The Nigeria Deposit Insurance Corporation (NDIC) through the Task Force on the Implementation of the Failed Banks Act is planning to re-arrest for prosecution, directors and officers of licensed banks and microfinance banks who had committed banking malpractices and had absconded.
The move will affect 15 former directors of Microfinance Banks, and two former directors of deposit money banks. The Task Force reviewed about 16 criminal cases being prosecuted under the Failed Banks Act in which prosecution had been stalled as a result of the fact that the accused persons in those cases had jumped bail and had absconded from the country in the heat of their investigation and prosecution. The sureties that took them on bail had also disappeared.
Analysts have raised concern that the cases involving directors of failed banks have been left unattended for too long and might be difficult to get the parties involved.
Johnson Chukwu, managing director and CEO, Cowry Asset Management limited said if there is criminal cases against the former directors, that should form the basis for prosecuting them.
“Where criminal case is established, I would ordinarily support the prosecution but this has been too long. I think the government should focus on new cases than attending to old issues”, Chukwu told BusinessDay by phone.
In a statement signed by Taribo B. A. Director of Legal Department, NDIC Chairman Of The Task Force On Implementation of Failed Banks Act, the Task Force noted that some of those accused persons had sneaked back into the country in the hope that their prosecutions might have been terminated. It is against this backdrop that the Task Force gave the notice that such accused persons would be re-arrested and prosecuted to serve as a warning to other bank offenders, adding that the Task Force would leave no stone unturned to ensure that erring bank offenders were brought to book.
The Task Force had at its 38th meeting held on March 13, 2017 reviewed some pending investigations by the Police Financial Malpractices investigation Unit (FMIU) under the Failed Banks Act comprising 17 cases involving 10 closed Microfinance Banks (MFBs) in which 15 former Directors of the MFBs were involved.
It also reviewed two cases of closed Deposit Money Banks (DMBs) involving their former Directors. One of the closed DMBs cases currently under prosecution was FRN vs. Prince Adekunle Adeyeba and Ors where the accused persons being erstwhile directors of the closed Gulf Bank of Nigeria Plc. were facing trial over banking malpractices involving N15.1 billion of depositors funds in that closed bank.
The Failed Banks [Recovery of Debts] and Financial Malpractices in Banks Act 1994 [Failed Banks Act] was promulgated to recover debts owed to Failed Banks which had remained outstanding as at the date the banks were closed or declared failed and to prosecute directors and officers of licensed banks who had committed banking malpractices.
In July 1995, the Inspector General of Police established a special Police Unit called the Failed Banks Inquiry to assist the Nigeria Deposit Insurance Corporation and the Central Bank of Nigeria implement the criminal aspects of the Failed Banks Act through investigation of criminal complaints referred to the Unit by the Regulatory Authorities.