(L-R) Ibrahim Adamu, MD Integrated Microfinance Bank, Doyin Abiola, chairman and BEnjamin Aduli, vice chairman, Africa Capital and Business Support Limited at a media briefing in Lagos to announce recapitalisation of the bank

Shareholders of the rescued banks who may have been weighing the content of the Assets Management Company of Nigeria Limited (AMC), may be wasting their time as the management of the Central Bank of Nigeria (CBN), does not seem to have any other option for them to recoup their investments other than for them to embrace the new law or face an outright liquidation of their banks. This position may have put paid to the expectation that as the banks are gradually recovering, the apex bank may change its mind on its asset erosion logic which the shareholders have blatantly disagreed with.
Lamido Sanusi Lamido the CBN governor had told a Nigerian media during an elaborate interview that he will have no other option available to him if shareholders of the rescued banks decide to vote against selling their bad loans to the newly formed AMC than to liquidate them. This revelation is coming on the heels of mounting discontent among shareholders on the status of their holdings in the event of an AMC take-over of any bank.
“…we would have to invite shareholders to an AGM and you would have to vote to sell loans to AMC, to give capital to AMC and to merge with bank A or B. You have a right as shareholders to vote against it but what you need to understand is that if you go to the AGM and decide to vote against it, I will have no option than tell the world that shareholders did not give us any other choice but to liquidate those institutions. There are many ways we can do that, we could either declare them as failed banks or we cold move them to the NDIC to sell the assets and liabilities under purchase-and-assumption. Either way, the shareholder will end up with nothing”, Sanusi said.
Sanusi said that it is important for shareholders to know that “everything we are doing between now and the rest of this year is to save shareholders, because, really the shares they held are no longer worth the paper they are written. Their shareholding has been wiped out. What the banks did was to take depositors money and bet on the stock market, oil and gas and in some cases, stole the money and that has wiped out the banks’ capital”.
The CBN governor said that the AMC arrangement will give the embattled shareholders some minority stakes which they can trade on in the future when the stock fully recovers and begins to make profit. It could be recalled that the NDIC is still grossly entangled with the challenge of settling depositors of the 28 banks so far liquidated between 1996 and 2005.