As a result of the implementation of the bridge bank resolution option that established Polaris Bank which assumed the assets and liabilities of the defunct Skye Bank, no less than six thousand jobs were preserved, the intervention also resulted in depositors’ unhindered access to their funds, and the continuity of the operations of about three hundred branches of the bank.
The Managing Director and Chief Executive of the NDIC, Umaru Ibrahim who made the disclosure at the opening ceremony of the Corporation’s, 2018 Sensitization seminar for Federal High Court Judges in Abuja, said the Corporation’s Risk Assessment and Forensic Investigation Reports revealed that the erstwhile management of the failed Skye Bank contributed to its failure by engaging in insider abuse, poor corporate governance and banking malpractices.
He said the Corporation has commenced the payment of insured deposits to depositors of the 153 Microfinance and 6 Primary Mortgage Banks whose licenses were recently revoked by the CBN, noting that the Corporation performs this statutory mandate by its appointment as Liquidator through a Winding Up Order granted by the Federal High Court.
While saying that the Corporation and the Central Bank of Nigeria (CBN) are monitoring the investigations of law enforcement agencies instituted against the directors and management of the failed Skye Bank to determine the culpability of the directors and management in the failure of the bank, he disclosed that reports identified various malpractices such as fraudulent false accounting, manipulation of accounting records to present false profits and ratios, unlawful loan and credit facilities among others.
A statement signed by the Head, Communications and Public Affairs, NDIC, Mohammmed Kudu Ibrahim quoted the NDIC Boss as describing the collaboration between the Corporation and the Judiciary as a “valuable engagement towards the development of the financial system and the effective implementation of the Corporation’s mandate.”
According to the Managing Director, the seminar for Federal High Court Judges with the theme “Challenges to Deposit Insurance Law and Practice in Nigeria” was specifically designed to address topical issues in Bank Supervision such as the regulatory framework of systematically important banks, the robustness of the legal system to facilitate criminal prosecution of Bank Directors and debt recovery under the Failed Banks Act.
While commending the NDIC for its continued interactions with the Federal High Court through the sensitization seminars, the Chief Judge of the Federal High Court, Honourable Justice Abdul A. Kafarati said the impact has been a deeper appreciation of the implications of the mandate and activities of the Corporation which has led to more proactive and accurate adjudication of cases brought before the courts. He expressed optimism that the broadening of the scope to include topical issues will further deepen the impact of the seminar towards addressing current regulatory issues in the financial system and the dispensation of more informed judgments.