Anxiety Grips Banks Over Diezani’s Alleged Laundered $115bn | Independent Newspapers Limited
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Anxiety Grips Banks Over Diezani’s Alleged Laundered $115bn

diezani allison
Posted: May 9, 2016 at 4:48 am   /   by   /   comments (0)


Bamidele Ogunwusi



There is a growing anxiety in the banking industry following the arrest, detention and interrogation of some banks’ managing directors last week by the Economic and Financial Crimes Commission (EFCC) over their role in the former minister of petroleum, Diezani Allison-Madueke’s alleged laundered $115 billion.

The commission has already visited Fidelity Bank, Sterling Bank and Access Bank to interrogate their officials on the alleged laundered funds and bribe cases levelled against them.

Independent gathered that bank executives are in panic and are making efforts to look at their books closely in order not to be caught unawares.

Depositors, investors and shareholders, on their part, are also worried about the fate of their banks on conclusion of the investigations, though stocks of the affected banks are yet to be affected by the development.

The EFCC, Independent learnt, is going round banks to examine documents that could assist it in tracing the alleged laundered funds and money used to allegedly bribe Independent National Electoral Commission (INEC) officials during the last general election.

Mr. Nnamdi Okonkwo, the Managing Director and Chief Executive Officer of Fidelity Bank, has been asked to step down by the board over the case and another person appointed to manage the bank in the interim in order to protect the image of the bank. The bank’s Executive Director, North, Alhaji Mohammed Lawal Balarabe, has been appointed by the board as its acting MD/CEO. The appointment, ostensibly, was to ensure seamless operation at the financial institution and to prevent a run on the bank.

The transaction which is still under investigation was alleged to have violated the Money Laundering (Prohibition) Act. Under the Bank and Other Financial Institutions Act (BOFIA) and Money Laundering Act, banks are mandated to report unusual transactions. Fidelity Bank, however, is insisting that the transaction was duly reported to appropriate unit. Sterling Bank’s MD, Yemi Adeola, and that of Access Bank, Herbert Wigwe, were also quizzed and released last Friday after allegedly refunding some of the money.

Boniface Okezie, chairman, Progressive Shareholders Association of Nigeria, said government is free to prosecute any bank and free to collect public money as long as the bank is guilty of the offence alleged.

However, he warned that banks should not be victimised for playing their roles in the financial intermediation towards national economic development.

Sunday Adefila, a bank customer, said it is dangerous to keep people in darkness on what government is looking for in those banks.

“We need to know why these banks are being investigated so that we could take decision against them on time before we start losing our money in them. The ongoing exercise could cause mass withdrawals in banks as we don’t know the next bank they will storm,” he said.

For Anor Anyanwu, former Deputy Managing Director of Mainstreet Bank, the raid on banks’ CEOs on the alleged laundered money would not have any impact on the fortunes of the affected lenders.

“I don’t think the raid on CEOs of banks has any impact on their customers, their business and if the banks have followed due process in their transactions, then there should be no worry,” he said, adding that banks have procedures and processes.

“I don’t see a situation where banks will breach their own procedures and processes,” he pointed out, stating that the arrests or raid on banks by EFCC cannot cause any bank to go down.

According to Albert Oladapo, a financial expert and legal practitioner, the presumption of people that such moves would impact on the integrity of the economy and that it would affect the confidence of investors in the financial services sector is not totally correct.

“To me, this is a presumption because whatever you do to sanitise the system will always be in the overall interest of the economy. I think it will have an immediate effect of shaking the confidence of investors and all kinds of stakeholders but the ultimate impact will definitely benefit the economy,” he said.

Matthew Ogagavworia, a financial analyst, banker and a former stockbroker, said

that there are certain prohibitions that bankers are supposed to know but once in a while bankers do many things to please their customers even when they know they are against the rule.

“For their CEOs to have been found to breach money laundry rule, forex rule or bankers-customers rule it is not good for the economy. What it also means is that there are lots of weaknesses in terms of Central Bank of Nigeria (CBN) regulation of deposit money banks,” he said.

Independent, however, gathered that some customers have been making some massive withdrawals from the affected banks in anticipation of the backlash of these raids.