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The end may yet not be in sight in the lingering effort by the
Central Bank to sell off the eight banks that were rescued last year.

After injecting N620 billion to resuscitate the banks, the
Central Bank plans to sell the institutions to foreign and local investors in a
bid to keep them afloat and ensure that they are better run.

However, shareholders of the affected banks insist that the
banks will only be sold on their own terms and not according to whims of the
regulator.

After a meeting held with the shareholders in Abuja two weeks
ago, Lamido Sanusi, the Central Bank governor, cautioned that should the
on-going process to recapitalise the affected banks be frustrated, the CBN
would have no other option than to go for liquidation as provided by the
existing legal framework.

Central Bank cannot sell
banks

In what amounts to double speak, Mr. Sanusi said recently that
the Central Bank would not sell the banks as it is not its business to do that.
He said the Bank only recommended some reputable financial advisers, who are
working with the board and management of these banks to source, and negotiate
with any of such investors that can create some value for the affected banks.

But Sunny Nwosu, national
coordinator of the Independent Shareholders Association of Nigeria said the
shareholders cannot trust the executive directors appointed by the CBN.
According to Mr. Nwosu, shareholders will prefer to negotiate with the non
executive directors not appointed by the CBN.

He insisted that the CBN cannot sell any bank because it does
not have the power to sell what does not belong to it. “The only instrument is
for the CBN to liquidate and transfer to the Nigeria Deposit Insurance
Corporation and these two options will be too heavy considering the current
condition of our economy,” he said.

Boniface Okezie, chairman of the Progressive Shareholders
Association of Nigeria said the shareholders should be the ones to decide how
the banks will be sold, stating that a sale supervised by the CBN may not be
transparent. “If the CBN says it has no agenda, then it should allow the
shareholders to recapitalize the banks,” Mr. Okezie said. Mr. Okezie wanted the
CBN appointed directors need to be withdrawn in order for the negotiation for
the sale of the bank to be transparent.

Depositors’ safety

Mr. Nwosu said since the CBN has already guaranteed the safety
of depositors, then the shareholders should be allowed to salvage what is
remaining of the banks. “We have opted for recapitalisation but the CBN is bent
on getting its friends outside the country to buy these banks. The governor
said if any shareholder comes up with N100 billion, he will hand over the bank
to the person,” he said, adding that from the foregoing, the shareholders no
longer trust the CBN to be fair in its dealings.

He said shareholders would need to be given ample time in order for the
shareholders to come up with the funds to recapitalize the banks. “CBN is
saying three months but we need between 12 to 18 months to recapitalize these
banks, after all, most of the problems emanated from the CBN action,” he said.

Mr. Okezie said since Wema and Unity banks were given extension of eight to
nine months, then the rescued banks should be given more than a year for them
to recapitalise. “We all agree that there is need to recapitalise,” he said.
“The banks cannot raise funds now from the capital market or rights issue, so
the only option is to bring in core investors. If you are bringing in core
investors, you must insist that they have a track record of good corporate
governance.”