A major crisis looms in the financial sector, as all banks in the country may shut their doors to customers anytime this week, as their chief executive officers (CEOs) move to protest the continued detention of their staff by the Department of State Security (DSS).
Daily Sun gathered that the CEOs are irked by the arrest and detention of several key officials of no fewer than 13 banks over the last two weeks by security operatives, saying that this has not only crippled their operations but also poses a great risk if normal banking operations continues.
The 13 banks directly affected by the arrests are Zenith Bank, Access Bank, Fidelity Bank, Unity Bank, First City Monument Bank (FCMB), First Bank Plc, Skye Bank, Sterling Bank, Diamond Bank, Ecobank, Wema Bank, Guaranty Trust Bank and CitiBank.
The arrest of the bank officials are linked to money laundering case against the Jigawa State governor, Alhaji Sule Lamido, a key member of the G7 governors, who is also one of the arrowheads of the New PDP believed to be opposed to President Goodluck Jonathan’s rumoured second term ambition.
The DSS is said to be investigating questionable transactions involving the governor and two of his sons, Aminu and Mustapha, who is the District Head of Bamaina, their hometown. While the governor is said to have escaped arrest, as a result of his constitutional immunity, his two sons were arrested last week by the Economic and Financial Crimes Commission (EFCC). However, it is the DSS that is handling the case of the bankers.
According to the DSS, following the arrest of Aminu, last year, at the Aminu Kano International Airport Kano, for failing to make full declaration of the $50, 000 he had on him while trying to board a flight to Egypt, where his wife was receiving treatment, further investigation of the sources of income of the governor’s son revealed huge transactions involving the movement of Jigawa State funds into accounts of companies in which both the governor and his two sons are believed to have interest. The amount involved, according to the DSS, is about N10 billion.
The DSS had subsequently swooped on the 13 banks in which the companies have accounts and even obtained a court order to freeze the accounts. Also, it had begun a systematic arrest and detention of senior officials of the bank in the last two weeks.
While not questioning the powers of the DSS to arrest anybody, a source close to one of the bank chief executive told Daily Sun yesterday that the CEOs were worried that the bankers have been held without arraignment, for over two weeks, a clear violation of their rights.
“The laws of the country say that nobody can be detained for more than 48 hours without been charged to court,” the source said, adding: “Some of them have now been detained for 16 days without access to their families or lawyers. They are being held incommunicado.”
According to him, the bank chiefs, some of who met last weekend, are saying that they might not have any other choice than to shut down operations, as some of the officials being detained are key to their operations.
“One of those arrested is a director. Some others are risk managers, fraud control and detection officers, zonal and regional coordinators and key IT experts. There are compliance managers among the arrested. There are also account officers, branch managers, chief inspectors and heads of treasury among those arrested. To continue to operate without these key personnel could expose depositors’ funds to serious danger. So, the bank CEOs are thinking it might be safer to close shop to secure depositors’ funds and reduce expose to a possible collapse of the nation’s banking system,” the senior bank sour said.
Apart from the risk of possible compromise of the system, the bank chiefs are also frowning at the propriety of the DSS action. They fear that, unlike the EFCC and the Central Bank of Nigeria (CBN), which have the wherewithal to investigate bank transactions and fraud, the DSS may not be threading on a familiar turf.
The source said: “The banks daily, and statutorily, report transactions and fraud alerts to both the EFCC and the CBN. If there is any suspicion over such transactions, the DSS can crosscheck and verify with both the EFCC and the CBN. It is rather shocking that the investigation of transactions by companies of the sons of the Jigawa State governor would warrant such mindless and elaborate disruption of banking operations in 13 banks, which is what this arrest and continued detention of these critical bank official amount.”
Another source close to a bank CEO said the manner of arrest was an issue also. According to him, the idea of literally kidnapping these bankers and traumatising their families is particularly unfair.
“Even though none of the officials was said to have resisted arrest or refused to co-operate with the security operative, the security personnel still hounded them down like common criminals. Some were aroused from sleep, with machine guns pointed at them and their family members,” the source stated.
He particularly pointed to a case in Lagos, where the child of the affected officer was rudely awoken from sleep by scores of gun-wielding operatives, who were turning their home upside-down, allegedly searching for documents.
According to him, another of the bankers arrested in Lagos was eventually moved to Abuja in a military aircraft.
He said the bank chiefs, who are seriously considering the option of closing shop and going on strike may make true their threat anytime between today and Wednesday, to secure depositors’ funds, which, he said, have been exposed to grave danger, by the arrests.
When contacted on the development last night, a highly placed officer of the DSS said the service was unmoved by the threat of the strike,
“I dare them to try it. Nigeria will not collapse. We might be forced to go public with information we have on what they are doing, both the governors and the bank chiefs. If you tell Nigerians the whole truth the citizens of some of these states would want to stone their governors. It’s not only the Jigawa case. Many governors are also into it. Also, it is not about, nor is it restricted to G7 governors. It cuts across.”
On the propriety of the DSS investigating and arresting bankers, the officials directed the CEOs to the statues setting up the service.
“Our brief covers what we are doing. We are empowered to investigate both security and financial crimes that could have security implications,” he insisted.
He further asked: “How can somebody steal as much as N75billion that has the capacity to upturn the entire economy and you say you can’t investigate?”
He said that era of people using strike and all manner of threat to blackmail security officials from uncovering their dubious ways have passed. “Let them go on strike and we would get our bosses to address a press conference to go public with what we have uncovered,” he fired back.
Daily Sun gathered that the law actually empowers DSS to probe financial crime. Instrument 1 of May 1999 empowers the service to carry out the prevention, detection and investigation of: a) Threat of espionage; b) threat of subversion; c) threat of sabotage; d) economic crimes of national security dimension; e) terrorist activities; f) separatist and inter-group conflicts; g) threat to law and order.
All efforts to get the CBN to comment on the development proved abortive, as calls to the line of the apex bank’s governor kept saying it was switched off.
Similarly, he was yet to reply an SMS to that effect as at press time last night.