CBN, NDIC monitor investigation of Skye Bank directors

The Central Bank of Nigeria (CBN) and the Nigeria Deposit Insurance Corporation (NDIC), closely monitor the investigation of the management and directors of the defunct Skye Bank Plc.

National Daily learnt NDIC Managing Director, Umaru Ibrahim, confirmed the investigation in Abuja on Monday; he admitted that the CBN and NDIC, two financial sector regulatory authorities, are monitoring closely the investigation of Skye Bank Plc. management by law enforcement agencies to ascertain involvement in the collapse of the bank.

It was recalled that the CBN and NDIC announced the revocation of the operating license of Skye Bank and the establishment of a bridge bank, Polaris Bank, on September 21, to take over its asset and liabilities.

CBN Governor, Godwin Emefiele, was said to have admitted in consultation with the NDIC MD, Ibrahim, which the CBN decided the Asset Management Company of Nigeria (AMCON) would capitalise the bridge bank and begin the process of sourcing investors to buy out AMCON.

The CBN governor was said to have further admitted that they resolved that board members and management of Skye Bank should be retained after consideration of their “good performance”, while all its employees would be absorbed by Polaris Bank under new contracts.

However, NDIC MD at the opening of the Corporation’s 2018 Sensitisation seminar for Federal High Court Judges in Abuja, revealed that Skye Bank management and directors are facing investigation by security agencies.

“NDIC’s Risk Assessment and Forensic Investigation Reports revealed the erstwhile management of the failed Skye Bank Plc. contributed to its failure by engaging in insider abuse, poor corporate governance and banking malpractices,” Ibrahim was cited to have said.

The MD narrated that the reports identified various malpractices perpetrated by the directors, including 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.

National Daily learnt that the NDIC MD explained that the decision to adopt the bridge bank resolution option by establishing Polaris Bank Limited to take over the asset and liabilities of the defunct Skye Bank Plc was to prevent depositors’ unhindered access to their funds. He maintained that the resolution facilitated continuity of the operations of about 300 branches of the bank and the preservation of over 6,000 jobs.

In 2016, Skye Bank came under the radar of the CBN after it discovered some “unacceptable corporate governance lapses.”

The bank’s persistent failure to meet minimum thresholds in critical prudential and adequacy ratios culminated in its permanent presence at the CBN Lending Window.

On July 4, 2016, the CBN took a regulatory action on the bank, leading to the resignation of its chairman, all non-executive directors on the board as well as the managing director, deputy managing director, and the two longest-serving executive directors on the management team.