By Okechukwu Nnodim

There are indications that the Federal Government is considering the complaints of shareholders of the three nationalised banks, whose licences were revoked by the Central Bank of Nigeria on Friday.

The Securities and Exchange Commission said on Tuesday that though the equities of the three banks involved had been placed on full suspension, it was looking into ways of resolving the agitations of the shareholders.

The CBN had on Friday revoked the licences of Afribank Plc, Bank PHB Plc and Spring Bank Plc, and transferred their assets and liabilities to the newly created “bridge banks,” Mainstreet Bank Limited, Keystone Bank Limited and Enterprise Bank Limited, respectively.

Shareholders of the three banks have, however, condemned the manner in which the licences were revoked and called on the government to rein in the apex bank.

The Director-General, SEC, Ms. Arunmah Oteh, said in an interview with journalists at the 2011 Annual Audit Committee Conference in Lagos on Tuesday, that investors’ shareholding in the nationalised banks was already negative before they were taken over, noting that the commission might come up with an acceptable resolution of the controversy next week.

She said that the commission was looking at a lot of concerns and would react to them as soon as possible.

“We are looking into the issues and we are trying to see the profiles of the investors to see if there is anything that can be done. Maybe in about a week from now, we will know, but right now, those shares have been suspended. In fact, the shares are on full suspension, meaning there cannot be any trading on them,” Oteh said.

The SEC boss, however, reiterated that the shares of the banks were already suspended and could not be traded upon.

She said the value of investors’ shareholding in the three banks had become negative following their sale to the Asset Management Corporation of Nigeria by the Nigeria Deposit Insurance Corporation. Asked about the fate of the affected banks’ shareholders, Oteh said, “We don’t know yet. But in reality and technically, what happened is that they still have shares in the three banks, but these shares were fully suspended, and ultimately, what will happen is that the banks will be de-listed for not meeting the requirements.

“And the fact is that the banks no longer have their banking licences. So, in effect, their shares are right now not trading.”

On whether the “bridge banks” would give returns to big investors of the nationalised banks, Oteh said that the monetary standing of the three banks before their licences were withdrawn was flawed.

The SEC boss said, “If you’ve been following the financials of the three banks, you will know that before their licences were withdrawn; they were having negative shareholders’ funds. So, when you say lost out, we ask ourselves from where?

“This was because they already had negative shareholders’ funds before they were sold to AMCON.”

Oteh also argued that the nationalisation of the banks would enhance the performance of the sub-sector and would impact positively on the Nigerian economy.

“The resolution of all the rescued banks, with some of them signing Transaction Implementation Agreements, and the establishment of bridge banks by the NDIC, instead of liquidating them and transferring their assets to AMCON, has helped the sentiment, and has made it relatively positive even in the global negative sentiments.”

Since the revocation of the licences of the three banks, shareholders under various groupings have been threatening to sue the financial regulatory agencies for not waiting for the expiration of the September 30 deadline given to them to recapitalise.

They had alleged that the revocation of the licences was a calculated attempt by the apex bank to sell the banks to its preferred investors.

The General-Secretary, Independent Shareholders Association of Nigeria, Mr. Adebayo Adeleke, said in an interview with our correspondent, “The move by the Central Bank is completely contrary to what is expected of a law abiding institution. Why would you jump to conclusion and revoke licences when you have not gotten permission from the court that is handling the case.

“It is common knowledge that when a case is pending in court, all parties involved in the case are expected to maintain the status quo; but in this case, what the CBN did was wrong and should not be left unchallenged.”

Source: Punch