Erastus Akingbola, former MD/CEO of the Intercontinental Bank PLC wrote a damning petition against a former Governor of the Central Bank of Nigeria (CBN), Lamido Sanusi and a former Senate President, Dr. Bukola Saraki.

In August 2009, the apex sacked with immediate effect the then-Managing Directors/Chief Executives and Executive Directors of five banks namely, Afribank PLC, Finbank PLC, Intercontinental Bank Plc, Oceanic Bank Plc and Union Bank Plc.

The affected chief executives were Mr, Sebastian Adigwe (Afribank), Mr. Okey Nwosu (Finbank), Akingbola (Intercontinental Bank), Dr. (Mrs.) Cecilia Ibru (Oceanic Bank), and Dr. Bath Ebong (Union Bank).

The CBN subsequently announced the appointments of new acting chief executives for the five banks. They are Mr. John Aboh – MD/CEO Oceanic International Bank Plc; Mr. Mahmud L. Alabi – MD/CEO Intercontinental Bank Plc; Mrs. Suzanne Iroche – MD/CEO Finbank Plc; Mrs. Funke Osibodu – MD/CEO Union Bank Plc and Nebolisa Arah – MD/CEO of Afribank.

Sanusi, who was the CBN governor at the time, said the bank MDs were removed due to the high level of non-performing loans in the five banks.

The former Emir of Kano blamed this on poor corporate governance practices, lax credit administration processes and the absence or non-adherence to the banks’ credit risk management practices.

However, Akingbola in his petition denied the allegations and alleged that Sanusi had selfish reasons for sacking him as the MD/CEO of Intercontinental Bank Plc. He also accused Saraki of using his political power to work with Sanusi to ensure the takeover of his bank, especially since an earlier move by Saraki to have his family’s Societe Generale Bank merge with IB Plc failed.

Akingbola’s Petition

Akingbola wrote in the September 2010 petition, “About two and a half years ago, Dr. Bukola Saraki requested that we merge Societe Generale with Intercontinental Bank (IB) Plc. We conducted a due diligence exercise and noticed N30bn negative capital – so the board of IB Plc turned it down. Dr. Saraki was very unhappy.

“When time came for the renewal of Gov. (Charles) Soludo’s appointment as CBN Governor, Dr. Saraki blocked it with late President (Umaru) Yar’Adua and brought him Lamido Sanusi. Being my customer, Dr. Saraki confirmed this personally to me.

“Lamido Sanusi was appointed CBN Gov. on 4th June, 2009, and on the 18th June - after just two weeks in office – he sent CBN examiners to five banks including IB Plc. This was quite unusual, as the CBN had just completed a comprehensive examination of IB Plc as part of normal protocol. The result of this was good.

“The new examination finished in mid-July, and we were expecting their report. Suddenly, they returned claiming that several accounts, which they had verified and agreed with us as “performing”, were now reclassified “non-performing”.

“Despite these manipulations, IB Plc’s ratios were alright. Unusually, the CBN examiners returned on four separate visits to reclassify even more accounts as “non-performing”. These even included what we regarded as our best accounts.

“This prompted me to ask some of the examiners what was really going on. They confided that the new Governor was bent on removing certain bank CEOs, and wanted to show that IB Plc was too exposed to bad loans. They said he formed a team in CBN reporting to him directly. Each completed examination report was turned down if it was not damning enough and they were ordered to go back until they achieved certain ratios.

“One of the examiners showed me a report on IB Plc, which was favourable. This has been rejected by the CBN Governor, as it did not justify or warrant my removal.

“Quite disturbed by this development, I decided to speak to Dr. Bukola Saraki, since he recommended Malam Lamido Sanusi’s appointment. He told me that the CBN Governor was unhappy with myself and Mrs. Ibru (of Oceanic Bank) because according to him, we had contributed N6bn to the Senate to block Lamido Sanusi’s confirmation as CBN Governor. I refuted this allegation telling Dr. Saraki that my religion would never allow me to do such a thing, as no human can undo what God has ordered in Heaven.

