Nigeria: Looted Funds Traced to Stock Market

Mrs. Farida Waziri, Chairman of Nigeria's Economic and Financial Crimes Commission The Chairman of Nigeria's Economic and Financial Crimes Commission (EFCC), Mrs. Farida Waziri, has accused Nigerian stock brokers of aiding and abetting money laundering. And just as Nigeria is still grappling with the removal of the chief executives of five banks, the United States’ bank regulators have closed four Midwestern banks and one in Arizona, bringing to 89 the number of US banks to fail this year as deteriorating loans continue to take their toll on financial institutions. Waziri, who was speaking in her office in Abuja while receiving executives of Association of Stockbroking Houses of Nigeria, disclosed that current investigation of banks had revealed that looted funds were being laundered into the stock market through acquisition of shares. “The stock market is the platform for the development of the economy and it is important that it sets in place, adequate rules to ensure that its members do not sabotage the economy. Concurrent with share manipulation, the initial indices show that looted funds are being laundered into the stock market through acquisition of shares,” she said. Citing the example of Falcon Security Firm, which owes N90 billion, the EFCC’s boss said what the current investigation of banks has revealed is the active connivance of stockbroking firms to manipulate share prices and distort the market. “When we got this complain, we invited Falcon Securities’ Managing Director and asked why his company was owing that much but do you know that he could not explain what went wrong. The general trend has been for banks to offer loans to stockbroking firms and these loans are then used to manipulate the share prices of the bank, and to mop up the shares of the same bank prior to a public offer. At the face value, granting a loan is a simple bank-customer relationship but the utilisation of the loan is a breach of the provisions of Section 20 of the BOFIA and the regulations of the Central Bank of Nigeria (CBN) and carries a jail term of between two and three years. It is also a breach of the Investment and Securities Act. “Under Section 23 of the Money Laundering Act, firms carry on the business of investment and securities (this includes stockbroking firms) are designated as financial institutions and there is an obligation on them to file with the Nigerian Financial Intelligence Unit all suspicious transactions, and file with the Nigerian Financial Intelligence Unit all currency transactions above N500,000 for individuals and the N2 million for companies,” she said. Waziri said the anti-graft agency would start the immediate enforcement of the provisions of the Money Laundering (Prohibition) Act 2004, and prosecute all stockbroking firms that default in their obligation to the suspicious transactions reports and currency transaction reports. The EFCC boss also insisted that stockbroking firms should comply with other provisions of the Money Laundering (Prohibition) Act 2004, such as the ones requiring them to know their customers, take proper documents of identification, and set up anti-money laundering structures. “All defaulting firms will be prosecuted,” she said. Waziri, who revealed that the discovery of huge bank debt did not come to her as a surprise, said earlier petitions she got at different times were pointers to the fact that if something drastic was not done, many banks would go down the drain. She said: “Some people have been saying that the current banking reform is a Northern agenda. When Prof. Soludo was there as the CBN Governor, people said he was pursuing Igbo agenda, I’m sure by the time a Yoruba becomes the CBN Governor, he would still be accused of pursuing Yoruba agenda. Rather than patting Sanusi on the back, some Nigerians are saying something else. If the man had not taken the drastic decision he took, many banks would have gone down the drain. This problem did not come to me as a surprise. I saw it coming. I even thought the banks would have collapsed but thank God it did not happen. “I earlier got a petition from Intercontinental Bank, accusing a foreign company, Tanzila Petroleum