• Deadline extended to June 30, bank chiefs blame court closure for delay
The Economic and Financial Crimes Commission has issued a final warning to over 120 managing directors and top executives of banks to submit their asset declaration forms.
The anti-graft agency gave the top bankers till June ending to obey the order even as the initial deadline of June 14 has passed.
The EFCC Chairman, Abdulrasheed Bawa, had initially in March given top bankers, among others, till June 1, 2021, to declare their assets in line with the Bank Employees, ETC (Declaration of Assets) Act 1986, with defaulters said to risk 10 years in jail if found guilty by any Federal High Court.
But the anti-graft agency extended the deadline till June 14 to allow bankers to comply with the order effectively.
However, PUNCH learnt that the EFCC chairman had sent a final reminder to all the affected banks executives and given them till the end of June to declare their assets.
“The truth is that this law has been in place for over 35 years, but it was hardly ever enforced and so these bankers would just declare anything or not declare at all. However, the EFCC is now demanding the declaration forms as part of moves to sanitise the system.
“To this effect, the chairman has written a reminder to the banks, asking all top executives to comply latest by the end of June,” an investigator told PUNCH.
Findings showed that well over 120 managing directors, deputy managing directors and executive directors of 19 deposit money banks are affected by the EFCC’s order.
Checks by PUNCH showed that Access Bank has 16 board members, United Bank of Africa has 15, Sterling Bank and EcoBank have 13 members each, while First Bank, Guaranty Trust Bank and Fidelity Bank have 12 members each as contained on their official websites.
Others are Zenith Bank, 11; Wema Bank, 11; Union Bank 11; First City Monument Bank, 9; and Unity Bank, 8.
According to the Bank Employees, ETC (Declaration of Assets) Act 1986, bankers should declare their assets through the appropriate authority like the Office of the Secretary to the Government of the Federation. But the forms were hardly ever scrutinised, a trend which the EFCC seeks to change.
Section 1 of the Act states, “Every employee of a bank shall, within fourteen days of the commencement of this Act, make a full disclosure of all his assets.
“In the case of a new employee, he shall within 14 days of assuming duty with the bank make a full disclosure of all his assets at the time of his assuming duty; and for the purpose of this subsection, a transfer or secondment from one bank to another shall be treated as a new employment.”
Section 2 of the Act reads, “The full disclosure of assets required under Section 1 of this Act shall be made in the manner prescribed in the Declaration of Assets Form contained in Form A of the Schedule to this Act and shall be executed before and attested to by the Registrar of a High Court, the Court of Appeal or the Supreme Court.
“The President or the appropriate authority may from time to time prescribe such other forms as may be necessary to achieve the purpose and intendment of this Act.”
The Act in Section 5 states that the Chief Executive of every bank “shall twice in every year, but not later than 7 January, or 7 July, as the case may be, submit to the appropriate authority a list of all employees who joined or left the employment of the bank in the immediately preceding six months expiring respectively on 31 December of the previous year and 30 June of that year respectively.”
The Act explained that “Chief Executive” meant the chairman, the managing director or other similar officer of a bank, including the Central Bank of Nigeria.
Likewise, the Act defined “employee” or “employee of a bank” to include the governor (of the CBN), the chairman and members of the board, managing director, director, general manager, manager, examiner, inspector, controller, agent, supervisor, officer, clerk, cashier, messenger, cleaner, driver, and any other category of workers of the Central Bank, a bank or other financial institutions.
Speaking in March, EFCC chairman, Bawa, noted that the anti-corruption agency was worried about the role that financial institutions and bankers played in corruption.
He said, “We understood that at the tail end of every financial crime, it is for the criminal to have access to the funds that he or she has illegitimately acquired and we are worried about the roles of financial institutions.
“We have discussed, but we hope that all financial institutions, particularly the bankers, will declare their assets as provided for by the law, in accordance with the Bank Employees Declaration of Assets Act.
“The EFCC, come June 1, 2021, will be demanding the asset declaration forms filled by the bankers so that the line that we have drawn from June 1 is really complied with by bankers in particular.”
In an action backing the EFCC’s move, the House of Representatives recently passed for second reading a bill to make it compulsory for workers in the banking, insurance and pension industries to declare their assets.
The proposed law will also bar staff members of banks and other financial institutions from operating accounts outside the shores of Nigeria. Their spouses and children may also be mandated to declare their assets when a bill presently at the House becomes law.
Also, the Secretary to the Government of the Federation would also be stripped of the responsibility to keep records of declared assets by Nigeria Customs Service and bank workers, and transfer it to the relevant regulator of each industry.
In an earlier move, the Central Bank of Nigeria in 2016 ordered workers in all the 19 Deposit Money Banks in the country to declare their assets in an anti-corruption crusade in the banking industry.
However, some bank directors who spoke to one of our correspondents on Friday said they had yet to meet the deadline because court workers were on strike for two months and they thus could not notarise the declaration forms.
