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Sanusi: One-Man Demolition Squad...The Unfolding Agenda...
By Franklin Otorofani, Esq. (mudiagaone@yahoo.com)
 Published
September 2nd, 2009
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Note: Below is my commentary on Dele Momodu's article
titled “The Hunter and His Antelope”, published in the
online August 29th, edition of This Day newspaper in
which he lamented the negative reactions of his readers
to his previous article questioning the actions of the
CBN governor in the summary dismissal of the five bank
CEOs, and the seemingly sadistic disposition of some
Nigerians to the plight of the bank CEOs. Dele Momodu,
as many know, is the publisher of the "Ovation" magazine
based in London and his piece provided a veritable
launchpad for me to address the actions of the CBN
governor in a more comprehensive fashion. However, as at
the time of sending this in, it has yet to be published
by the columnist and I have the honor of sharing it with
the distinguished readership of this blogsite, albeit a
little retouched. Read on...
"Dele, I must confess that I did not read your
referenced article that caused the “hoopla” among your
readers, but I could surmise from the tone of this one,
that it was somewhat critical of Sanusi's deployment of
the sledgehammer against the five bank CEOs. And if I'm
right, then you've got company, and I might add, plenty
of it too! To put it bluntly, let it be known that there
are many discerning Nigerians out there like you,
including yours truly, who are not in the least taken in
by Sanusi's barely concealed diabolical designs on the
five banks now targeted for illegal acquisition or even
outright liquidation. And Sanusi was not even ashamed to
call his illegal bank takeover “reform.” What reform?
Anyone who calls the firing of bank CEOs and debt
collection by EFCC “banking reform” is, ipso facto, a
fraud, by definition. Pray, what is reformative about
firing bank CEOs and collecting debts from bank
borrowers, unsolicited?
Sanusi's gratuitous actions are not only imprudent and
patently illegal, but ultimately destructive of the
fledgling Nigerian economy in general and the financial
sector in particular. The corrosive effects of his
actions are already beginning to manifest in the panic
that has gripped the financial sector leading to panic
withdrawals of funds by depositors, and the willful
degradation of the status of the otherwise robust
Nigerian banking sector in the international financial
arena. The house that Solubo built is being savagely
pulled down by his successor seemingly drafted in to do
a demolition job of sorts, and without a doubt in
furtherance of a hidden agenda. Sanusi's questionable
intervention in the targeted banks can be readily
faulted at several levels:
Banks all over the world are in the business of giving
credits to individuals and businesses alike. And it's
these credits that translate into real economic
activities ultimately leading to economic growth and
development in any economy. Credit is the lifeblood of
any modern economy and only a dead economy can do
without credit. Concomittantly, the freer the credit
flow in an economy the more robust and flexible the
economy becomes. Therefore financial regulations must
not be fashioned in such a way as to stiffle free flow
of credit. It's therefore ludicrous and
counterproductive to criminalize bank lending and
borrowing under the guise of reform. As already noted
above, no modern economy grows without credits. As such
banks are duty bound to extend credits to deserving
individuals, businesses, and organizations, using their
own risk management parameters. But the fact of the
matter is bank credits are inherently risky by nature,
the higher the risks the higher the returns. Naturally
then bank credits would tend to gravitate toward profit
centers, albeit with higher risks. And that means
necessarily that these loans would not always perform.
Some do some don't regardless of due diligence or risk
analysis made prior to the credits. That is simply the
nature of the territory, which Sanusi himself cannot
feign ignorance as a former bank CEO. Again, loan
defaults is a permanent feature of the financial
industry. And I repeat, it goes with the territory and
cannot therefore be decreed out of existence nor
penalized by the dictatorial whim of any central bank
governor.
As we have seen in the case of United States banks, the
housing boom in the US was fueled by highly profitable
the sub-prime mortgages, which were instruments devised
by the banks that converted traditional mortgages into
securities, just like shares, which were then packaged
and sold to willing investors all over the world, and
resold in similar packages to other layers of investors.
Banks and international investors outside of the US got
in the act to make quick money. As long as the
mortgagees serviced their housing loans, it was all fine
and dandy, and everyone on Wall Streets, including, fund
managers, et all, smiled their way to the banks. Like a
sophisticated pyramid scheme, as the US housing markets
soared so were the profits of the investors in the
sub-prime markets. But sophisticated as it was, it would
only take a few borrowers' default to puncture the
balloon. And sure enough it did not take long for
borrowers to start defaulting on their loan repayments
and with that the US house of cards came crashing! And
it's still crashing today even as I send in this piece.
Since the financial melt-down began close to two years
ago, hundreds of banks have gone under in the United
states alone. The question is: what was the US
government's reaction to the crisis.
