By Peter OBIORA investadvocate

Nov 04 2010 10.20 GMT

Lagos (INVESTADVOCATE)-Boniface Okezie, National Chairman, Progressive Shareholders Association of Nigeria (PSAN) has affirmed that there is no transparency in the ongoing process of recapitalisation of the rescued Banks by the Central Bank of Nigeria (CBN).

Okezie recently made this affirmation to investadvocate in Lagos Nigeria.

 

“To be sincere, our position has not changed following the fraudulent practices going on in the recapitilisation exercise of these rescued Banks by the CBN” he said.

 

Okezie said shareholders and their leaders have not seen any transparency in the process so far; accusing the Apex Bank of trying to use their cronies to takeover the Banks.

 

“We have not seen any transparency on the part of the CBN appointed advisers; most of them are working to ensure that their cronies and friends takeover these banks at a give away prices. This would rob shareholders of their investments in the Banks” he said.

 

The Shareholder Leader further affirmed that currently, most of the rescued Banks are returning to profitability if the results they are publishing are anything to go by; then they are capable of standing on their own.

 

He further reacted to rumours that one of the rescued Banks (name withheld) is being priced for N6 billion; which according to him is not worth it considering the amount the CBN injected into the Banks.

 

“These Banks are returning to profitability and some Banks are being priced for N6 billion and CBN claimed to have injected over N600 billion into these banks; what does this portend?” he asked.

 

Okezie queried if the N6 billion would offset the said amount injected into any of the Banks by Nigeria’ Central Bank.

 

“Is the N6 billion going to offset the amount that the CBN injected into these banks. If a Bank has a hole of N250 billion, will the N6 billion block that hole? We cannot understand the whole process; there is confusion allover; indicating there is not going to be any genuineness arising from the CBN’s exercise on these Banks” he said.

 

“If a Regulator turns operator, confusion has set in, so we don’t have trust or faith in them anymore, they say they are working in tandem with the Board of these Banks” Okezie affirmed.

 

He noted that what the CBN has actually done was to relegate shareholders to the background in the whole process. “The so called management appointed by the CBN are doing everything possible to represent certain interest and by the time these interest takeover the Banks, they would be compensated with appointments to Executive Management positions of these Banks” he said.

 

According to the Shareholder Leader, CBN gave seven years loan to these Banks, and should allow them stabilise by working with these funds; thereafter seeking the kind of investors they would prefer coming into the Banks; rather than CBN forcing investors on them.

 

“They should allow the Board of the banks to appoint their own management to run the Banks; which means CBN’s funds would be saved. CBN as a Regulator will wake up from its slumber to begin to assert its authority in regulating the industry; not acting as operators; CBN has abandoned their primary role as Regulators; which is the reason things are not in order in the industry” Okezie said.

 

He again affirmed that the CBN collects 11 percent (11%) interest on these loans on an annual basis.

 

“Why are they not allowing these banks to stabilise and work with the funds; based on when they would look for their kind of investors. The CBN collects 11% of the interest on these loans annually; they should allow the banks operate with the loans for seven years and the banks will offset the loans” he said.

 

Though he made it clear that shareholders are not rejecting any core or institutional investors who want to acquire stakes in these banks and turn them around to add value to its investors and customers.

 

“We are not totally rejecting any core or institutional investors as the case maybe; but they should allow the Board to appoint their own Advisers that would do the job of seeking investors. Also, they should allow foreign investors come in and have a stake in these Banks, which will entrench good corporate governance in the system. What we are witnessing today is false” Okezie said.

 

While reacting to reports early this week that African Capital Alliance, a Lagos based Private Equity firm, is seeking to acquire a stake in Union Bank Nigeria Plc (UBN), Okezie challenged the CBN to make the firm publish at least five years of its Audited results and make same available to the public.

 

“On the case of Capital Alliance, if the CBN are sincere, let this firm publish its five years audited account and make same public. They should also tell us what business transaction relating to the Banking industry they have been involved in the past years and who are on their Board” he said.

 

According to him, people are manipulating this process and would eventually acquire the Banks at give away prices.” They are fronting, and at the end these banks will be acquired at give away prices; people will reap where they didn’t sow, and it is totally unacceptable to Nigerian Shareholders” he affirmed.