Smear campaign is now a strategy being employed by some banks’ debtors to avoid repaying their debts. To what extent will the CBN allow this development to go on? This question to which, ROSEMARY ONUOHA in this piece, seeks answer.

AT the height of the banking crisis resulting from the Central Bank of Nigeria (CBN) sanitisation intervention,  the CBN made public the names of bank debtors. Consequently, the Amcon law came into place. As it is now, bank debtors have no hiding place. However, it is alarming that sponsored and carefully orchestrated smear campaigns against management of some banks is being masterminded by some loan defaulters just for the purpose of avoiding repaying these loans.
Mr. Obadiah Mailafia, an industry expert stated that the signing into law of the Amcon Bill is a welcome development as far as the issue of absorption of the toxic assets of the banks and also its implications for access to bank credit are concerned. But beyond that, the coming into force of the corporation should be guided by appropriate regulatory and supervisory frameworks that are needed to effectively monitor what the banks are doing and to ensure that all players are playing the game according to the rules, he stated.

Some allegations
The allegation against Spring Bank was that Mrs. Sola Ayodele, the group managing director/chief executive officer and key officers of the bank had been charged to court for allegedly defrauding Strand Capital Partners Ltd the sum of N5.2 billion, for which the GMD/CEO of the bank was declared, wanted.
The bank revealed that from the foregoing, it becomes obvious that the sponsored and carefully orchestrated smear campaign against the new management of the bank was masterminded by the Kola Daisi family, who are owners of both NSL and Strand Capital Partners Ltd, in order to avoid the critical issue of repayment of over N7 billion debt which it has owed the bank since its consolidation in 2006. The bank vowed to frustrate every effort by the smear campaigners to fraudulently take away N5.2 billion from the vaults of the bank.
In the case of FinBank Plc, the bank noted that the attempt by Zumax Nigeria Limited to portray its current management as fraudulent is unfounded as the issue in question is a subject of litigation; some of which were instituted at the instance of the bank. Responding to a fraud allegation in respect of N200 million facility granted Zumax by IMB International Bank, one of its legacy banks, FinBank expressed dismay that Zumax, which failed in meeting the loan repayment terms has rather embarked on a smear campaign against the bank and its current management. It should be noted that FinBank was not even in existence in December 2002 when the dispute arose. The bank said it is instructive to note that the court ruling referred to in Zumax’s publication in which it claimed the bank was culpable was not a final decision but a mere ruling on a preliminary application without delving into the merits of the case. It could be recalled that one of the mandates given to the turn-around managers appointed for the bailed-out banks is the recovery of all debts owed the institutions. The management of FinBank said no amount of smear campaign by defaulting creditors would deter it from pursuing the recovery of debts owed the bank.

Some actions
Spring Bank came out to state that the Central Bank of Nigeria (CBN) has exonerated its management from any allegations of fraud. The bank revealed that the CBN in a letter dated September 14, 2010 to the Principal Solicitor, Legal Resources Alliances, who are legal advisers to Strand Capital Partners stated clearly that Strand Capital’s claims to N5.2 billion from Spring Bank cannot be established.
The bank stated, “At the meeting of the CBN examiners with the petitioner on 19th January, 2009 and the subsequent meeting held with the directors of banking supervision, CBN, on 23rd February, 2010, your claim that Spring Bank’s offer letter of 7th July, 2008, extending a N5.208 billion underwriting line facility to Strand Capital Partners Limited was an irrevocable underwriting agreement in accordance with the enabling statutes between Spring Bank Plc and NSL could not be established because you failed to provide a copy of an executed underwriting agreement between the bank and NSL. Your assertion that the offer of an underwriting facility could be construed and treated in a similar manner as an underwriting commitment could not also be substantiated while your promise to provide evidence as requested by the CBN has not been complied with up till time of writing this letter.”

Stakeholders react
To avoid unnecessary bickering, the CBN counseled that if a case is before a competent court, the parties should allow the court process to run its course.
Meanwhile, stakeholders in the banking sector have called for a probe into the allegations of fraud levied against the management of these banks.
Chief Aderemi Oyepeju, chairman of Ibadan Zone of Shareholders Association, said such a probe was necessary to prosecute those behind such malicious and wicked allegations against innocent and hardworking bank officials who have ensured the safety of depositors’ funds.
Oyepeju said, “Having studied the allegations, it would appear that the real culprits in the matter are sacred cows being protected by the system. We condemn in entirety, what we have been reading in the newspapers and we use this opportunity to state categorically that we are behind the management of Spring Bank because we have been following this case even before this current management was appointed by the Central Bank of Nigeria (CBN).”
He also called on all those that still owe banks to pay up, threatening that all stakeholders are poised to join forces with the banks to seek the services of the Economic and Financial Crimes Commission (EFCC) to retrieve all outstanding debts to the bank. 
Speaking in the same vein, Alhaji Mukhtar Mukhtar, chairman Shareholders Trustees Association called on the government to thoroughly revisit the fraud allegation with a view to permanently bringing the matter to an end. He stated, “We would want the government to take another detailed look into the case. A situation where some individuals or companies would plot to defraud the bank only to turn around to threaten the management of the bank for not allowing their evil intention to succeed is not acceptable to us.”
Mr. Gbenga Idowu, national coordinator of the Shareholders’ United Front, called on the relevant security agencies to ensure the safety of the management and staff of the bank who foiled the attempt to defraud it.