“I immediately booked an appointment to see Lamido Sanusi in the CBN and questioned him regarding the N6bn Senate bribery allegation. He said he had put that behind him, as “not all kingmakers in council will support the choice of a new Emir”. I once again reiterated my innocence, based on my religion, that the God I serve will never permit me to try to block someone else’s good fortune.

“Later, I mentioned to Alhaji Aliko Dangote the strange repeated CBN examinations and the allegation by Lamido Sanusi. He promised to speak to him and ask him about the matter. Surprisingly, Alhaji Dangote returned to say Lamido Sanusi revealed that he was told of the alleged bribe by Dr. Saraki, and that I even lobbied him to be the CBN Governor.

“Apparently, it was Dr. Bukola Saraki inciting Sanusi against me, as a way of removing me and taking over IB Plc. It has now become evident that both Dr. Saraki & Malam Sanusi used the opportunity of the worldwide financial crisis of 2008- 2009 to jump into certain banking institutions and take them over. The crisis had been acknowledged and was being well managed by Professor Chukwuma Soludo, the former CBN Governor.”

According to Akingbola, the defunct Intercontinental Bank did not operate in isolation, the “entire industry was affected, as others worldwide”.

He noted that the Nigerian economy was hit by four economic catastrophes which he listed as: “The oil price drop from $147 per barrel to $30. All oil importers refused to sell in a hurry at this new low price, so banks had to give them time for the price to improve.

“The worldwide stock market collapsed and this led all foreign investors in the Nigerian stock exchange to hurriedly sell their shares. This further depreciated the Nigerian stock exchange index, also having an adverse effect on the banking industry.

“The CBN, in response to crashing oil price, devalued the Naira by 40%. This meant importers with unsettled bills had to source more Naira to buy Dollar, and thus, put a strain on bank customers and the loan portfolio of the banks.

“The sudden devaluation of the Naira by 40% caused a panic among overseas banks that had dollar placements with Nigerian banks. They immediately gave notice and withdrew their funds. IB Plc lost $1.2bn in this way.”

He alleged that instead of Sanusi performing the role of ‘lender of last resort’, he used the crisis to “take over banks for his mentor”.

He further wrote, “All these banks had prominent Nigerians waiting to buy them at “knock-down” or give-away” prices. However, the media altered the equation.

“On the 14th of August 2009, without any discussion, Malam Sanusi issued me a letter of removal as CEO of IB Plc. He also removed all executive directors of the bank with armed policemen.

“The letter (copy attached), said that based on the examination he ordered on the 18th June, 2009, it is in the public interest for the CBN to intervene by taking over the bank.

“Till today, no report of the examination has been made available to me, the management, or the Board of the bank. We had no opportunity to learn how the CBN came to its decision, nor were given an opportunity to respond to the examination report, as is the usual process.

“My removal by Malam Sanusi was done in flagrant disregard of the legal provisions regarding the removal of bank directors (i.e. Section 35 of the Banks and Other Financial Institutions Act, Cap. B4 Laws of the Federation, 2004) as there was no lawful special examination ordered into the affairs of Intercontinental Bank Plc, as required by law. Since no order for special examination of the bank’s affairs was signed by Malam Sanusi, as required of him by the law of this country, his order for my removal is, improper and unlawful.

“The current CBN examination of May 2010, now says there is a N95bn loan over-provision, which means IB Plc was deliberately marked down previously. Two lorry loads of police were sent to IB Plc to remove me. It was like a bad movie, a big surprise that a person can be driven away from a business he had started and nurtured for over 21 years in one hour. And without any opportunity to contest it.

“I was surprised that the next morning (Saturday), all the papers carried personal interviews with Malam Sanusi, in which he accused all the CEOs of various misdeeds. This showed that it was pre-planned and well-rehearsed.