“We would have met the EFCC deadline, but courts were shut for two months and we could not notarise our forms. We will submit this week unfailingly,” a bank director who spoke on condition of anonymity said.
“I have received the letter from the EFCC. I will comply latest by Tuesday,” said another bank executive who preferred to remain anonymous.
The EFCC has in recent times investigated, detained and prosecuted several bank executives for allegedly mismanaging customers’ funds.
On Wednesday, a Lagos State High Court convicted a former Managing Director of the defunct Bank PHB, Francis Atuche, for defrauding the bank of N25.7bn.
A former Managing Director of the defunct Oceanic Bank, Cecilia Ibru, was also convicted and ordered to repay $1.2bn.
Also, a former Chairman of Skye Bank (now Polaris Bank), Tunde Ayeni; as well as a former Managing Director of the defunct Intercontinental Bank, Erastus Akingbola, are facing corruption charges.
EFCC chairman, Bawa, had said earlier in the week that bankers usually aid corrupt officials in laundering public funds even as he alleged that a former Minister of Petroleum Resources delivered $20m in cash to a bank executive.
However, the Bank Employees, ETC (Declaration of Assets) Act 1986 which ought to check the criminal actions of bankers has hardly ever been enforced.
Section 8 of the Act says any bank employee who “knowingly fails to make full disclosure of the assets and liabilities required to be made under this Act; or knowingly makes a declaration that is false, knowing same to be false in part or in whole; or fails to answer any question contained in the appropriate form under this Act; or fails, neglects or refuses to make a declaration or furnish information as required by the provisions of this Act, commits an offence under this Act and shall be liable on conviction to imprisonment for a term of 10 years.”
When asked what would happen if the bank executives don’t make their asset declaration form available, the investigator said, “We will cross the bridge when we get to that point. But this is a matter of law. Anyone who makes false declarations actually risks 10 years in prison.”
When contacted on the telephone, the EFCC spokesperson, Mr Wilson Uwujaren, simply said, “We are still in the process of collation.”
Bankers’ union calls for time extension
However, as the deadline to submit their asset declaration forms approaches, the National Union of Banks, Insurance and Financial Institutions has called on the EFCC to extend the recent deadline given to bank executives.
The union had earlier said its members were not afraid to declare their assets as being required by the EFCC, stating that workers in the banking sector were guided by the principles of integrity, transparency, and honesty.
Speaking with one of our correspondents via telephone on Saturday, the union’s president, Anthony Abakpa, stated that in view of the fact that court activities had yet to commence fully, top bank officials should be given more time to declare their assets.
Abakpa reiterated that an extension would enable the officials to meet the demands effectively.
He said, “As I told you earlier, basically, before someone attains a managerial position in a banking institution, it is mandatory that they must declare their assets at a point of entry.
“So, all of them have declared their assets through the EFCC, NBIC (Nigerian Bank for Commerce and Industry), and DSS (Department of State Services) before they came into the position.
“So I don’t think that it is a new thing. They have not been able to keep up with the deadline because the judiciary was on strike. I think they need more time to do it accurately.”
Banks will comply with EFCC order as with CBN –Sterling Bank MD
Asked his position on the declaration of assets, Sterling Bank Managing Director, Abubakar Suleiman, said bank MDs would comply with the EFCC’s order as they had done with the Central Bank of Nigeria.
Suleiman noted that the EFCC’s directive was not a new thing for bank MDs.
He said, “It has actually been a part of the requirements for bankers to submit asset declaration forms. When one is appointed on the board of a bank, one of the important documents that one has to submit to the CBN is one’s asset declaration form. It is not a new requirement for bankers.
“The requirement to submit to the EFCC would also not make a difference. We will simply update those asset declaration forms and submit them.”
Access Bank Vs Late Sunny Odogwu: Moving against Recalcitrant Debtors
The recalcitrant attitude of debtors who take depositors funds by way of loan facilities with no intention to repay has once again come into public focus with the recent dispute between the Estate of the late Chief Sunny Odogwu, and his related companies.
While it is not in dispute that a facility was taken from the bank to finance a hotel project at 31-35, Ikoyi Crescent, Ikoyi, Lagos, the said facility is yet to be repaid.
The impression being created by the Estate of the late Chief Odogwu and his related companies that they can take depositors funds to finance projects and rather than repay such funds, they would make false claims to the ownership of the assets of the debtors as inheritance to be shared is a vivid reminder of the era of failed banks in the country.
The dubious attempts by the Estate of the late Sunny Odogwu to rewrite the terms of the facilities is not only a show of shame but a clever attempt by the family to inherit dubious assets gotten from depositors’ funds which does not form part of the estate and as such should not be allowed.
It would be recalled that the defunct Diamond Bank Plc, an iconic bank comparable to Eastern Nigeria’s African Continental Bank (ACB) almost went under due to recalcitrant borrowers and the bank was rescued by Access Bank Plc.
