Those responsible for Skye Bank’s failure will face the law soon

The Federal Government of Nigeria has made known its intent to prosecute all those who will eventually be found responsible for the unfortunate collapse of the now-defunct Skye Bank Plc.

The country’s Minister of Finance, Mrs Zainab Ahmed, is reported to have disclosed this yesterday (Friday, October 5th) in Abuja when she visited the Nigerian Deposit Insurance Corporation, NDIC.

During the visit, Mrs Ahmed demanded that the NDIC Managing Director, Mr Umaru Ibrahim, carries out an investigation that will unearth the reasons behind the bank’s failure as well as all those behind it. Anyone found guilty will be prosecuted and jailed, she said.

Madam is talking tough…

The Minister also stated that it is high time Nigeria starts to show some examples of what could happen to corporate executives in cases of corporate mismanagement that ultimately result in corporate failure.

“All those found culpable in the failure of the bank would be prosecuted. We have to show some examples. We cannot just be bailing out banks and leaving perpetrators of the failure of these banks to just go scot-free.”

She further urged the NDIC to monitor banks closely in order to detect problems early before they are immersed in serious financial troubles such as the one that has resulted in Skye Bank’s failure.

Note that this is the first time Mrs Ahmed is commenting on issues of this magnitude since taking over from her predecessor, Kemi Adesosun, last month.

More on the matter

As we exclusively reported, Nigeria’s apex bank, the Central Bank of Nigeria, on September 21st announced an immediate revocation of Skye Bank Plc’s operating license. The bank’s share capital had run into negative territory due to bad loan deals. It was also in urgent need of recapitalisation which its shareholders could not enable.

As part of this development, therefore, the bank’s name was changed to Polaris Bank Limited; a bridge bank which is to oversee the liquidated entity until Asset Management Corporation of Nigeria (AMCON) finds a new buyer.

In the meantime, the CBN Governor, Godwin Emefiele has repeatedly explained the legal reason behind the bank’s name change. According to him, “the Central Bank of Nigeria and the Federal Government has invested close to N800 billion in this bank, at some point, it had to be seen to be owned by the CBN.”