Shareholders call for arrest, probe of failed Heritage Bank MD, EDs

Stanley Ihedigbo

National Coordinator, Progressive Shareholders Association (PSA), Chief  Boniface Okezie, has called for the arrest and probe of the failed Heritage bank Managing Director and Executive Directors, which would boost confidence in the sector.

The senior management of the bank should be questioned and investigated.

He added:  “Central Bank of Nigeria (CBN) is also part of the problem in the system if the bank had been insolvent over the years, and they had been living under the mercy of CBN, which should have taken action.

“In all this, what is the role of Asset Management Corporation of Nigeria (AMCON)? They should have taken over the bank after all, the bank was also paying a levy to AMCON. Instead, CBN has directed Nigerian Deposit Insurance Commission (NDIC) to take over for liquidation. Is that the way to go?

“Someone has N20m in the bank, and you pay them N5m until the assets of the bank have been assessed and liquidated. That is wrong. It is going to discourage people from using banks.

“Besides, is it only Heritage Bank that is insolvent? What is the fate of some other banks in the sector? Are they strong and viable? They should tell us. The management should be called for questioning. Those who ran the bank aground should be called for questioning. It is not enough that NDIC should liquidate.”

Okezie who posited that in other climes, the managers and directors would be held accountable, added that, “There must be a probe to recover people’s money.

“What assets do the bank have? CBN should probe the collapse of the bank so that others can learn. This is not good enough, something has to be done to arrest the situation.”

On his part, the National Coordinator of the Independent Shareholders Association of Nigeria (ISAN), Mr. Moses Igbrude, argued, “They must probe the management of the bank. They should not let it slide because it will happen again if people are let off the hook. Let them investigate exactly what happened to learn lessons and ensure it does not happen again.”

Igbrude, while adding that the decision of the regulator was in line with its legal mandate, but expressed concerns at the time it took to arrive at the decision, maintained that “The CBN is the regulator, empowered by law to supervise, to know which bank is healthy and which is not, so they are just doing their job. However, why did it take so long to do what is necessary?

“Also, they had another option to rescue the bank, remove the management, and put in place a CBN-led management to ensure it is standing and no one loses anything. At the end of the day, they sell it to Nigerians. This option would retain the employees.

“It was an option, but they decided to revoke the licence.

“What happened? Were those in charge not managing it well? Did they give loans that went bad? CBN didn’t tell us. In an environment like this, I would have preferred the option I suggested. That way, the signal would not be as bad as folks are thinking now.”

In announcing the licence revocation, the Central Bank of Nigeria, which declared that the decision was with immediate effect, argued that “This action has become necessary due to the bank’s breach of Section 12 (1) of BOFIA, 2020.

“The board and management of the bank have not been able to improve the bank’s financial performance, a situation which constitutes a threat to financial stability.

“This follows a period during which the CBN engaged with the bank and prescribed various supervisory steps intended to stem the decline.

“Regrettably, the bank has continued to suffer and has no reasonable prospects of recovery, thereby, making the revocation of the licence the next necessary step.”

Consequently, the CBN appointed the Nigeria Deposit Insurance Corporation, NDIC, as the liquidator of Heritage Bank in line with Section 12 (2) of BOFIA, 2020.