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The Soludo Era: After the banking consolidation exercise reduced the number of Nigerian banks to 25, Professor Charles Soludo became a national hero. He was hailed as a practical genius who translated abstruse economic phenomena into reality, a man who easily vanquished the stodgy and connected grey eminences that had tried to resist his reformist agenda. As the masses sang his praises, the canny bank chiefs who had succeeded in saving their institutions knew that they had to embrace him in order to protect their empires. To seduce him, they levied themselves 2 million naira each and hosted him a superlative 50 million naira "dinner". He was initiated into the luxury life. Soludo, the hyper-intelligent economist soon morphed into a dapper dresser who wore Savile Row suits and expensive Rolex watches. He became very close to a privileged group of bankers who became the de facto rulers of Nigeria’s financial sector. The tough talking regulator lost his sense of impartiality. The Stock Market Boom. General Olusegun Obasanjo's decision to work with Bretton Woods economists combined with soaring oil prices to draw foreign investors to the Nigerian financial sector. In addition to hedge fund managers who invested a small fraction of their portfolios in the growing market, ordinary Nigerians joined the fray when they realized that banking sector reforms had transformed the stock market into a veritable cash machine. Growing investor confidence quickly led to a sharp rise in stocks and attracted the hoi polloi. Small investors rushed to the stock market in droves and sank their money in "high growth stocks". The snake oil bankers quickly read the situation and drew up plans to further increase their capital base. In order to achieve abnormal returns, they enlisted the support of stockbrokers who brazenly manipulated stock prices with the tacit support of the leadership of the Securities and Exchange Commission and the Nigerian Stock Exchange. A rash of public offers soon followed, leading to an exponential increase in stock market indices. Some states even compelled civil servants to buy shares, forcibly deducting the value from their salaries. Clergymen told their congregations about the "miraculous wonders" of the stock market. As the unsophisticated “sheep” emptied their nest eggs into the Nigerian Stock Exchange, the bankers and their sidekicks got richer. Mid-level managers earned millions in bonuses as reward for bringing in ensnaring ignorant investors. The stock market became part of the national conversation. And there was no stopping the bubble as the new financial elite was born. Greed and Recklessness.
Indians got millions for software and overpaid managers were poached from rival banks. This Day’s flamboyant chairman became the cheerleader-in-chief as banks picked up the tabs for visiting global dignitaries at the newspaper’s exquisite “town hall meetings. Business Initiative Directions. savvy local entrepreneurs became potential oil and gas traders. He became a trusted confidante to Aliko Dangote and Femi Otedola. African Business. South African brand consultants were paid huge sums to design new logos. The bankers obliged and doled out more cash. Others rented Banana Island flats and joined expensive boat clubs where they flaunted their expensive curios. “Oil and Gas” became the most important phrase in the lexicon of the Nigerian banker. Renaissance Capital. got a 450 million naira housing allowance for his short stay at the helm of the crisis-ridden Wema Bank. Anthony Elumelu. Jim Ovia and Tayo Aderinokun commissioned private jets to take them around the world while Akingbola curiously started an FM radio station and announced that he would treat himself to a Rolls Royce on his 60th birthday. they went back to the bankers and drew up plans for an African Dubai. The gnomish Jim Ovia took over an entire street in highbrow Victoria Island where he built an imposing edifice and commissioned a flashy ATM galleria. the banks immediately went on a spending spree.As the money rolled in. one half of the now infamous United Alliance. The Banker and EMEA Finance came calling. led by the mercurial Stephen Jennings staked its claim and exchanged ratings for securities contracts. The bankers obliged and shared the "upfront" interest. built a fortress complete with angry mobile policemen. the banking tsars became delusional and started a turf war. His amazing architects delivered The Civic Centre. Foreign credit lines and unnecessary forays into the capital market meant there was just . Foreign praise singers also realized that there was money to be made and set off a craze for dubious awards. Aig Imoukhuede. contraceptives and expensive baubles. The battle assumed a personal dimension as nouveau riche bankers fought for prime real estate in Ikoyi and Victoria Garden City. Since real estate is the Nigerian's true barometer of wealth. dishing out awards in exchange for cash. As oil prices continued to spike. They drew up grandiose business plans and convinced bank chiefs to advance huge loans for the purchase of tank farms and refined crude. Deals were sealed in posh country clubs as huge loans were given with utter disregard of risk management processes. Jeremiah Omoyeni. These “happiness” officers were given huge allowances for miniskirts. a ship-inspired building that came to define his expensive taste. Nigeria’s richest men. Some of the oil traders were not satisfied with their bulging bank accounts. the banker cum politician. In little time. Prince Nduka Obaigbena. Cecilia Ibru.” Vanguard raked in billions from its annual Bankers’ Awards. They commissioned ostentatious offices and hired buxom bimbos to reinforce their marketing departments.
