Three Banks That Died in Nigeria Due to CEO, Chairman's Alleged Fraudulent Act

Three Banks That Died in Nigeria Due to CEO, Chairman's Alleged Fraudulent Act

  • Banks in Nigeria are often taken over by other financial institutions, but before they do, the lenders are mostly in financial distress
  • Some of the most famous Bank demise are not publicly recognised again as they now carry another name of their acquirer to avoid customer mistrust
  • Factors that lead to most banks' demise are mismanagement of financial resources, owners of the banks taking or issuing unsecured loans

Very often, financial crisis of a bank doesn't start from outside, it begins within, and the problem didn't start from the root, but from the top, as this report shows the role Bank heads played in the death of their firm.

The most common factor that crippled banks in Nigeria is mismanagement or insider abuse by top management who gave out depositors funds without backing them with collateral.

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This mismanagement occurred in banks that were once the cynosure of the financial market in Nigeria, and involved some of the majestic individuals known in the financial space.

Three Banks That Died in Nigeria Due to CEO, Chairman's Alleged Fraudulent Act
Tunde Ayeni, Cecilia Ibru, Erastus Akingbola. Photo: APCUKingdom (R), Gen_Buhar (T-L), ChiddyNwankwor (B-L)
Source: Twitter

Below are the top three top bank heads whose mismanagement led to the end of their financial institution.

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Cecilia Ibru/Oceanic Bank

The top banker is from the Ibru family, one of the elites in Nigeria. She became the General Manager of Oceanic Bank in 1990, but seven years later, Ibru was made the managing director and CEO.

But in 2009, her tenure was cut short following multibillion-dollar banking scandal allegations against her, which crippled Oceanic Bank - Ibru was said to have provided unsecure loan, which weakened the financial capabilities of Oceanic.

However, she was convicted on 25 counts of fraud on October 8, 2010 (pleaded guilty to three), imprisoned for six months, as well as ordered to forfeit $1.2 billion (£786 million) in cash and assets.

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Ecobank Transnational later took over Oceanic Bank, and Ibru was replaced with John Aloh by the Central Bank of Nigeria (CBN).

Tunde Ayeni and Timothy Ajani Oguntayo/Skye Bank

For Skye Bank, it was a joint effort from the company's Chairman Tunde Ayeni and Timothy Ajani Oguntayo, the Managing Director, both of whom were arraigned for money laundering N3 billion.

Ayeni was detained by the Economic and Financial Crimes Commission in 2019 after receiving an exparte, but he regained his freedom a week later after the court set aside the exparte order.

He became the chairman of Skye Bank in 2011, but owed the bank about N102 billion before he resigned in 2016 following the CBN intervention. He and Oguntayo were replaced by Alhaji M.K Ahmad and Tokunbo Abiru respectively.

The default Skye Bank license was revoked in 2018 as the bank was surviving on CBN's financial aid thanks to alleged insider abuse and banking malpractices by its management, according to NDIC.

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Erastus Akingbola/Intercontinental Bank Plc

Akingbola, who was the Managing Director of Intercontinental Bank before his removal by the CBN in 2009, was said to have received N12 billion belonging to depositors through his accounts.

His ouster led to the voluntary exit of 26 senior management officers of Intercontinental Bank, while the EFCC filed a N47.1 billion theft charge against Akingbola in 2014.

The mismanagement of Akingbola-led bank resulted into the death of Intercontinental Bank in 2009, however, Access Bank acquired the lender in 2012, ending the 22-years reign.

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Where you see problems, some individuals see cash cow, and they devise means to resolve these challenges in exchange for money.

These individuals are Iyinoluwa Aboyeji, Romain Poirot-Lellig, Etop Ikpe, and Obi Emetarom, who have grossed millions of dollars from their businesses.

They individually founded Appzone, Flutterwave, Cars45 and Kwik Delivery, some of the most notable disruptors in Nigerian tech market.


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