No Hiding Place For Guilty Skye Bank’s Officials, Directors – NDIC

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  • Good news for failed MFBs’ depositors

BY CHINYERE OBIORA LAGOS – The Nigeria Deposit Insurance Corporation (NDIC) says there is no hiding place for all top management officials and directors culpable in the financial mess that caused Skye Bank Plc to fail.

Already, law enforcement agencies are on the trail of all key players to investigate and establish their blameworthiness in the failed Bank, now re-named Polaris Bank Plc.

By the interim Risk Assessment and Forensic Investigation Reports, indications are that huge insider abuses and poor corporate governance by the erstwhile management was largely responsible for the bank’s misfortune.

This is even as the Corporation has commenced payment of insured funds to depositors of the 154 Microfinance Banks (MFBs) and six Primary Mortgage Banks (PMBs) that had their licenses revoked by the Central Bank of Nigeria (CBN) recently.

Managing Director and Chief Executive of the NDIC, Umaru Ibrahim dropped these hints at the Corporation’s, 2018 Sensitization seminar for Federal High Court Judges with the theme; ‘Challenges to Deposit Insurance Law and Practice in Nigeria’.

Ibrahim said the NDIC, in liaison with CBN, is currently monitoring investigations and quizzing of all affected officials by anti-graft agencies.

He said so far the Investigation Reports showed that the sacked management’s culpability in gross disregard for banking ethics and general financial malpractices caused the Bank’s collapse

The NDIC boss said the reports, among other worrying issues, identified fraudulent accounting processes; manipulation of accounting records to present false profits and ratios; unlawful loans and credit facilities, non-disclosure of directors’ interests and lending beyond the single obligor limits, as being responsible for the hammer that eventually descended on the bank.

He also explained that by implementing the bridge bank resolution option that established Polaris Bank Ltd to assume defunct Skye Bank’s assets and liabilities, the NDIC ensured depositors’ unrestricted access to their funds; continuity of operations of over 300 branches and the preservation of over 6,000 jobs across the country.

Mr Ibrahim also indicated that the Corporation has commenced payment of insured funds to depositors of the MFBs and PMBs that lost their licenses due to obvious infractions CBN’s rules and regulations.

According to him, the Corporation is delivering on its statutory mandate as the appointed Liquidator through a Winding Up Order granted by the Federal High Court, stressing that a strong partnership between NDIC and the Judiciary in deposit guarantee and safeguarding Nigeria’s banking industry cannot be overemphasized.

He described it as a valuable engagement towards developing the nation’s financial system and strengthening the the Corporation’s hands in effective implementation and delivery of its statutory mandate.

He said the Federal High Court Judges’ workshop was specifically designed to address topical issues in bank supervision such as the regulatory framework of systematically important banks; robustness of the legal system to facilitate criminal prosecution of Bank Directors; and debt recovery under the Failed Banks Act.

In his remarks, Chief Judge of the Federal High Court, Hon Justice Abdul A. Kafarati said the seminar has ensured a deeper appreciation of the implications of the NDIC’s mandate and activities that has led to more proactive and accurate adjudication of cases brought before the courts.

Justice Kafarati commended NDIC’s management for its continued interactions with judicial officials through the sensitization seminars, even as he canvassed broadening the scope to include topical issues that would further deepen the impact and understanding of the financial sector.

He stated that such development would assist in addressing existing and emerging regulatory issues in the financial system as well as effective dispensation of more informed judgment in the overall interest of Nigeria’s financial sector.

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