he would be the subject of an international manhunt. claiming that I have personal scores to settle with Dr Erastus Akingbola. In any serious country. This made it easier for foreign operators to exit the market at a premium. Cecilia Ibru-Long before the stock market correction and the rapid fall in global oil prices.Some staffers of Intercontinental Bank have accused me of bias. Ondo. I have always believed that Erastus Akingbola was a crook and I owed the Nigerian public a duty to expose him. where he was rewarded with the chancellorship of the state-owned university in a clear case of quid pro quo. the governor of the president’s home state. Okereke-Onyiuke and Soludo all publicly declared that the country’s financial system was isolated from the rest of the world. Deconstructing the Fallen Five. It is now clear that he was an exceptionally talented huckster who used his avuncular mien to shamelessly manipulate the public. the foreign bankers knew they had to run. The Early Signs. This is untrue. Akingbola. the private equity fund. After all. Nobody can underestimate the danger still posed by the highly influential Akingbola. "Expatriate Only" signs soon became de rigueur. When the subprime mortgage crisis ballooned into a full scale economic meltdown. who has been in the industry for thirty years. Three days later. Indy Mac had disappeared and fabled Wall Street institutions such as Bear Stearns and Lehman Brothers had imploded. Firms such as Actis. He didn't show up for the historic August 14 meeting. Dr Akingbola finally ended up in Sokoto where his attempts to lobby an unsmiling Sultan fell flat. Ikoyi and Abuja became the new Hamptons. Erastus Akingbola . The Nigerian banks had no chief economists and were blissfully ignorant of the implications of the crisis. Cecilia Ibru had inexplicably shackled Oceanic Bank to a bilateral 175 million . Lekki. he instituted a 50 million naira scholarship scheme for Katsina natives in a clear attempt to lobby the president through Ibrahim Shema. Akingbola also instituted a similar scheme in his home state. the global banking system was on the brink of collapse. By the time. He frittered away the bank’s money on questionable “CSR” schemes designed to influence politicians and lay the groundwork for a future political career. it was too late. As part of his national “save me from Sanusi” tour. the stock market went into a tailspin. In the week before the August 14 temblor. he had vanished into thin air. dumped its shares in UAC for 50 naira.too much money to spend. His case is not just an error in judgement. Most Nigerians continued to buy stocks not knowing that Peter Ololo and his fellow stockbrokers were using cheap money to prop up the stock market. Even foreigners began to complain about the skyrocketing prices of Nigerian real estate. Banks soon decided to have a taste of the apple and incorporated subsidiaries to market “luxury estates”.
