Officials Arrested At 3 Nigerian Banks In Financial Crimes Investigation

By Dana Sanchez

aby7AHIHThree top Nigerian banking executives were arrested in their offices as part of a financial crimes investigation into alleged illegal transactions, officials and bankers said on Tuesday, according to TheAfricaReport.

The move shows an escalation of President Muhammadu Buhari’s crackdown on corruption since his election a year ago. He promised to fix the country’s economy and put an end to corruption. Most Nigerians live in poverty despite Nigeria’s energy wealth.

The three banking officials include Nnamdi Okonkwo, managing director of Nigeria’s Fidelity Bank. He was questioned and released Friday. Yemi Adeola, CEO of Sterling Bank, and other members of its senior management team were questioned.

A third bank, Access Bank, said agents visited on Friday to investigate a transaction involving a customer of the bank and questioned group managing director Herbert Wigwe in the offices of the Economic and Financial Crimes Commission. “He was released without charge on the same day,” the bank said in a statement.

Financial stakeholders expressed concern over the arrests.

“It’s a shock to confidence in the banking sector. They should have handled this investigation more discreetly rather than arresting CEOs in their offices,” said Bismark Rewane, CEO of Lagos-based consultancy Financial Derivatives, according to TheAfricaReport. “I fear for the ramifications.”

Banking sources say the Economic and Financial Crimes Commission has been investigating several banks for alleged illegal transactions in the run-up to the March 2016 election to support then-President Goodluck Jonathan, who lost to Buhari.

Corruption was legendary under Jonathan. His supporters reject Buhari’s claims that his government stole public funds. Instead they say Buhari is conducting a witch hunt, according to TheAfricaReport.

Sambo Dasuki, Nigeria’s former national security adviser, was tried in January on fraud charges in the country’s first high-profile corruption trial since Buhari took over.

Dasuki was charged with allegedly stealing $2 billion and awarding fake contracts to buy 12 helicopters, four fighter jets, and ammunition meant for the Nigeria’s military campaign against Boko Haram Islamist militants, BBC reported.

The central bank said it is part of the investigation to determine who may be involved in financial crimes, and the extent of involvement.

Several Nigerian banks have recently reported decreased profits and increased bad loans due to the ailing oil industry. Some Nigerian banks are restructuring their business models. They’ve also been hit by Buhari’s decision to freeze the naira rate, which made investors reluctant to pour money into Nigeria.

Nigerian banks that lent heavily to local energy companies when oil prices were high have seen their profits fall by as much as 80 percent since the crude price crash, FinancialTimes reported.

Analysts worry about the size and scope of the financial crimes investigation. They worry a long investigation could scare away much-needed investors and create uncertainty in a financial system already under pressure, FinancialTimes reported.

“How wide and deep is this going to go?” said Lanre Buluro, head of research for Primera Africa, a brokerage group in Lagos, in a FT interview.

“It really does open up another front” of challenges in the banking sector, said Ronak Gadhia, equity analyst at Exotix in London.

Fidelity Bank

A domestic lender, Fidelity Bank’s Okonkwo was questioned and released Friday.

Fidelity said it had appointed an acting CEO and is cooperating in the investigation, saying all its transactions were reported to regulators.

Sterling Bank

Sterling Bank, another domestic lender, said on its website that it did not hold an account of “the public officer from the previous administration” linked to the investigation.

Access Bank

Access Bank said agents visited Friday to investigate a transaction involving a bank customer.

All three banks said they were questioned concerning transactions carried out with “a client,” FinancialTimes reported. None identified the client.

About Cholo Brooks 14609 Articles
Joel Cholo Brooks is a Liberian journalist who previously worked for several international news outlets including the BBC African Service. He is the CEO of the Global News Network which publishes two local weeklies, The Star and The GNN-Liberia Newspapers. He is a member of the Press Union Of Liberia (PUL) since 1986, and several other international organizations of journalists, and is currently contributing to the South Africa Broadcasting Corporation as Liberia Correspondent.