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Depositors lose N107bn to wonder banks

Some customers of unregistered savings institutions, otherwise known

as wonder banks, lost a whopping N106.9bn, according to a report
released by the Central Bank of Nigeria on Wednesday.

The report, which was prepared by the Inter-Agency Committee on

Illegal Fund Managers on behalf of the CBN, also revealed that 440
wonder banks were involved in fleecing about 560,882 depositors.

The report said that the depositors lost N104bn or 97.3 per cent of the
total sum to 36 illegal fund managers. One of the illegal wonder banks
Nospetco Oil and Gas Limited allegedly made away with about
N47bn of the N104bn. The committee, however, did not state how the
balance of N2.9bn was lost by the depositors.

The committee members were drawn from the CBN, the Nigerian
Deposit Insurance Corporation, Securities and Exchange Commission,
the Economic and Financial Crimes Commission, Corporate Affairs
Commission and the Nigeria Police Force.

A statement on Wednesday by the Head, Corporate Affairs of the CBN,

Mr. Muhammed Abdullahi, said the committee met recently as part of
efforts to check the operations of wonder banks and their operators.

The committee also deliberated on measures to confront the

challenges posed by the stripping of assets by the promoters of the
wonder banks, many of who had gone underground.

The report stated that in the case of Sefteg Company Nigeria Limited,
a liquidator was able to realise a sizeable sum of money from the
assets of the company and had commenced payment to verified
depositors of the company.

The CBN statement explained, This approach of using court appointed

liquidators will be replicated in all cases to ensure early resolution. The
committee has also mapped out strategies to address the menace in a
comprehensive and sustainable manner through enhanced public
communication, the use of court appointed liquidators and intensive
surveillance by law enforcement agencies.

It advised members of the public to refrain from dealing with

unlicensed or illegal wonder banks, which offered astronomical or
extra-ordinary returns on investments to extort money and lure them
into dubious pyramid schemes.

The CBN warned that members of the public, who choose to deal with
these unscrupulous individuals and companies, despite these
warnings, do so at their own risk.

It however, advised that enquiries should be made at the CBN, SEC

and other member-institutions of the Inter-Agency Committee,
especially when in doubt about any wonder bank. Prior to the raid
carried out on the wonder banks by the CBN, thousands of Nigerians
had fallen victims to their antics after depositing large sums of money
with the operators, who in turn promised them huge returns.

The tell tale signs of disappointment crystalised when most of the

operators could no longer redeem the payments promised the

While some of the illegal bank operators ran into exile, others who
were not so lucky were arrested and made to pay back what they had

Some of the other wonder banks named by the CBN were Art Master &
Company Limited; Cyber International Limited; Fortune Access
Interlinks Network; Gold Power Unique Services Limited; Gorutrans
Nigeria Company Limited; Interglobal Investment Limited;Money Field
Limited; New Freedom Diversified Investment Limited; and Open Gate
Multipurpose Investors Limited.

Others were Orion Express Global Services Limited; Pennywise

Investment Limited; Positive Move International Nigeria Limited;
Precious Golden Profile; Real and Cool Wealth International Limited;
Shola Olanrewaju Ayinke (Sefteg Nigeria Company); Silvertrust;
Global Investment and Successpoint International Investment Limited.

A tribunal had earlier granted SECs request to close down 30 wonder

banks from operating as investment or fund managers in the country
without its permission. It also urged the CBN to determine the status
of all the investorsfunds kept by the wonder banks in the custody of
17 commercial banks.

By Sunday Ojeme
PUNCH July 1, 2010