The Nigeria Deposit Insurance Corporation has said that the Corporation’s Risk Assessment and Forensic Investigation Reports revealed that the management of the defunct Skye Bank contributed to the failure of the bank by engaging in insider-abuse, poor corporate governance and banking malpractices.
Speaking at the opening ceremony of the Corporation’s, 2018 Sensitisation seminar for Federal High Court Judges in Abuja, Managing Director and Chief Executive of the NDIC, Umaru Ibrahim, said the reports 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 said the NDIC and the Central Bank of Nigeria are monitoring the investigations of law enforcement agencies instituted against the directors and management of the failed Skye Bank Plc to determine their culpability in the failure of the bank.
The NDIC boss noted that the Corporation’s implementation of the bridge bank resolution option that established Polaris Bank Ltd that assumed the assets and liabilities of the defunct Skye Bank Plc, resulted in depositors’ unhindered access to their funds, the continuity of the operations of about 300 branches and the preservation of over 6,000 jobs.
Speaking further, he informed participants that the Corporation had commenced the payment of insured deposits to depositors of the 153 Microfinance and 6 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.
Umaru 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 specifically designed 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.
While commending the NDIC for its continued interactions with the Federal High Court through the sensitisation seminars, the Chief Judge of the Federal High Court, Hon. Justice Abdul A. Kafarati, said the impact has been a deeper appreciation of the implications of the mandate and activities of the Corporation which has led to more proactive and accurate adjudication of cases brought before the
courts.
