Let me start this write up with lamentation. We, (I mean Nigerians) missed the man called Alhaji Umaru Yar’Adua, President of the Federal Republic of Nigeria May 29 2007 to November 2009 sorry, May 5 2010. Why do we miss him? He was determined to enforce the rule of law in an otherwise lawless country that Nigeria became due to the influence of the military in governance for 28 odd years. May his gentle soul rest in perfect peace, Amen. Lamentation is inevitable in the circumstance because it appears that the concept of rule of law died with him.
Nevertheless, his death presents President Good Luck , sorry, Goodluck Jonathan with an opportunity to write his name in gold if he puts his feet down and insist on the rule of law in the recent nationalization of banks in which many Nigerians believe is tainted with corruption. Corruption is an omnibus word with multi-dimensional meaning attached to it depending on the context. According to Black Law Dictionary, “corruption is an act done with intent to give advantage inconsistent with official duty and the right of others. It is an act of an official or fiduciary person who unlawfully and wrongfully uses his status or character to procure some benefit for himself or for duty and the rights of others.
“Corruption involves the dishonest or preferential use of power or position which has the result of one person or organization being advantaged over another” Let us summarize the events that took place prior to nationalization to determine whether all the dramatis personae , that is , the Central Bank Of Nigeria, (CBN, ) Nigeria Deposit Insurance Corporation, (NDIC), and the Asset Management Corporation of Nigeria, (AMCON) acted in a corrupt manner. As part of the cleansing the banking system of corrupt practices, the CBN Governor Sanusi Sanusi sacked the Managing Directors of eight banks that were, by CBN’s examination report in grave financial position. , That was in September 2009.
They were subsequently given two years grace period to re-capitalize or face liquidation. When public opinion pointed at possible takeover of the rescued banks, in which the CBN injected N620 billion, CBN Head of Corporate Affairs said in defense that “neither the CBN nor the Federal Ministry of Finance had any plans to nationalize any of the rescued banks” That statement cooled shareholders’ rising tempers but Sanusi’s utterances, body language and the road shows he staged in London asking foreigners to come and buy the rescued banks prompted the shareholders of the now nationalized banks to institute legal action against CBN. Among other things, they challenged the powers of the apex bank to unilaterally sack the entire board of directors and management without the approval of shareholders and appoint new ones.
CBN took other actions the last one being setting September30 2011 as the deadline for all rescued banks to conclude their re-capitalization plan already approved by the CBN. But in dramatic breach of its own time table, the CBN revoked the operating licenses of Afribank, Bank PHB and Spring Bank on Friday, 5th September 2011, seven clear weeks to the recapitalization deadline on the excuse that the banks are not likely to conclude their re-capitalization plan before the widely advertised deadline. The CBN subsequently handed over the three banks to NDIC which in its wisdom sold the banks to AMCON. The sale was followed by an announcement nationalizing the banks and converting them from public limited companies to private limited companies without due process.
All these actions took place in a hush-hush manner over a week end. It is very clear that the whole transaction is tainted with corrupt practice on the part of CBN, NDIC and AMCON which unfortunately are organs of government that is committed to fighting corruption. What a way to fight corruption by subversion of the rule of law which is why we all miss President Umaru Yar’Adua. How did these institutions commit acts of corruption? First it is an act of corruption for the CBN to revoke the operating licenses of banks that are plaintiff in a suit in which CBN is a defendant that is pending before a court of competent jurisdiction.
By that action the CBN has used its legitimate power to revoke banking license to commit extra judicial murder of the banks. Pray, with the revocation of license the corporate body called Afribank, Bank PHB, and Spring Bank have no locus standi to continue with the case since the “res” has been determined. Of course without banking license there is no bank. Second NDIC acted in a corrupt manner by selling the banks to AMCON instead of liquidating them which is its statutory function. Pray, what title did NDIC pass on to AMCON? The answer is no title. NEMO DAT QUOD NON HABET rule applies. You cannot give what you don’t have Sanusi’s common sense reasoning that shareholders have lost their investment and therefore have no say in banks appears mis-guided and absolutely unknown to law.
It is only after a company is wound up , its assets realized in cash and distributed to all classes of creditors with nothing for shareholders that one can validly say that shareholders have lost their investment, The, the action of AMCON is the most corrupt. There is no where in the banking world where the Central Bank of a country will give bail out loan to banks as a lender of last resort and convert it to equity Indeed when Sanusi cleverly said in 2009 that the N620 billion was convertible loan, those of us who could read between the lines knew he was up to something.
That something has now manifested in nationalization of banks without an enabling law, akin to the repealed General Gowon’s Nigerian Enterprises Promotion Decree of. 1972 and General Obasanjo’s subsequent amendment in 1977. Are we now in a banana republic? The incoming administration must review the corrupt manner banks were nationalized with a view to compensating the share holders of these banks and punishing all those responsible for the illegal act.