CBN Moves to Return ETB to Mike Adenuga

Written by Duncan Friday, 23 October 2009

The Central Bank of Nigeria (CBN) is set to return Dr. Mike Adenuga Jr. to the Board of the Equitorial Trust Bank (ETB), THISDAY has learnt.

The newspaper was informed that the CBN Governor, Mallam Sanusi Lamido Sanusi, was inclined to return Adenuga to the Board following the concrete steps taken thus far by Adenuga to shore up the capital base of ETB with the injection of an initial capital of $150 million.

A CBN official told THISDAY that since no criminal activity, such as insider lending and money laundering, was found against Adenuga during the special audit of banks operating in the country, “the most plausible step to take now is to reinstate him as a non-executive director of ETB and guide the bank in resolving any observed issues”.

Sanusi, THISDAY learnt, has consulted widely with the CBN Committee of Governors, comprising the governor and his deputies, as well as the Nigeria Deposit Insurance Corporation (NDIC), over the development.

Unlike other troubled banks in which serious infractions bordering on criminal activities were discovered, ETB was said to have been affected by the last CBN action mainly because of the ownership structure.
The CBN had on October 2 sacked the Managing Director of the bank, Mr. Ike Oraekwuotu, and removed Adenuga as a non-executive director after a special audit of the remaining 14 banks.

In the build-up to the resolution of the ETB issue, the CBN also met with Adenuga and other shareholders of the bank and endorsed their offer to re-capitalise the ETB with an initial injection of $150 million.

“Adenuga’s offer is positive and since he was not found to have been involved in any criminal infraction, we decided to resolve the issue as quickly and smoothly as possible without compromising on audit,” a highly placed CBN official said.

THISDAY checks revealed that while Sanusi frowned on “sole proprietorship” of banks because of deep concerns over internal checks and control, he was convinced after the review of the ETB case that the decision to restore Adenuga to the ETB board was the fair and professional step to take, particularly since no criminal infraction that could dislocate the Nigerian economy was perpetrated in ETB when Adenuga served on the Board as non-executive director.

The CBN, it was also gathered, was unwilling to inject government money into ETB, a private limited company with a few shareholders. It is not quoted on the stock exchange.

The new move by the CBN is seen as buttressing the position of the CBN Governor in the wake of the reform in the banking sector that it has no ethnic coloration.

Following his confirmation as the CBN Governor by the Senate, Sanusi promised to make risk management, reporting and regulation as his three key areas of focus.

Many analysts are of the opinion that the ongoing reform in the banking sector will grow local and international confidence in the Nigerian economy.

Eight bank MDs have been sacked since the August 14 intervention in banks by the CBN over issues of liquidity, capital adequacy and corporate governance. The banks affected are Intercontinental, Oceanic, Union, Afribank, FinBank, BankPHB, Spring and ETB.

The sack of ETB chief executive and the removal of Adenuga as a non-executive director took many analysts by surprise because of the profile of Dr. Adenuga, a highly respected entrepreneur and one of the biggest employers of labour in the country.