story by crossriverwatch admin
Nigeria’s leading human rights activists and social commentators have condemned the directive by the Central Bank of Nigeria to commercial banks in the country to stop advancing credit to Cross River State because of the failed $350 million Tinapa Business Resort.
The apex bank in a circular, which was signed by CBN’s Director, Banking Supervision, Mrs. A. O. Martins, stated that “it has become necessary to stop debtors who failed to repay their loans to banks and had these loans subsequently transferred to AMCON, from further enjoying credit facilities from Deposit Money Banks (DMBs) until they fully repay agreed outstandings to AMCON.”
The restriction, according to the central bank, came into effect from September 17, 2012 and shall remain “until full liquidation of agreed indebtedness to AMCON”.
To ensure compliance, the CBN warned that any bank that flouts the guidelines would be made to make an immediate provision of 100 per cent of total principal and interest outstanding in the account of the customer and related parties, in addition to whatever regulatory penalties the CBN may decide to impose.
But Nobel Laureate, Professor Wole Soyinka told crossriverwatch on phone today that “it is unbelievable that the central government will continue to hound that state (Cross River) in this manner. I don’t think it is the right thing for the CBN to transfer the liability of an incorporated company on a State that is still groaning under the transfer of oil revenue from 76 oil wells to a neighboring state”.
Legal luminary, Femi Falana SAN, also criticized the decision of the apex bank arguing that “I think the CBN went beyond its brief. It is out of the regulatory authority of the CBN to try to determine who the customer of any bank should be. Even if Cross River State is a shareholder in Tinapa, the CBN cannot transfer or attribute the liability of Tinapa to the State. It is wrong”.
Lagos lawyer and civil rights activist, Festus Keyamo who spoke to crossriverwatch from Ghana wondered why the federal government was after Cross River State. He said: “how can you strip a state of revenue from 76 oil wells and soon after you are also directing commercial banks not to give credit to that state? Cross River State and Tinapa are two different entities under the law. They may be related one way or the other but the law does not permit the CBN to transfer the liabilities of an incorporated company on a state whether the state owns shares in that company or not. What the CBN should have done was to seek to punish the company and not the state.”
On the same note, Mohammed Fawehinmi, son of the late human rights icon Chief Gani Fawehinmi told crossriverwatch that “Cross River State can proceed to court to seek legal interpretation on the role of the CBN in determining who a commercial bank should advance credit to or not. If the Tinapa project failed, what has the CBN and other anti-corruption agencies done to bring those who collected those loans to book? Rather than run after those who collected loans and mismanaged those loans, the CBN is further compounding the financial crises of a state that just lost oil revenue from 76 oil wells to neighboring Akwa-Ibom State.”
Founder of Nigerian Action Party (NAP) and frontline human rights campaigner, Dr. Tunji Braithwaite, also told crossriverwatch on the phone that “the CBN knows who is behind the failure of the Tinapa Project. The Tinapa project was like a “Ponzi Scheme”. What the CBN should have done was to bring those who perpetrated that profligacy to trial. To unmask them and bring them to justice and sentence them to like 80years or more in jail instead of punishing everyone in Cross River State by directing that banks should not give credit to the state. I believe the state can increase the tempo of advocacy to upturn that directive or proceed to court to seek legal interpretation of the legality of that directive”.
Cross River State born Nollywood ace actress, Kate Henshaw also did not spare the apex bank. She told crossriverwatch that “this is not fair. The Governor of Cross River State is trying his best with very little resources to see how he can develop the state and the CBN is coming with this directive on the heels of the decision of the Supreme Court that deprived the state of oil revenue. Are they trying to bankrupt the state? How do they want the state to run? They have collected Bakassi, they have collected 76 oil wells, now they are directing banks not to advance credit to the state. How do they want the State to run? The CBN should not join those who have conspired against the state.”
In his reaction, the former governorship candidate of Hope Democratic Party in the State, Dr. Theo Onyuku said: “the Tinapa Business Resort was deliberately initiated as a conduit pipe to siphon public funds abroad. It was built on a foundation of fraud and was meant to loot our resources without trace. It has no connectivity, no linkage to the fundamental needs of our people. Where are the management consultants who promised us Eldorado when the Tinapa Business Resort was under construction with fake, fallacious statistics all to con the people of Cross River State? Today the Tinapa Business Resort has become an abandoned wasteland inhabited by rodents, reptiles and birds. The Hope Democratic Party wants the EFCC to carefully probe this monumental fraud called Tinapa Business Resort”.
A group, Cross River Professionals (CRP), in a statement sent to crossriverwatch, have also threatened to commence legal action against the CBN if that directive is not rescinded within two weeks. The statement signed by the group’s coordinator Mr. Frank Ndoma Ndoma said in part: “the directive by the CBN that commercial banks should stop advancing credit to Cross River State is most callous, inconsiderate and capable of crippling the laudable programs of the Imoke administration”.
“We are particularly pained by the fact that this is coming on the heels of the conspiracy that deprived the state of 76 oil wells revenue. We are appealing to the CBN Governor to be more circumspect and avoid actions that have the capacity to create crises in the State. The apex bank should explore avenues of bringing those who mismanaged the loans meant for the development of Tinapa to book and refrain from action targeted at denying the state access to funds that could assist the government in developing the state. CBN should rescind that directive or we shall proceed to court in two weeks to seek legal interpretation over the matter”.
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