THE Nigeria Deposit Insurance Corporation, NDIC, is ready to re-arrest and prosecute the directors of failed licensed banks in Nigeria. The NDIC in a statement on Wednesday, April 19, said the task force on the implementation of the failed bank Act would soon begin to re-arrest the directors and officers of such banks who had committed malpractices and had absconded.

The task force is made up of representatives of the NDIC, federal ministry of justice, Central Bank of Nigeria, Failed Banks Inquiry (now Financial Malpractices Investigation Unit), special fraud unit of the Nigeria Police Force, and the Economic and Financial Crimes Commission, EFCC. B. A. Taribo, director of legal department, NDIC, said in the statement that the planned arrest became imperative following discoveries that some of the bank directors, who absconded during prosecution, had started returning into the country.

According to the statement, the task force had at its 38th meeting reviewed some pending investigations by the Police Financial Malpractices Investigation Unit under the Failed Banks Act, comprising 17 cases involving 10 closed microfinance banks in which 15 former directors of the MFBs were involved. It also reviewed two cases of closed Deposit Money Banks involving their former directors where it was discovered that some of them were facing trial for malpractices involving N15.1bn of depositors’ funds.

The statement said the task force also reviewed about 16 criminal cases being prosecuted under the Failed Banks Act in which prosecution had been stalled as a result of the fact that the accused persons had jumped bail and absconded from the country in the heat of investigation and prosecution. The sureties that took them on bail, according to the statement, also disappeared.

The statement read in part, “The task force noted that some of those accused persons had sneaked back into the country in the hope that their prosecutions might have been terminated. It is against this backdrop that the task force gave the notice that such accused persons would be re-arrested and prosecuted to serve as a warning to other bank offenders, adding that the task force would leave no stone unturned to ensure that erring bank offenders were brought to book.”

The Failed Banks (Recovery of Debts) and Financial Malpractices in Banks Act, 1994 was promulgated to recover debts owed to liquidated banks, which had remained outstanding as of the date the banks were closed or declared as failed. It was also meant to prosecute directors and officers of licensed banks who had committed banking malpractices. In July 1995, the Inspector General of Police established a special police unit to assist the NDIC and the CBN to implement the criminal aspects of the Failed Banks Act through investigation of criminal complaints.

—  May 1, 2017 @ 01:00 GMT