Limited, of obtaining N14 billion loan, which the foreigner had refused to pay. After collecting this loan without any collateral whatsoever, he did the business, got his money and rather than come back to Nigeria to pay up the loan, he went to Dubai, where he bought property for himself. We got this man arrested and detained, hoping to recover the money. After much begging and promising that if released on bail, he would pay all the money, he was released, but what shocked me most was that after he was released on bail, he instituted a case of unlawful detention against us. Rahamaniya Oil and Gas, another company, collected N12.8 billion from the same Intercontinental Bank without any collateral. There is the case of an Indian businessman, who came to Nigeria without a dime, ended up getting loan facilities from different banks up to N23 billion. Sanusi should be appreciated and not given a bad name.” She called on the fleeing Intercontinental Bank Plc former boss, Mr. Erastus Akingbola, to submit himself for interrogation by the officials of EFCC. “I read it in a paper that Mr. Erastus Akingbola is back in the country. He should be bold enough to come to us with all necessary papers and his lawyers, so that we can hear him out,” she said. Clearing the air on the invitation of former Rivers State Governor, Dr Peter Odili, and Dr. (Mrs.) Ndi Okereke-Onyiuke by the EFCC, Waziri said she only read in the papers that a court had stopped EFCC from arresting Odili and that she had not yet received any court papers to that effect. She said Okereke-Onyiuke had earlier sent some people to the EFCC, but that when EFCC was not too convinced about their explanations, the commission decided to invite the stock exchange D-G herself. The closed banks in the U.S., according to Reuters, are Vantus Bank in Sioux City, Iowa; InBank in Oak Forest, Illinois; Platinum Community Bank of Rolling Meadows, Illinois; the First Bank of Kansas City in Missouri; and the First State Bank of Flagstaff, Arizona, the Federal Deposit Insurance Corp (FDIC) said. Vantus Bank was the largest of the five institutions to close, with total assets of $458 million and total deposits of about $368 million. InBank had total assets of $212 million and total deposits of about $199 million, while the First State Bank of Flagstaff, Arizona had total assets of $105 million and total deposits of approximately $95 million as of July 24. The First Bank of Kansas City, which has one branch, had total assets of $16 million and total deposits of about $15 million. The Office of Thrift Supervision said that Plati-num Community Bank had total assets of $148 million, while the Federal Deposit Insurance Corporation (FDI-C) estimated its assets at $345.6 million as of August 29, 2009. The five failures will cost the FDIC deposit insurance fund an estimated $401.3 million, the agency reported. In 2008, 25 U.S. banks were seized by officials, up from only three in 2007. The insurance fund's balance dipped to $10.4 billion at the end of the second quarter, but that level does not include the additional $32 billion that the FDIC has set aside to cover the cost of bank failures over the next year. In September, Seattle-based lender Washington Mutual became the biggest bank to fail in U.S. history, suffering from losses from soured mortgages and liquidity problems. The FDIC will insure up to $250,000 per account at the closed banks. The agency also has a tally of problem banks that its examiners closely monitor. At the end of the second quarter, 416 undisclosed institutions were on that list. FDIC Chairman, Sheila Bair, said bank failures would remain elevated even as the economy begins to recover because the bank industry is continuing to recognise loan losses and clean up their balance sheets. She said the industry's woes are migrating from residential loans and complex securities to more conventional types of retail and commercial loans that have been hit hard by the recession. Bank failures in the U.S. last topped 100 in 1992, when at least 179 were seized, according to FDIC data. Blair has said more collapses are likely, and the agency’s list of “problem banks” stands at 416, the most in 15 years. Source: Thisdayonline.com