She relished being a mother figure and even though her staffers have kind words to say about her. In addition to heavily betting on real estate and petroleum marketing. Surrounded by lackeys and relatives. . a CBN debtor who is currently at the helm of the controversial African Financial Corporation. It is a pity that the United Nations Global Compact did not do a thorough investigation before they named her to its committee on corporate governance. effectively disenfranchising the bulk of the bank's shareholders. This transaction was packaged by Osaze Osifo. These included an unethical 400 million dollar football reality program and a shady raffle in partnership with the Suru Group. she signed documents without reading them and gave loans based on her personal judgement. Barth Ebong . Insiders say that the dim witted Cecilia Ibru was hopelessly out of her depth at the helm of the bank. its chief executive was neither ostentatious nor publicity-hungry. Mrs Ibru embarked on a number of questionable projects to raise money for her bank. It is now clear that years of mismanagement had turned the bank into a corporate cadaver. he had a measure of gravitas which turned out to be a mask for incompetence. Wale Tinubu and Mofe Boyo. The Slick Osifo had cultivated a friendship with Oboden Ibru. Union Bank also stunned analysts when it agreed to underwrite half of Afribank's overpriced public offer. the bank lent vast sums to the Delta State Government and other firms with ties to the powerful James Ibori. With the benefit of hindsight. the board moved its AGM to Maidugri. one should have guessed something was wrong with the big. The bank also perfected numerous ways of diverting money through imaginary companies. strong and reliable bank when last year. who doubled as the bank’s executive director and chief executive of Oceanic Capital. One of such transactions involved lending millions of dollars to Meggitto Clothing for the purpose of exporting fabrics. We now know that there were other shady transactions such as the incomprehensible 19 billion naira loan extended to Nigeria's most famous nanny. Osifo’s company Travant Capital Partners was selected as the financial consultants for the transaction.Only a powerful witchdoctor could have known that Union Bank was in trouble. When it became apparent that Oceanic Bank was tottering. Now it turns out that the dour Ebong also gambled heavily on high risk sectors. This money vanished into thin air. A former chief executive of Oando.dollar five year loan from Merrill Lynch. Oceanic Bank mismanaged this loan. Long criticised for its horrendous customer service and aversion to technology. Osifo had made a killing in Nigeria's GSM licence auction before joining the Oando triumvirate of Jite Okoloko. As the oldest bank chief. Alli and four other principals needed additional capital for their investment boutique and through Oboden. they acknowledge that there was too much laxity with respect to management issues. Mrs Ibru's son and heir apparent. Osifo. in response to a campaign to force its chief executive to resign. a financial consultant and business partner of Andrew Alli.
Jevcon shows up in the CBN list of debtors. He owes 88 billion. Oceanic and Afribank. The two firms forged a strong relationship that resulted in Adigwe joining AP's management board while Osa Osunde. 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. the suave Okey Nwosu approved a loan to Jevcon Oil and Gas. he was always quick to issue a quick retraction. A week before he was sacked. For years.So far. The authorities must also investigate how the trio of Nike Akande. The vacillating SEC DG clearly did not want to offend his benefactor and when SEC staffers like Charles Udora. a corpulent buffoon who somehow clawed her way to the zenith of Broad Street while earning a dubious professorship. The bank clearly had no long term strategy and one wonders if Mr Nwosu believed that oil prices would hit 400 dollars. It is hard to understand how she kept her job after she publicly claimed that CNN and the Internet caused the stock market crash. . Okey Nwosu .Onyiuke is an amazing creature. Afribank took out paid advertisements congratulating Ogbueshi Uche Luke Okpuno. Amazingly. Today.FinBank raised more than 100 billion from its public offer and invested heavily in the oil and gas sector. 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. Jevcon's chief executive. has not issued any public statement to counter the CBN’s claims. While the NSE is a privately-owned organization. Sebastian Adigwe . the effete Adigwe was a figurehead who pandered to the whims and caprices of the bank's powerful backers.Many analysts believe that Afribank's current problems stem from its relationship with African Petroleum. Part of Mallam Al-Faiki’s problems was that he owed his position to Madam Onyiuke’s friendship with President Obasanjo. Apparently. one of Okereke’s aides told me about Peter Ololo. an alleged front for Lucky Igbinedion. it is now clear that Okereke-Onyiuke has no business at the helm. one of its prized clients who later showed up on the CBN’s debtors list. The case of Mallam Musa Al-Faiki is a cautionary tale. How interesting. leaked their critical views to the press. Jite Okoloko and Festus Odumegwu ended up on the bank’s board of directors. It was widely celebrated as a testimony of the bank's devotion to indigenous operators in the maritime business. The 'Talented' Peter Ololo-Two years ago. Dr Onyung. Peter Ololo is in EFCC custody. The bank was heavily involved in financing Femi Otedola's takeover of the petroleum marketing company and the huge debt added to its woes. Union bank’s loan recovery efforts have yielded little fruit when compared to Intercontinental. doubled as Vice-Chairman of AP and Chairman of Afribank. she has allowed the Exchange to be controlled by compromised acolytes and highly-placed insiders. What was Mr Nwosu smoking? Ndi Okereke Onyiuke and Musa Al-Faiki-Ndi Okereke . A few weeks to the CBN action.
