Insider Abuse, Poor Gov To Blame For Skye Bank Failure- NDIC

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Post Views: 390 •Begins Probe Of Board, Management The Nigeria Deposit Insurance Corporation (NDIC), on Monday in Abuja gave further reasons for the s...

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•Begins Probe Of Board, Management

The Nigeria Deposit Insurance Corporation (NDIC), on Monday in Abuja gave further reasons for the sudden taken over of Skye Bank Plc (in liquidation), weeks after the tenure of its Central Bank of Nigeria (CBN) appointed board and interim management was renewed for another two years.
Speaking at the opening ceremony of its 2018 Sensitization seminar for Federal High Court Judges in Abuja, NDIC’s Managing Director and Chief Executive, Umaru Ibrahim, the takeover followed its Risk Assessment and Forensic Investigation Reports.
Specifically, a statement by Mohammed Kudu Ibrahim, head communications and public affairs, quoted Umar as saying the report showed that Skye Bank’s erstwhile board, led by Tunde Ayeni and management team, led by Timothy Oguntayo, engaged “in insider abuse, poor corporate governance and banking malpractices.”
The reports, he continued, “identified various malpractices such as fraudulent false accounting, manipulation of accounting records to present false profits and ratios, unlawful loan and credit facilities, non-disclosure of directors’ interests and lending beyond the single obligor limit.”
He assured that the NDIC and Central Bank of Nigeria (CBN) are monitoring ongoing investigations by law enforcement agencies instituted against the directors and management of the failed Skye Bank Plc to determine their culpability in the failure.
NDIC’s implementation of the bridge bank resolution option, he told the judges, gave birth to Polaris Bank Limited, which assumed the assets and liabilities of the defunct Skye Bank Plc.
The move, he stressed further, helped to ensure that unlike in the past, depositors continued to have unhindered access to their funds, the continuity of the operations of about 300 branches and the preservation of over 6,000 jobs, thereby enhancing confidence in the system.
Speaking further, the MD/CE informed participants that the Corporation has commenced the payment of insured deposits to depositors of the 153 Microfinance and six Primary Mortgage Banks whose licenses were recently revoked by the CBN. He noted that the Corporation performs this statutory mandate by its appointment as Liquidator through a Winding Up Order granted by the Federal High Court.
The NDIC Boss described the collaboration between the Corporation and the judiciary as a valuable engagement towards the development of the financial system and the effective implementation of the Corporation’s mandate.
He said the seminar for Federal High Court Judges, with the theme: “Challenges to Deposit Insurance Law and Practice in Nigeria,” was designed specifically to address topical issues in Bank Supervision such as the regulatory framework of systematically important banks, the robustness of the legal system to facilitate criminal prosecution of Bank Directors and debt recovery under the Failed Banks Act.
In his contribution at the event, Chief Judge of the Federal High Court, Justice Abdul A. Kafarati, commended the NDIC for sustaining the interactions through the sensitization seminars.
He assured that the impact of such interface has been a deeper appreciation of the implications of the mandate and activities of the corporation, resulting to more proactive and accurate adjudication of cases brought before the courts.
He expressed optimism that the broadening of the scope to include topical issues will further deepen the impact of the seminar towards addressing current regulatory issues in the financial system and the dispensation of more informed judgments.

Photo Caption: MD/CEO of NDIC, Umaru Ibrahim in a chat with Chief Judge of the Federal High Court, Justice Abdul A. Kafarati, at the 2018 NDIC Sensitization Seminar for Federal High Court Judges in Abuja on Monday, November 12, 2018.

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