The Nigeria Deposit Insurance Corporation (NDIC) is monitoring investigations of directors and management of the failed Skye Bank Plc being carried out by law enforcement agencies.
The Managing Director and Chief Executive of NDIC, Alhaji Umaru Ibrahim, said on Tuesday that the Corporation and the Central Bank of Nigeria (CBN) were monitoring the enforcement agencies to determine their culpability in the failure of the bank.
According to Ibrahim NDIC’s Risk Assessment and Forensic Investigation Reports revealed that the erstwhile management of the failed bank contributed to its failure by engaging in insider abuse, poor corporate governance and banking malpractices.
He said the reports identified malpractices such as fraudulent 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 limit.
Ibrahim said the implementation of the bridge bank resolution option that established Polaris Bank Ltd which assumed the assets and liabilities of the defunct bank resulted in depositors’ unhindered access to their funds.
He said it also led to the continuity of the operations of about 300 branches and the preservation of more than 6,000 jobs.
Ibrahim said the Corporation had commenced payment of insured deposits to depositors of the 153 Microfinance and six Primary Mortgage Banks that their licenses were recently revoked by the CBN.
He said that the Corporation performed 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 toward 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 specifically designed to address topical issues in bank supervision.
He named some of the issues to include regulatory framework of systematically important banks, robustness of the legal system to facilitate criminal prosecution of bank directors and debt recovery under the Failed Banks Act.
While commending the NDIC for its continued interactions with the Federal High Court, Justice Abdul Kafarati said the impact had been a deeper appreciation of the implications of the mandate and activities of the Corporation.
This, Kafarati said had led 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 would further deepen the impact of the seminar toward addressing current regulatory issues in the financial system. He said it would also address issues of the dispensation of more informed judgments.