What did the United States government to do? Did
President George Walker Bush and Chairman of the Federal
Reserve Bank, Prof. Ben Bernanke, fire the CEOs of the
failing banks? Or, for that matter, was the FBI invited
to arrest, detain, and prosecute the CEOs of Fani Mae,
Freddie Mac, Leyman Brothers, AIG, Washington Mutual,
and all the CEOs of the failed financial institutions
who indulged their institutions in unbridled risk taking
with their so-called sub-prime mortgage financial
engineering? No! Not a chance in hell! Not a single
person was even invited by the FBI let alone detained.
The same was the case in Europe. The authorities in the
United States and Europe were too responsible, matured,
calculated, and cool-headed to take such rash,
unproductive decisions that would do more harm than good
to a battered economy and a humbled financial sector.
Rather, President Bush, an avowed capitalist and
Bernanke, went to Congress cap in hand to ask for and
got $787 billion to bail out the banks and that sum came
in the name of Troubled Assets Recovery Program (TARP),
duly authorized by the United States Congress. That is
DUE PROCESS in action. That is how mature leaders react
to crisis in a democratic dispensation; not the Sanusi's
one-man demolition squad in the name of reform.
President Barrack Obama has followed in the same
footsteps not only by retaining Bernanke for the sake of
continuity and stability, but has equally indicated his
re-appointment for a second term, unlike Yar'Adua who
couldn't wait to see the back of Professor Charles
Solubo to bring in Sanusi for the execution of the evil
agenda now unfolding before our own eyes.
Did I say 'evil agenda'? That's right! Sanusi's
gratuitous actions betray a hidden agenda that will
unfold in the days to come no matter the official spin
and gloss put on it to hoodwink unsuspecting Nigerians.
It's not the beginning but the end of this saga that
will reveal his true agenda. Yet the signs are already
there for the discerning and they point unmistakeably to
a predetermined plan for the acquisition of the targeted
banks. They are there in his undue haste and gratuitous
bailouts. They are there in his arrest and detention of
the bank CEOs in cohort with EFCC without as much as
giving them a hearing. They're revealed in the
uncharacteristic gusto and missionary zeal suddenly
being exhibited by the hitherto comatoseYar'Adua
administration. Yes they're there in the frantic and
frenetic bid to demonize the bank chiefs before the
public. Oh, the signs of a hidden agenda are written
over the faces of Sanusi and Madam EFCC! And I would not
be surprised if it turns out that potential buyers have
already been pre-positioned to take over the banks after
the sack of their CEOs and government back-door
takeover. And that would explain the rush for the
illegal firing and detention of the bank CEOs even
before the audit exercise being carried out by the CBN
itself was completed. Or what is the London Road Show
supposed to mean, if not designed to meet with
pre-positioned investors? What do you need a roadshow in
London for? How many road shows were organized by other
countries' bank chiefs who took steps to reposition
their banks in the face of the global financial crisis?
Why does everything done neatly and professionally in
other countries always end up messed up in Nigeria? And
by the way, how many road shows is Sanusi planning? Is
there one for New York, Paris, Montreal, or
Johannesburg? If not, why not? Why must it start and end
in London? I would hazard a guess. It's because the
London connection is part of the hidden agenda. In fact,
I would go so far as to posit that the sole purpose for
the CBN's so-called bank audit exercise was to produce a
report that would indict the management of the targeted
banks in order to provide a basis for their illegal
takeover. And once Sanusi got the predictable audit
report of the targeted banks, he struck like a bolt from
the blue, not waiting for the audit report of the
remaining banks including the one he once headed to be
turned in! Quite an interesting scenario. Isn't it? The
man was simply working to an answer! How else would
anyone interpret the lightening speed with which Sanusi
acted without even confronting the bank CEOs with the
audit reports of the banks before he struck, and quickly
following that up with their detention with Madam EFCC
on hand as the undertaker-in-chief with a campaign of
calumny and disinformation against the CEOs?
The more fundamental level of Sanuis infractions,
however, could be found in the illegal disclosures of
the bank/customer relationships, which are protected by
law in all civilized jurisdictions save in criminal
proceedings. This strikes at the core of banking
relationships. Remember, this publication of names of
alleged bank loan defaulters was made even before EFCC
came into the picture and not in the course of any
criminal proceedings. By proceeding to publish the names
of bank debtors whose only crime was to obtain
legitimate loans from their banking institutions for
legitimate businesses, even including in some cases, the
execution of governmental projects now put in jeopardy,
Sanusi has breached the civil laws of the land and
destroyed bank/customer relationship needlessly. This is
utterly insane. When a regulatory agency like the CBN
throws both law and caution to the wind in its actions,
then there is cause for grave concerns as to the
direction the country is moving. Lawlessness is never a
substitute for due process. The bank CEOs are answerable
ultimately, not to the government, but to their
respective shareholders, and therefore, the government
cannot dictate to the banks how they should be run and
who to grant or deny loans as the case may be. It can
set broad rules but not micro-manage their day to day
affairs. That is not the role of the CBN, or the
government for that matter. Nigeria is not a command
economy but a free economy, that is government by market
forces. The principles of free market impose on
regulatory authorities respect for due process, cautious
and responsible interventions in the affairs of private
commercial enterprises. If the banks have liquidity
problems the CBN could ask them to raise their capital
base or help them do so just like Solubo did long before
the US and other countries were compelled by their own
crisis to follow suit without unnecessary kill-and
go-bravado as though Nigeria were a banana republic.
