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Troubled banks’ shareholders may lose investments –CBN
From ISAAC ANUMIHE, Abuja
Wednesday, November 4, 2009
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Sanusi, CBN Governor
Photo: Sun News Publishing |
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Indications yesterday emerged that the shareholders may have lost their money in the eight troubled banks as their investments are now negative.
Fielding questions from newsmen at the end of the Monetary Policy Committee (MPC) meeting in Abuja, Governor of the Central Bank of Nigeria (CBN), Mallam Sanusi Lamido Sanusi, said if proper accounting principles are followed, the shareholders have lost their money because what will remain at the end of the day will be moneys for the CBN and creditors.
“You understand that if a bank has taken its depositors’ funds and booked billions and billions of bad loans and bought billions and billions of shares that have lost value, by the time you apply proper accounting principles, shareholders funds are negative. Once shareholders funds are gone, in theory that bank is owned by creditors and by the Central Bank,” he said.
The governor who said that the apex bank is working frantically to ensure that the non-performing loans of the troubled banks are recovered so that the shareholders can have something at the end of the day disclosed that he was amused that some shareholders took the CBN to court.
“Everything we are doing now is saying, having addressed the problem and saved creditors and depositors. What can we do to maximize value for shareholders? When we engaged EFCC, I advised them to continue with debt recovery. The N171 billion the EFCC has recovered is it coming to the Central Bank? It is going back to the banks. Effectively, it is going back to the banks because it is loan recovery that has been provisioned coming back to the shareholders,” he explained.
According to him, some of those masquerading as shareholders have used their respective banks’ money to purchase those shares and are collecting fat dividends at the end of the day, adding that the ongoing forensic audit of banks had shown that most of those people have mortgaged their monies elsewhere.
He restated his call for the execution of corrupt managing directors, saying that in one of the banks, the sacked managing director approved loans worth N240 billion which is monthly allocation to states to his cronies.
He said the gravity of their offence would have attracted death sentence in China, regretting that it is only in Nigeria that people have sympathy for corrupt officials.
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