Unfortunately for the Estate of the late Sunny Odogwu and his related companies, the facts of the matter, terms of the loans and the dispute has been litigated and pronounced upon by the Federal High Court and the Odogwu Family had the opportunity to present their own side of the story which they did before Hon. Justice Saliu Saidu of the Lagos Division of the Federal High Court in suit number: FHC/L/CS/1633/14, in November 3, 2015.
Delivering judgment in the suit, Hon. Justice Saidu held that the first to third defendants were in fundamental breach of the contract for the financing of the construction of the Luxury Collection Hotels and Apartments, having admitted, “Indebtedness to the plaintiff in the sum of N10, 252,315,567.28 on the project finance facility as at December 20, 2011.”
Additionally, the learned trial judge held that the first to third defendants have not produced before the court any evidence that any of the conditions for the grant of the facility was waived or demonstrated to the court how they liquidated their indebtedness.
His words: “With all the facts before me, I am satisfied that the first to third defendants who have admitted indebtedness has not shown how the indebtedness was liquidated.
Flowing from these grounds, Justice Saidu made the following consequential order: “Judgment is entered in the sum of N26, 229,943,035.22 jointly and severally against the 1st to 3rd defendants being the outstanding sum as at September 30, 2014 advanced by the plaintiff for the 1st to 3rd defendants’ project which sum has remained unpaid despite several demands.
“That leave is granted to the plaintiff to foreclose and sell the said property situated at 31-35 Ikoyi Crescent, Ikoyi, Lagos and to deposit the proceed of the sales into the 1st defendant’s account kept with the plaintiff towards the partial satisfaction of the judgment sum against the 1st to 3rd defendants.
“That leave is granted the plaintiff with the supervision of the Court’s Registrar to sell property situated at No 31-35 Ikoyi Crescent, Ikoyi, Lagos being the security for the sum of N26, 229,943,035.22 advanced by the plaintiff to the 1st to 3rd defendants for the development of the project called Luxury Collections Hotels and Apartments, the repayment of which facility, the 1st to 3rd defendants have failed, refuse otherwise neglected to make despite several demands.”
It was against this background that the Estate of the Late Odogwu entered into a settlement agreement in May 2019 on the matter.
The key parts of the settlement include the following: “The defendants (the Estate of the late Sunny Odogwu and his related companies) agreed to sell a property described therein as the (Berendo Property”) in Los Angeles and to pay the sum of $11,111,111.11 within (60) days from the date of the settlement agreement to the Bank, failing which, the ownership of the Berendo property was to be assigned to the Bank, and the defendants also agreed with the bank in satisfaction of the outstanding settlement amount after receipt of the net proceeds of the sale from the Berendo property to assign such additional properties directly to the bank by way of an agreed asset swap arrangement subject to the terms of this settlement agreement.
Also, the defendants agreed to provide the bank with all the original documents pertaining to certain properties after the execution of the settlement agreement and undertook to execute and provide all documents required to perfect the legal interest of the Bank in such properties and also perfect the asset swap for the purpose of liquidating the outstanding settlement amount with the bank and shall provide such warranties and representations including without limitation, clean, undisputable and unencumbered title with quiet and peaceful possession. All these shall be achieved within seven days from the date on the settlement agreement.
Furthermore, the defendants failed to facilitate/conclude the sale of the Berendo property, hence the sum of $11,111,111.11 has not been received by the bank in line with the settlement agreement. Consequently, the defendants have failed and refused to assign the Berendo property in Los Angeles to the Bank. Rather, the defendants compromised the property at Los Angeles without paying the agreed sum to the bank.
Furthermore, the defendants refused to hand over the Dubai property to the bank in line with the settlement agreement. The defendants have refused to grant vacant possession to the properties at Kirikiri as well as the Dubai property till date in line with the settlement agreement.
Recalcitrant debtors negatively impact the critical banking sector and defeat the essence of granting such facilities to aid business growth.
Regrettably, the Estate of the late Sunny Odogwu instead of repaying the facility in line with the terms of the settlement have apparently opted for assets stripping and have failed to comply with the settlement agreement.
The idea or impression that the beneficiaries of the estate of the late Sonny Odogwu can lay any claim of ownership to an asset acquired from depositor’s funds of a financial institution as forming part of the estate when they are aware that the underling facility has not been repaid is not only sad but actionable. And this is exactly what the Failed Bank Act seeks to prevent.
At the end of the day, depositor’s funds are savings by hard working Nigerians who believe in the financial system.
Banks are merely custodian of this funds and as custodians, when banks grant credit facilities to customers to finance and fund assets and projects, such assets do not form part of the estate of the customers for the beneficiaries to share and leave luxurious lifestyles at the expense of the depositors, until such facilities are fully repaid.
Access Bank Plc has remained resolute in its determination and in its typical manner of dealing with chronic and recalcitrant debtors, has indicated that it will continue to deploy every legal available resource to ensure that this debt is fully recovered.
This is why dodgy and chronic debtors like these must steer clear of accessing facilities from Access Bank Plc.
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