Nigeria bank boss held by police

The central bank had to bail out the five lenders earlier this month A former Nigerian bank boss being sought by the country's anti-corruption police has turned herself in. Cecilia Ibru, who the central bank sacked from her chief executive position at Oceanic Bank on 14 August, had been sought for three days. She is now due to be questioned on suspicion of fraud, insider trading and money-laundering. Ms Ibru and other bank bosses were sacked after the central bank had to come to the rescue of five lenders. The Central Bank of Nigeria has to inject a total of 400bn naira ($2.6bn; £1.6bn) into the banks - Afribank, Intercontinental Bank, Finbank, Oceanic Bank and Union Bank - after all were found to have seriously low cash reserves because of a series of bad loans. Fifteen other chief executives at the banks are already being questioned by police, following the expiry of a deadline for many of the loans in question to be repaid. "She [Ms Ibru] gave herself up this afternoon. She is being interrogated," EFCC spokesman Femi Babafemi said. Shares in the five banks, which account for 40% of the country's bank credit, have been suspended. They had run up bad loans totalling a collective 1.14 trillion naira. Nigeria is no stranger to corruption, but the latest scandal has dominated the country's media headlines.

NIGERIA CBN BROUHAHA: YAR ADUA'S MAGIC STICK AT WORK

By Ogechi Igbokwe

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IT'S GRADUALLY BUT SURE BECOMING OBVIOUS FROM THE BEHAVIOUR OF PRESIDENT MILLS THAT,IF A FANTI SAYS I AM "ASOMDWE-HENE",IT LITERARY MEANS "I AM A TROUBLE-MAKER" - By: FRANCIS TAWIAH , Germany - Duisburg More Quotes | Submit a Quote

Never For once, have I doubted the ability of Nigeria to make it into the list of the world's first ten economies by the year 2015. However, my belief changed in June 2009 when the new CBN governor was nominated. Being a youth vast in the knowledge of the workings of the system called Nigeria, I know doomsday is near for majority of Nigerians before the end of this year. A major event will happen in Nigeria swiftly after which normalcy will be restored.

As it is right now, Sanusi is working according to the script written by the northern oligarchy. A script designed for the total domination of the nation's economy by the core northern establishment. The content of the script should have been orchestrated immediately Sanusi emerged but for pleadings by President Yar Adua for it to wait till this period, when he will be away for his kidney transplant in Saudi Arabia.

From my sources in Abuja, I have confirmed that this latest CBN sack and incarceration of private bank CEOs is in tandem with Sanusi and Yar adua's conspiracy. It is designed to distract Nigerians from the failings of Mr. President, who is currently in Saudi Arabia on medical treatment. We can remember the couple of times he went on treatment overseas that the media was filled with all kind of stories related to his medical condition. But now, he has designed his exit plan well enough with the help of corrupt justice minister, EFCC and the new CBN governor Sanusi Lamido. This is to ensure that for the next two months while he is recuperating from his surgery Nigerians will continue to hear only stories about the arrest, re-arrest, prosecution and escape methods of the bank CEOs. Already we hear about Akingbola and Ibru's movement overseas. Tomorrow it may be about the arrest or escape of Zenith and maybe firstbank's CEOs.

Knowing fully well how gullible, oppressed, marginalized, intimidated and docile many Nigerians are Yar Adua has used this method to finalize his kidney transplant and recuperate for the next couple of weeks after. This is a sad situation for the Nigerian people because governance will be left in the hands of lame duck politicians like Jonathan and Aoondanka.

Dangote's emergence of the NSE and the latest CBN directive to replace ailing bank CEO's with puppet ones is part of the plan revealed to me. All of these are being done, so that should in case Yar adua does not come back home alive in October to celebrate independence day, the northern oligarchy will have stooges in advantageous and sensitive government positions..

For now, Yar adua and the Northern establishment's magic stick seem to be working. But their plan is going to be short-lived because concerned influential southern Nigeria's citizens are aware of the plan and are working to counter the economic offensive of the North. It has also been exposed to me by my sources in Abuja that the Boko haram sect is still alive and bubbling in their various cells across the north. They are being sustained and financed by members of the northern establishment as an alternative to the Nigerian Army and police, in the event that they are unable to take total control of these forces being currently headed by southerners, IGP Onovo and Marshal Paul Dike.

Recently, the United States re-evaluated their analysis of the Nigerian state and made a new hypothesis that Nigeria may disintegrate before their previous predicted date of 2015. Now they posited that it may be 2013. Personally, I see this as absurd, but my sources in Abuja say the way things are going now it may be earlier than that, maybe by this year's end.

I have since last year been on self-exile after my boss, the SSS director, Enugu made series of attempts to kill me by road accidents and assassination squads. His attempts to kill me were because I knew about his meeting with a core Northern personality, where he agreed to fulfill to the latter all their plans to re-dominating Nigerian economy and political space. Today my boss is stationed at the State house not to protect the presidency but to monitor activities in the State house and give feedback to his benefactors. As it is today, Yar Adua is still the president but major decisions are masterminded by this core northern band of brigands. Nigerians should come out en masse to stage protest against Yar Adua's trip to Saudi Arabia and forget about the CBN brouhaha because all along the government knew about their condition when Soludo was there. That no action was taken against them was that Soludo as a core Finance and economic expert knew the devastating effect it may cause. Sanusi is doing what he is doing now because he is dancing to the tunes of the Northern Oligarchs and is bereft of ideas on how to move the economy forward, going by the fact that he is a fanatic Islamic scholar just like members of the Boko Haram sect. I warn him to desist from being used as a tool like Nuhu Ribadu and El rufai because when the chicken comes home to roost he will be wasted like Boko haram leader Yusuf Muhammed.

Ogechi Igbokwe

Ogechirevolts@yahoo.com

Ex aide to Enugu SSS Director