I guess we have not heard the last of the banking crisis which started in 2009 following the take over of some Nigerian banks. Express Discount House, one of the foremost discount houses during the Stock Market boom was badly affected as they took on several margin loans at exorbitant rates. After years of investigation the CBN has finally revoked their licences and this is the reason they gave;
the decision was taken because EDL no longer had sufficient assets to meet its liabilities, and the shareholders had been unable to inject the capital required for the continuation of its operations. CBN’s earlier examination of EDL’s operations revealed that the company: maintained false and misleading books of account; had huge exposure to Margin Loans; engaged in activities in contravention of Discount House guidelines; indulged in distress borrowing by sourcing funds at rates higher than it could earn by investing the funds; had negative shareholders’ funds and required a minimum capital injection of N21 billion if the company was to continue operation.
More on the story here