it wouldn’t be a bad idea to question the chief executives of these two “fund management” firms. Vanguard newspaper and the Northern Agenda. 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. At the time the article was published. I believe that such as test would have shown that Mrs Ibru. The head of this agency must be chosen through a transparent recruitment process that has nothing to do with ethnicity. the government should consider foreigners for the post. Vanguard published the article on March 23. those five banks were already heavily indebted to their peers at the inter-bank market and there were already concerns over their financial health. Pyramid schemes. Unfortunately. NDIC. Mr Akingbola and Mr Ebong were not suited to the task of managing their respective financial institutions. Let’s look at the timeline. Dayo Coker was already on the trail of Erastus Akingbola and had released his findings .A Otegbola. I don’t understand why the Nigerian public is taking this rag sheet seriously when Sam Amuka-Pemu’s “tissue paper” newspaper does not even qualify to be called a tabloid. If Mrs Waziri’s EFCC is serious about sanitizing the sector. 2009. While they were eventually closed down.Like every smart businessman. During the stock market bubble. DEAP Capital Management and Trust and DVCF Oil and Gas Fund. a shocking thing happened. Financial Services Authority Perhaps the CBN. These companies were empty shells whose complex schemes were powered by insider trading and exploitative business models. In fact. the indolent Nigerian press has not really scratched the tip of Ololo’s schemes. SEC and other agencies should seriously consider the idea of establishing a Financial Services Authority to supervise the financial sector. An effective FSA could have nipped this development in the bud. Unbelievable!!! In what must be a contender for this year's most stupid argument. the SEC and the CBN has still not resolved the matter. People should not be appointed to highly sensitive positions because of ethnic politics and tenure. the disgraced accountant also controlled two active publicly listed companies. If the head hunters conclude that no Nigerian is suitably qualified. Vanguard has backed its campaign against Sanusi with an article it published in March detailing a supposed plan by “anti-consolidation” forces to take over five Nigerian banks. 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. he filled his firm's board with power brokers such as Senator Tunde Ogbeha and Senator S. religion and other petty considerations. In addition to Falcon Securities.
And if Sanusi is a Fulani supremacist as his detractors have argued. 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. 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. the “newspaper” made a killing from the Vanguard Bankers Awards where a table for eight went for a whopping five million naira. What if the banks had collapsed? The banks didn't help matters with their dubious interest charges. Of course. They basically gave debtors an excuse to stall. Vanguard’s moronic journalists played along and concocted this baseless story to distract the new governor. Senior lawyers have told me that it is difficult to prosecute debtors when there is no evidence of fraud in the loan disbursement process. 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. 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. . 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 anticorruption war. From a logical standpoint. then it means that other non-Fulani Northerners are unlikely to support this purported plan. We must also consider the legal angle. As the CBN Governor has pointed out in newspaper interviews. this “northern agenda” argument holds no water. The CBN has done the right thing by releasing the list of debtors whose loans are not performing. other notable debtors such as the imperious Peter Odili have also headed to court. Some of our most respected corporate titans showed up on this list. His job will be made harder by his colleagues at the central bank. 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. In spite of the EFCC’s public relations blitz. The article was meant to preempt Sanusi and force him into making a compromise but he refused to buckle under pressure. For years.to the press. 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. Opinion and Analysis I doubt that Sanusi Lamido will be successful in ridding the financial sector of the crooks that call the shots. 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. The composition of the list shows that there is a problem with our banking sector. They understand how the system works and may not be committed to his disruptive agenda.
Contributed by Dayo Coker Policy Analyst .