“On the evening of 19th August, I received a call that Malam Sanusi under the powers that the late President had delegated to him, had ordered the EFCC, the Police and the SSS to arrest me. I also learned that two lorry loads of personnel were en route. I hurriedly left the house, though I could not believe that all this had transpired in the last 72 hours.

“I then recalled a professional disagreement with Malam Sanusi while he was CEO of First Bank. Back then, I had discovered that his staff members were de-marketing IB Plc and I wrote to him concerning this. My immediate conclusion was that Dr. Saraki and Malam Sanusi wanted to take over IB Plc by fraudulent means, and that if I went into their custody, it could result in my death, in order to silence any opposition to their plans.”

Akingbola alleged that Mr. Mahmoud Lai Alabi who was appointed by the CBN as the new CEO of IB Plc was the Chairman of Shonga Farms – partly owned by Kwara State Government – and several development funds in the state.

Saraki is a former governor of Kwara State

He alleged that upon Alabi’s resumption of office, “his first task was to write off Dr. Saraki’s loans to the tune of N8.115bn (Papers & letters attached). He also wrote off loans totaling N32bn to friends of Dr. Saraki and Malam Sanusi”.

He said, “All this, in a bank that they were meant to be rescuing. All these written-off loans had been classified as “good” and “performing” by the CBN examiners, and had been secured with properties in Ikoyi (Lagos), Victoria Island (Lagos), and Abuja.

“The CBN examination report of May 2010 complained about this massive loan or “cash gift” to Dr. Saraki. Next, he recruited former Societe Generale staff as Executive Directors and loan managers (for example, Mr. Gbenga Alade). Mr. Alabi proceeded to sack the entire senior management of IB Plc and replaced them with former Societe Generale staff. It is clear, from these actions, that I was removed to smoothen the takeover of IB Plc for Dr. Saraki.

“As at the time the shareholders’ appointed management was ousted by Malam Lamido Sanusi, IB Plc was not owing the CBN one kobo on the discount window. Also, IB Plc had Inter-Bank takings of N73 Billion. However, as at today under the CBN’s appointed management, IB Plc is now owing the CBN N100 Billion and owing other Banks N300 Billion, making a total deficit of N400 Billion after the purported intervention by the CBN.”

Akingbola lamented that it was rather curious that: “All the banks are yet to receive any examination report from the CBN to show areas of deficiencies.

“The CEO and entire senior management were removed without the Board or shareholders being informed.

“Without any criminal charges or reports, the CEOs were arrested and locked up – to prevent them from speaking to the media.

“It was after locking them up that the EFCC started searching for possible offences (in my case, it took 4 months of searching for any offence to pin on me).

“Mr. Alabi, the new CEO of Intercontinental Bank Plc, is an employee of Dr. Saraki (chairman of Songa Farms in Kwara). In fact, Dr. Saraki is running IB Plc by proxy.

“Within two months of his appointment, Mr. Alabi wrote off N7bn of Dr. Saraki’s loans – the companies are Linkers, Dicetrade, Skyview Properties, and Joy Petroleum.

“As the appointment of each senior management of IB Plc was being terminated, Mr. Alabi was recruiting and replacing them with former Societe Generale staff, in order to complete the take-over. For instance, the Executive Director of risk management brought into IB Plc (Mr. Gbenga Alade) is a former Societe Generale staff member.

“Dr. Saraki has now used his political power to take over IB Plc after his failed peaceful merger attempts.

“Malam Sanusi claims to have injected N100bn, (which is less that 10% of the IB Plc’s value), and as such now owns it 100%. This is a bank with a balance sheet of N1.6 trillion; 330 branches; 2 foreign subsidiaries; 10 well-established subsidiaries; 12,000 members of staff; and paidup capital of N230 billion. Where is the justice?

“When Malam Sanusi initially injected N100bn into IB Plc, he wrote to the Board that it was a seven-year loan (copy attached). Why is he now trying desperately to sell the bank within a year of the loan?

“I am appealing to the Attorney General and Minister of Justice to institute an independent investigation into the “so-called” banking reform of Malam Sanusi and the fraudulent N32 billion loan write-off.

