Hanging Fortunes

Ganiyu Ogunleye, the managing director, NDIC

The pain of losing deposits to liquidated banks in Nigeria is further compounded by litigations and recent allegations of fraud levelled against the Nigerian Deposit Insurance Corporation, NDIC, over Fortune Bank’s assets
By Bayo Amodu
As he lay prostrate on his sick bed, Emmanuel Achike, 45, could only mutter a few words which bespoke the pain surrounding his misfortune. In December 2003, Achike opened an account with Fortune Bank Plc, Lagos and by the end of 2004, his total lodgements into the account stood at over five million Naira. Unfortunately, Fortune had the misfortune of being among the 14 banks that could not scale through the recapitalisation exercise of 2005.
At the time, though Achike received words of encouragement from the management of the bank, and from the Nigerian Insurance Deposit Corporation (NDIC) that his money would be paid back to him after some time. But Achike knows too well that things will never be the same again. “That was not the first time banks will be liquidated in Nigeria, every time it happens, depositors are always at the receiving end,” he lamented at the time.
Four years after the consolidation exercise, over 900,000 bank depositors, according to the NDIC, still have their funds trapped in failed banks.
According to Ganiyu Ogunleye, the managing director, NDIC, who reeled out the reason behind the slow recovery of depositors’ funds, since the nation’s return to democracy the Failed Banks Tribunal set up to prosecute both criminal and civil cases arising from bank collapse have been thwarted and as a result only 104 persons have been convicted since the end of December 1999, out of 2,464 cases while only N3.541 billion was recovered through the same tribunals.
He disclosed that three banks are still in court over their post-consolidation demise. These, according to him, are Fortune Bank Plc, Triumph Bank Plc and Peak Merchant Bank, adding that what many of the indicted individuals did is to go to court to avoid arrest and prosecution, at the same time denying innocent depositors access to their money.
However, in what looked like a case of the hunter being the hunted, the NDIC, established through Decree 22 of 1989 to protect the interest of depositors, Ogunleye and five others were charged before an Abuja High Court with a N1.58 billion fraud by the Police on May 14, 2009. The accused were alleged to have conspired to defraud Fortune Bank of that sum of money.
The five other accused are: NDIC's Executive Director, Operations, Peter Umoh; two Interim committee members of the bank, Joe Emerson and Innocent Ilozumba; a bank manager, Adedapo Agboola and former Fortune Bank Chief Accountant, Pius Obeleke who failed to show up when the matter came up at an Abuja High Court last Monday, June 22, 2009. They were alleged to have placed recovered billions of naira, in liquid cash and assets of Fortune Bank, in several commercial banks and pocketed the interest.
Ogunleye, Umoh, Emerson and Ilozumba were alleged to have conspired and unilaterally granted 60 per cent waiver, totalling N500 million on the indebtedness of Nassarawa Investment and Mineral Development Company (NIMDCO), to Fortune Bank.
The multi-billion naira loan was said to have been secured by NIMDCO from the bank to finance the construction of Karu International market in Nassarawa State. The accused were also alleged to have deceitfully sought the approval of former Finance Minister, Shamsudeen Usman who currently is Minister of National Planning several months after they granted the waiver. They were also alleged to have dishonestly deposited the sum of N1.58 billion recovered from the Nassarawa State Government with Fidelity Bank Plc, instead of a designated Fortune Bank Account No 023-01236-41-55-3 with the Central Bank of Nigeria (CBN) last August.
In counts five and six of the seven - count charge, Emerson and Ilozumba were alleged to have conspired and fraudulently converted to their use N12 million of Fortune Bank's recovered assets from Earth Airline Services Limited. Emerson, Ilozumba, Agboola and Obeleke were further alleged to have stolen N2.8 million, part of the N1.058 billion loan recovered from Karu International Market. The charge was filed by the Commissioner of Police in charge of Legal and Prosecution at the Force Headquarters, Ibrahim Ringim, while a Fortune Bank depositor, Sylvester Odigie, who petitioned that his N346 million was trapped in the bank, is listed as a prosecution witness.
It was Senator Nkechi Nwogu, chairman of the Senate Committee on Banking, who in a letter to the Inspector General of Police (IGP), Mike Okiro and the chairman of the Economic and Financial Crimes Commission, EFCC, Waziri Farida, in March 2009 requested for assistance and explanation on the issue of $30 million that was recovered by the EFCC on behalf of Fortune Bank and Suffolk Petroleum and Shell Petroleum Development Company SPDC, and where the money is; the whereabouts of N1.5 billion claimed to have been recovered by the NDIC and the Interim Management Company (IMC) from proceeds of the sale of Karu Market from Nasarawa State Government, on behalf of Fortune Bank and other related matters. The Police, based on this, swung into action in search for the interim managers and officials of NDIC for interrogations.
The Source learnt that when the police arrived Fortune Bank headquarters in February to arrest the interim managers, they simply ran for cover. But they were later arrested at the premises of the NDIC two weeks later, after the police had mounted a siege for them. Police sources said they invited Ogunleye following the interrogation with the interim managers and he showed up after he had earlier refused to oblige the police invitation. He was said to have been released on bail after he had made a written statement.
Meanwhile, the NDIC insisted that the N1.4 billion liquid asset of the bank is still intact – and that it, in fact, is buoyed with interest. Ogunleye maintained that the fund, which is with Fidelity Bank Plc, has yielded N83 million interest as at the time the police got involved, adding that some of the figures being brandished by the distressed bank owners are not correct.
“Parts of the property being claimed by the owners of the bank is Fortune House in Lagos, at N4 billion. Unfortunately, the same house has been used as clearing collateral with Union Bank and the bank in turn has also sold the house for N2 billion. But I can tell you that the N1.4 billion liquid assets is intact, and with interest,” Ogunleye said.
Former Managing Director of Fortune Bank, Fidelis Tilije, commenting, said he stood by the presentations he made to the Senate Committee on Banking during a public hearing earlier in the year. Tilije had at the time insisted that the bank had cash and that its balance of N7.086 billion, which he said should be enough to pay 100 per cent of all private and corporate depositors.\
The Source gathered that the banks in court opted for legal battle since Societe Generale Bank of Nigeria, SGBN, and Savannah Bank had been able to secure the release of their revoked licences through court processes.
Investigations by The Source also show that over 50 banks have been liquidated since 1994. The highpoint of this liquidation exercise has been failed banks, without due compensation to depositors.