How Nigerian banks allegedly rip-off Imo state over N112bn

A Financial Advisory Committee set up by recently sacked Imo State governor, Emeka Ihedioha, as part of his development agenda, has revealed an alleged financial impropriety which saw the State loses over N112 billion to nine commercial banks under the administration of former governor Rochas Okorocha.

Ihedioha had set up the Eight-man Advisory Committee led by Dr. Abraham Nwankwo, former Director General of the Debt Management Office (DMO), and his Chief Economic Adviser, to probe the financial dealings of the Okorocha administration.

The Committee was tasked with the major responsibility of ascertaining and documenting the locations and balances on all bank accounts operated by Imo State government, its ministries, departments, and agencies as at May 29, 2019.

The committee would also review all financial transaction and carry out a forensic audit to establish sources of funds and how they are disbursed.

Subsequently, the committee engaged the services of 10 consulting firms to probe the state’s finances; as well as its accounts with commercial banks in the eight years preceding the Ihedioha administration.

Despite the sacking of Ihedioha as Imo Governor, the committee sat through its mandate and on Thursday February 6 released its financial report via a detailed memo signed by Nwankwo, the Chairman of the Committee, and addressed to the new governor, Senator Hope Uzodinma.

An excerpts of the financial report sent to Governor Uzodinma stated; “As you may be aware, your predecessor, Rt. Hon. Emeka Ihedioha, set up a Financial Advisory Committee to support his developmental agenda for the State…In the course of the assignment, we carried out a review of the State’s accounts with Commercial banks during the eight years preceding the Ihedioha administration.

“Based on the joint report of the consortium of Consultants, the nine banks that came under review were to refund the sum of N74,602,631,560.46 (Seventy-four Billion, Six Hundred and Two Million, Six Hundred and Thirty-One Thousand, Five Hundred and Sixty Naira and Forty Six Kobo) to the state as principal amount involved in such infractions and attendant penalties.

“In addition to that, the sum of N38,221,701,806.96 (Thirty-Eight Billion, Two Hundred and Twenty-One Million, Seven Hundred and One Thousand, Eight Hundred and Six Naira and Ninety-Six Kobo) were to be claimed covering the principal sum and attendant penalties arising from the aggregation of debit entries to the State accounts without proper narrations and for which no explanation was provided to the Committee despite repeated demands.

“In summary, a total of N112,824,333,367.42 (One Hundred and Twelve Billion, Eight Hundred and Twenty-Four Million, Three Hundred and Thirty Three Thousand, Three Hundred and Sixty-Seven Naira and Forty-Two Kobo) is being claimed against the banks.

“Notably, a particular bank is liable to refund about N73,281,899,828.66 (Seventy-Three Billion, Two Hundred and Eighty-One Million, Eight Hundred and Ninety-Nine Thousand, Eight Hundred and Twenty Eight Naira and Sixty Six Kobo) of the primary amount and all of the secondary amount of N38,221,701,806.96 (Thirty-Eight Billion, Two Hundred and Twenty-One Million, Seven Hundred and One Thousand, Eight Hundred and Six Naira and Ninety-Six Kobo).

The audit report further stated that despite the 30-day notice given to the banks to refund these debts; many of them are yet to comply with this order.

“…A majority were yet to respond in any form to the claims made against them leaving one with the impression that they have no factual basis to repudiate the claims,” the report reads.

The Abraham Nwankwo Committee stated that when it held its last meeting on January 14, 2020, a number of measures were being considered to ensure that these claims were pursued.

Incidentally, according to the Committee, those options required the approval of then Governor Ihedioha but had to be aborted following the change in guard on that fateful day.

“We considered the amount involved as not just significant but humongous and its recovery is certainly deserving of whatever attention or effort that may be necessary,” the Committee stated.

It added; “Based on the work we did in the Committee, we are aware that our dear State is in dire financial straits and the recovery of the aforementioned claims would go a long way in augmenting the resources needed for the implementation of the State’s development agenda.

“Also, if the recovery process is aggressively pursued with the required will, it would make it unnecessarily for the State to have a recourse to bank borrowings in order to fund the provision of infrastructure and sundry services.

“…It would be a grave and historical insult, assault and financial rape of the people of Imo State if the recovery of these claims from the affected banks is not vigorously pursued under whatever excuse,” the Committee summed.