“I am also appealing to this government which believes in the rule of law to reverse the fraudulent take-over of Intercontinental Bank Plc and return it to its Board, management and shareholders.

“All the allegations against the banks’ CEOs should be independently investigated by the Attorney General’s office for fairness.

“Even with the deliberate damage being done to the banks and their stock prices on a daily basis, if we are given six to nine months, the banks will be restructured to the normal, favourable and fair positions.”

Then-President Goodluck Jonathan in February 2014 suspended Sanusi as CBN governor.

SaharaReporters learnt that Sanusi was suspended by the Goodluck Jonathan administration over Akingbola’s petition, allegations and following claims by the former apex bank governor that $49 billion was stolen by some persons in government.

This came amid other political intrigues at the time.

However, many Nigerians were of the opinion that Sanusi’s eventual removal was more political.

Efforts to reach Saraki – a former Senate President – or any of his aides were not successful but when SaharaReporters got in touch with Sanusi, he directed our reporter to his defence related to Akingbola’s petition.

Regarding the alleged waiver of a N40 billion loan to a Nigerian bank, Sanusi in his defence, said, “Before responding to the allegation, it should be stated that the said Mr Akingbola is a man found by a final judgment of the Courts in England to have been liable for financial improprieties in the management of the affairs of ICB.

“In his self-serving petition, Mr Akingbola alleged that the CBN, on my watch, wrote off a loan in favour of Dr. Bukola Saraki. This is untrue.

“The CBN was at no time involved in the decision of ICB (or any other bank for that matter) to write off its loans. The CBN never gave prior approval to the Management and Board of ICB to write off any particular loan. 

“It is important to state upfront that all the non-executive directors on the Board of ICB were appointed by its shareholders while Akingbola was CEO and they were the majority on the Board that approved the write-offs.

“From the submissions of ICB to the CBN, the said loan write-off, involved over 1000 customers’ accounts, totalling N49.07 billion – including accounts held by companies related to Dr. Bukola Saraki.

According to Sanusi, the decisions on loan write-offs in the process of recovering non-performing loans are “taken by the management and board of banks in line with their internal credit policies”.

He said, “The outstanding amounts are then written off the books of banks after receiving approval of the CBN. ICB therefore only approached the CBN, after it has completed all its negotiations and agreements with its customers, to seek CBN ‘No Objection’ approval to write off the loans.

“Indeed, after a careful review of the submission by ICB, the CBN initially raised objections to the justifications provided for the write-off of the debts on the accounts related to Dr. Bukola Saraki.

“In response to these objections, the Management of ICB wrote explaining the rationale for the Board decision. It is important to note that decisions on loan write-offs involve significant exercise of judgement by those involved.

“Usually a number of factors come into play including whether or not the loan is secured, the value of collateral and if the bank is in a legal position to realise same, the general liquidity in the secondary market and the liquidity position of the bank itself which determines if it is negotiating from a position of strength or weakness.

“Ultimately, while we may debate these issues, the judgement has to be exercised by those actually managing the bank in the best interest of shareholders and the responsibility lies with them.”

Sanusi described ICB as being in a “grave situation as a result of years of mismanagement by Akingbola”.

He continued, “The loans in question were largely loans secured by shares in the capital market and therefore were vulnerable to what is called Market risk.

“The collapse of the Nigerian capital market following the Global Financial Crisis in 2008 meant that the collateral for these loans had been totally wiped out. The losses suffered by the bank were therefore a result of very bad credit decisions taken by Mr. Akingbolahimself which led to the bank taking on huge amounts of risk that crystallised. In this situation all that was left for Management was to minimise its losses and recover as much as it could before the situation got worse.

“With specific reference to the ICB loans to companies related to Dr Saraki, the bank’s Management explained that there were four loans totalling N9.489 billion, of which three were margin loans secured by shares and the fourth was secured by real estate.

