Nigeria will file criminal charges including money laundering on Monday against the former heads of five banks rescued in a $2.6 billion bailout, the anti-corruption agency said.
The central bank injected 400 billion naira ($2.6 billion) into Afribank <AFRB.LG>, Finbank <FIBP.LG>, Intercontinental Bank <INBK.LG>, Oceanic Bank <OCBK.LG> and Union Bank <UBNP.LG> just over two weeks ago and sacked their senior management.
The banks had built up non-performing loans worth 1.14 trillion naira, leaving some of them close to collapse and at risk of triggering a systemic banking crisis in sub-Saharan Africa's second biggest economy.
The Economic and Financial Crimes Commission (EFCC), Nigeria's anti-corruption police, has said some loans were granted without collateral or board approval and in some cases to individuals or companies using fictitious names.
"The charges will be filed against them today. They are criminal charges, especially money laundering," EFCC spokesman Femi Babafemi said, declining to give further details.
Erastus Akingbola, former chief executive of Intercontinental Bank, is the only one of the five bank chiefs not to have been detained for questioning by the EFCC. He has been declared wanted by the agency.
EFCC agents have also been hunting debtors, including some of Nigeria's most powerful tycoons, whom the regulator said owed the five banks 747 billion naira.
Babafemi said the agency had recovered 45.5 billion naira of that amount by the end of last week.
FIREFIGHTING
Central Bank Governor Lamido Sanusi, who took office just over two months ago, has pledged that all of those responsible for criminal offences will be prosecuted and that depositors at the banks will not lose their money.
"The message has been sent that the government has acted to promote savers. In the past savers and creditors lost money while managers and debtors walked away," he said at a conference of international bankers in London on Friday.
"Now what we are saying is we will go after every single one of them," he said.
The five rescued banks are being run as going concerns until new investors can be found to recapitalise them. The priority for their new management teams, installed by the central bank, is to recover the loans and improve risk management.
"So far we have been fire fighting … to a large extent successfully," Oceanic Bank's new head John Aboh said in London.
"There has been no run on the bank. In the week after (the bailout) the increase in nominal withdrawals was less than five percent. As of yesterday we are seeing net positive inflows in clearing," he said on Friday.
EFCC chairman Farida Waziri said last week 16 executives from the banks were in custody and 68 debtors being questioned.
Analysts say criminal charges could be brought if bank executives are found to have falsified accounts or breached share price manipulation rules by setting up subsidiaries as vehicles to trade their own stock and push up the share price.
The EFCC has said some defaulters could be prosecuted as conspirators with the banking executives.
