issued by EFCC Head of Media and Publicity, Femi Babafemi, explained that Ibru and Akingbola “are wanted in connection with fraudulent abuse of credit process, insider trading, capital market manipulation and money laundering running into billions of Naira.”

Investigation Reveals Where Bank Loans Went Bad
akingbolaA Fortune&Class in-house panel of experts has, after a review of the bad loans accrued to the five banks currently under the Central Bank of Nigeria’s direct supervision, submitted that the Federal Government holds largest liability in repayment to the banks. The committee of experts nonetheless observed that the figures made public by the CBN also affirmed that the affected bank officials must have been heavily involved in unethical manipulation of the stock market even as the panel agreed that the banks, indeed, tried to play their economic role of financial intermediation by providing a big chunk of their facility for real sector activities. (read more)