“The value of the collateral underlying the Margin loans had been eroded and the bank was compelled to give waivers to make some recovery while still retaining the shares for sale at a future date.  It should also be added that the real estate used to secure the non-margin loan were not perfected by the management under Mr. Akingbola – which is another indication of bad credit policies under Mr. Akingbola.

“There was no waiver granted to Dr Saraki on the fourth loan as it was paid in full (plus accumulated interest). Of the N9.4 billion, a total of N4.04 billion was repaid, representing a waiver of 57.42 %. Losses on Margin loans were common at this time in the entire industry.

“To illustrate this, when AMCON purchased margin loans from Intervened banks on December 30, 2010, it offered a premium of 60% above the average price of the shares in the preceding 60 days. In spite of these generous terms AMCON paid an average of only 24.27% of the value of margin loans purchased.

“Without the premium AMCON would have purchased the loans at 15.17% of their book value. This actually would suggest that the Management of ICB did get a reasonably fair deal for the bank in these circumstances. The best construction we can place on Mr Akingbola’s petition is that he is complaining that the Management that succeeded him could have done a better job of cleaning up the mess he created and left behind.”

Regarding Akingbola’s allegation of fraud, conspiracy, forgery and stealing against Saraki in connection with Joy Petroleum Ltd, Sanusi said the Central Bank was in the process of collaborating with law enforcement agents involved in the investigations when “we received a copy of a letter written by the Honourable Attorney-General and Minister of Justice declaring that these allegations were unfounded and there was no basis in law for any criminal investigation in respect thereof”.

He said, “The Central Bank therefore cannot be held in any manner responsible for this decision as this was a position taken by the nation’s chief law officer.”

In conclusion, Sanusi said, “It is now clear that each of the allegations made by the FRCN in the Briefing Note could easily have been resolved upon a simple request to the CBN for clarification or a little more careful review.

“There is no doubt that if the CBN had received the Briefing Note, which was prepared in June 2013, all the misconceptions, misrepresentations and erroneous inferences contained therein would have been cleared, and the misleading of His Excellency would have been avoided.

“It is now my sincere hope that, having painstakingly provided detailed explanations, backed by verifiable documents, His Excellency, Mr President will find the response satisfactory, and in line with his adherence to fairness and justice, revisit and redress the issue of my suspension.”

However, EFCC sources told SaharaReporters that Akingbola would have been convicted but some power play ensured that did not happen.

“Akingbola was about to be convicted when the trial judge was suddenly promoted to the Court of Appeal to avoid his conviction,” one of the sources said.

Findings by SaharaReporters also revealed that Mr Lateef Fagbemi (SAN), the Attorney General of the Federation and Minister of Justice was Akingbola’s defence lawyer at the time.

“This explains why this matter is raring its head now and why the petition he wrote back then is now back in the public domain.

“This is why he is likely to escape justice unlike the MD of the defunct Bank PHB, Mr. Francis Atuche, who was accused of stealing N25.7bn; the MD of the defunct Finbank Plc, Mr. Okey Nwosu, alleged to have stolen N18bn and the MD of defunct Oceanic Bank. This is also why the EFCC may mess up Akingbola’s case,” one of the sources said.

In August 2012, Reuters that Access Bank had won an order for repayment of more than $1 billion in a fraud case in London’s High Court against Akingbola.

Judge Burton ruled that Akingbola and his counterparts owed Access Bank N145 billion ($902.58 million) due to illegal dealing in Intercontinental Bank shares and N16 billion in payments made by the bank to Tropics Group, companies in which Akingbola had an interest.

The court held Mr Akingbola responsible for directing the bank to buy its own shares at a loss of about N145 billion, siphoning money to companies controlled by him or his family and using the bank’s funds to buy real estate in the U.K.

It held that Akingbola wrongfully caused the bank to acquire 3.7 billion of its own shares between 2007 and 2009, and directed about 68 million pounds to a group of companies in which he had an interest to help them pay off “substantial debts”.

Akingbola denied any wrongdoing.