The Special Anti-fraud Unit, SFU of the Nigerian police last Wednesday in Lagos arrested former Managing Director of Intercontinental Bank, Mahmoud Alabi, for fraud related to a questionable loan write-off.
According to an on-line report, Alabi’s arrest followed a petition submitted to the unit by the brother of a whistleblower who was allegedly killed for revealing shady dealings involving former Kwara State Governor Bukola Saraki.
Governor of the Central Bank of Nigeria, Mr. Sanusi Lamido, had earlier appointed Alabi to run Intercontinental Bank at the beginning of the CBN’s banking reform in 2009. The reform began with the CBN sacking several commercial bank chief executives deemed to have been linked to corruption.
However, the appointment of Alabi raised serious concerns at that time, as he had served as the MD of Songa Farms owned by the Saraki family.
In a 2010 petition, the former MD of the bank, Erastus Akingbola, had written a nine-page petition to President Goodluck Jonathan stating that Alabi had improperly written off N8bn in loans to companies with links to Saraki. He gave the companies’ names as Linkers, Dicetrade, Skyview Properties and Joy Petroleum.
Police sources revealed that Alabi wrote off billions of naira in unserviced loans linked to Saraki. In addition, Alabi decided to release four houses in Lagos and another two in Abuja that the Sarakis had used as collateral to secure the huge loans.
In a telephone interview with the on-line publication, Saraki insisted that the whistleblower was not killed but died of natural causes
The Commissioner of Police in SFU, Mr. Tunde Ogunsakin, confirmed the arrest, adding that Alabi was being interrogated.
“He is with us,” he said.
Recall that in September last year, the erstwhile Managing Director of Intercontinental Bank, Erastus Akingbola, had petitioned the federal government alleging a forceful take-over of the bank by the CBN governor, Sanusi Lamido Sanusi, claiming that the alleged take-over was at the instance of Dr. Bukola Saraki, former governor of Kwara State and now a senator.
In the 30 paragraph-petition titled “Fraudulent takeover of Intercontinental Bank PlC by Dr. Bukola Saraki and Mallam Sanusi Lamido Sanusi and Mohamoud Lai Alabi,” by Dr. Akingbola to the attorney general in which he called for an independent investigation of the allegation against him, he said, “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 N 30 billion negative capital – so the board of IB Plc turned it down. Dr. Saraki was very unhappy.
“When time came for the renewal of Gov. Soludo’s appointment as CBN Governor, Dr. Saraki blocked it through late President Yar’Adua and brought in 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 re-classify 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 in me 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 has purposely formed a team in CBN reporting to him directly. Each completed examination report was turned down, and as if this was not damning enough, they were ordered to go back until they achieved certain ratios.
According to him “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 championed 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 N 6 billion 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.
In the petition he stated “I immediately booked an appointment to see Lamido Sanusi in the CBN and questioned him regarding the N 6 billion Senate bribery allegation.
He said he had put that behind him, as “not all king makers 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 and 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.
“Rather than the new CBN Governor to perform the role of ‘lender of last resort’, he used the crisis to take over banks for his mentor. 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 police men.
Continuing he said “The letter 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.
According to Dr. Akingbola in the petition, “The current CBN examination of May 2010, now says there is a N 95 billion loan over-provision, which means IB Plc was deliberately marked down previously. Two lorry loads of policemen 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.
Akingbola said in his petition “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 police 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. Mr. Mahmoud Lai Alabi was appointed by the CBN as the new CEO of IB Plc. Mr. Alabi was then an employee of Dr. Saraki as chairman of Songa Farms and several development funds in the state. On resuming, his first task was to write off Dr. Saraki’s loans to the tune of N8.115bn.
He also wrote off loans totaling N32bn to friends of Dr. Saraki and Malam Sanusi. All these, 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, rom these actions, that I was removed to smoothen the take-over 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.
“It is 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 four 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 N 7 billionn 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. He said “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 N 1.6 trillion; 330 branches; two foreign subsidiaries; 10 well-established subsidiaries; 12,000 members of staff; and paid-up capital of N 230 billion. Where is the justice? When Malam Sanusi initially injected N 100 billion into IB Plc, he wrote to the Board that it was a seven-year loan. Why is he now trying desperately to sell the bank within a year of the loan?