|
The Economic and
Financial Crimes Commission, EFCC has
described an allegation that it is
taking ten (10) percent of funds being
recovered for banks as a blatant lie and
a cheap blackmail that cannot stop the
anti-graft agency from its present
involvement in the sanitisation of the
nation’s financial sector.
The Commission in a
statement yesterday also described the
accusation as not only ridiculous but a
well scripted falsehood designed to
create a distraction from the on-going
prosecution and investigation of those
that have abused their positions and
betrayed depositors.
‘Information
available to the Commission shows that
some persons that have felt
uncomfortable with the involvement of
the EFCC in the bank sanitisation
efforts, especially those that have
criminally lived big on depositors
savings and those that have lost their
debt recovery briefs from their
collaborators in the banks, have been
sponsoring this falsehood hoping it will
stick and stop the Commission from
forging ahead in their prosecution.
‘For the avoidance of
doubt and the benefit of the public, the
Commission has not at any time demanded
or collected any cut in whatever form
from any bank over funds so far
recovered for the bailed out banks or
any other. As such, attempts to
blackmail the EFCC through sponsored
reports cannot achieve the expected
result of the sponsors, rather they will
serve as an elixir in our determination
to dig deeper into the rot the sponsors
of the blackmail have created for their
benefit and that of their collaborators.
It should be noted
that the Commission is propelled to go
this far in the bank sanitisation effort
not as a result of any monetary gain,
which is really non-existing, but
because of the need to safeguard our
nation’s economic stability along with
other stakeholders.
We wish to state
the following for the benefit of the
Nigerian public that are at the risk of
being swayed by self-serving arguments
being canvassed in some quarters.
We understand
that section 7 (2) of the legislation
establishing the Commission states that
the EFCC “shall be the coordinating
agency for the enforcement of the
provisions” of the following key
legislations:
1.
The Failed Banks (Recovery of
Debts) and Financial Malpractices in
Banks Act 1994.
2.
The Banks and other Financial
Institutions Act (BOFIA) 1991
These two laws
alone should suffice to justify the
involvement of an organization like the
EFCC in the bank cleansing exercise and
the recovery of loans by the Central
Bank of Nigeria. However it may be
necessary to go beyond that. The general
issues arising from the exercise in
Nigeria have shown that margin loans,
other forms of loan facilities and
Infraction by lenders, are the critical
areas that rogues within the system
utilized.
A
simple loan facility does not at face
value invite the EFCC. However where the
loan process from application, through
processing, to approval, disbursement,
utilization and finally repayment has a
criminal flavour, then the EFCC will be
involved because a criminal law has been
flouted. The scenarios that have
justified our involvement are as
follows:
(i)
Loan Application Stage: Customer
represents that it wants a loan for
working capital purposes but utilizes
the loan for private use. That is
obtaining by false pretences and the
EFCC established several such cases.
(ii)
Loan Processing Stage: Officers
of the bank are compromised and
recommend a loan which the fundamentals
and cash flow would ordinarily not have
supported.
(iii)
Loan Approval Stage: The Chief
Executive of a bank approving loans that
have been turned down by the Credit
Committee of the Board of Directors.
(iv)
Loan Disbursement Stage: What if
part of the disbursement went into
private pockets and not the purport
customer? This is a classic case of
money laundering that the EFCC
established in respect of several
accounts.
(v)
Loan Utilization Stage: Utilizing
the loan to mop up the bank’s shares
(Contravenes BOFIA which criminalizes
it) which we have discovered in many
instances.
(vi)
Repayment Stage: Where the terms
of the loan states that the cash flow
from the business financed is supposed
to be paid to the bank but borrower
diverts same. It is criminal diversion
of funds.
(vii)
Collateralization Stage: Contrary
to the banks’ own credit policies,
undeserving companies were given
unsecured loans. In a single case, an
unsecured loan of about $100 million was
availed to a company whose balance sheet
size and cash flow would not support
even a secured loan for that amount.
The
investigations also established the
existence of fictitious collateral and
customers criminally tampering with the
collateral given or even a bank
accepting collateral unknown to law or
not legally viable.
In view of this
explanation, the Commission wishes to
emphasise that it will in no way succumb
to any blackmail sponsored by
self-serving individuals over on-going
investigation and prosecution of bank
executives and defaulters. We see their
campaign of calumny as a challenge to
dig deeper into their criminal records.
Femi Babafemi
Head, Media & Publicity
8/11/09
|