Only a dysfunctional nation could have produced a
dictatorial and summary character like Sanusi. And only
a people weaned in military dictatorship could have so
joyously hailed his summary and dictatorial actions
including the misappropriation of public funds.
Is this an endorsement of possible credit and other
financial abuses on the part of the bank CEOs as
alleged? Far from it! Nothing prevented Sanusi from
confronting them with such abuses and have them defend
their actions. But to proceed summarily to dismiss them
on the basis of some secretive audit report not shown to
them amounts to a violent abuse of power. What is more,
alleged abuses by bank CEOs is no excuse for Sanusi to
indulge in his own flagrant abuses of the law and due
process. Therefore, the CBN Governor owes the country
the following explanations: Why did he choose to blow
this into the open when the CBN bank audit was yet to be
concluded? He was the CEO of First Bank. He should tell
the world the status of the bank he headed or is he
implying that he was above board in the management of
First Bank? He should explain to us why he didn't
confront the targeted bank CEOs with the audit report
and nudge them to recover their non-performing loans
through the extant legal processes without these
unnecessary destructive theatrics? Under the laws of the
land the banks can and should on their own recover their
loans and they do not need an overbearing CBN with Madam
EFCC in tow to do so in a civilized society where due
process and rule of law is the norm. The banks were not
even allowed to reconcile their accounts with their
debtors in order to truly ascertain their debt profiles.
for crying out loud! This situation has led to
unsubstantiated claims by the CBN as was the case with
Alhaji Dangote, for instance. And since when has the
government become debt collector?
Isn't it laughable that a government that cannot meet
its financial obligations to its workers and owes
contractors billions of dollars is giving bank debtors a
seven-day ultimatum to pay up or go to jail? And isn't
it curious also that Madam EFCC who was thoroughly
embarrassed by US Secretary of State, Mrs. Hilary
Clinton's damning verdict on EFCC, has suddenly jumped
into this with an unprecedented gusto and alacrity never
before exhibited by this moribund administration and has
suddenly turned EFCC into a Debt Collection Agency while
readily abandoning the anti-graft war which is her
primary and only responsibility? She is now chasing bank
loans! The smell of money has proven irresistible to
her. Debt collection is a whole lot more profitable than
chasing corrupt government officials. Only heavens know
what will happen to the billions of naira Nigeria's
newest government's Debt Collection Agency has muscled
from the hands of bank debtors through intimidation and
threats of imprisonment. This is nothing short of jungle
justice. Rule of law and Due Process have callously been
replaced with official banditry. Is the country now
being run by Area Boys and Girls who have no respect for
rule of law even as they shout it from the rooftops?
This is the rule of the jungle that must not be allowed
to take root in a democracy.
Finally, Sanusi must explain to us who authorized him to
put our public funds into private banks without the
imprimatur of the National Assembly? Whose money is
Sanusi gratuitously doling out just like that with
reckless abandon like a drunken sailor without recourse
to the National Assembly? Nigerians are asking: whose
money, Sanusi's or ours? And they want answers, not
later but now. And the answers should be forthcoming
with the same lightening speed as the illegal firing of
the bank CEOs. Yes, someone has some explaining to do to
the Nigerian people through their representatives in the
National Assembly, if the press would not do their part
to get the answers from Sanusi, after all the crude
bravado. This is a test case for our lawmakers whose
exclusive jurisdiction to appropriate public funds has
been so flagrantly infringed upon by the governor of
Central Bank unchallenged. Four hundred billion naira is
no small potato. It's our collective wealth, and no
single individual has the right to give it a way as
charitable donation to banks that might soon be equally
given away as charitable donations to handpicked
individual investors who, in all probability, are
already lined up with our money eventually ending up in
private pockets in the official round tripping.
I challenge the Nigerian press to go beyond armchair
reporting of the “official” releases by the authorities
and dig deep down into the matter to expose the sinister
motives behind Sanusi actions. It's called investigative
journalism, not armchair reporting! I challenge our
lawmakers to rise up to the ocassion and speedily halt
the illegal and unconstitutional encroachment of their
legislative territory by the CBN governor.
My country will not be reduced to a banana republic
under my watch. I rest my case for now while I watch the
unfolding events like an eagle from the sidelines.
God bless Nigeria!
Franklin Otorofani, Esq.
mudiagaone@yahoo.com
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