Calls For Investigation Into Heritage Bank Collapse Gathers Steam

In the wake of the Central Bank of Nigeria (CBN) revoking Heritage Bank’s licence, minority shareholders are calling for a thorough probe into the bank’s management and directors. The revocation, announced by the CBN, cited the bank’s persistent financial instability as a critical factor, endangering the nation’s financial system.

CBN explained that the decision was made due to Heritage Bank’s breach of Section 12 (1) of BOFIA, 2020. Despite the CBN’s supervisory measures to curb the bank’s decline, the bank showed no signs of recovery, leading to the licence revocation and the appointment of the Nigeria Deposit Insurance Corporation (NDIC) as the liquidator, as per Section 12 (2) of BOFIA, 2020.

Boniface Okezie, National Coordinator of the Progressive Shareholders Association, emphasised the need for a probe to restore confidence in the banking sector. He criticised the CBN for not acting sooner and questioned the role of the Asset Management Corporation of Nigeria (AMCON), which should have intervened given the bank’s insolvency.

“CBN is also part of the problem. If the bank had been insolvent for years, why did CBN not take action earlier? AMCON should have taken over the bank, yet now NDIC is tasked with liquidation. This discourages people from using banks. The management should be called for questioning to recover people’s money,” Okezie stated.

Moses Igbrude, National Coordinator of the Independent Shareholders Association of Nigeria, also urged an investigation into the bank’s management. He expressed concern over the delay in the CBN’s decision and suggested alternative measures that could have preserved the bank and its employees.

“They must probe the management. If not, this will happen again. The CBN had another option to rescue the bank by removing the management and installing a CBN-led team. This would have prevented job losses and reassured depositors,” Igbrude argued.

Igbrude questioned the transparency of the CBN’s actions, asking, “Were those in charge mismanaging funds or issuing bad loans? The CBN hasn’t provided details. I would have preferred an option that maintained stability.”

Bisi Bakare, President of the Pragmatic Shareholders Association, supported the CBN’s decision but acknowledged the adverse impact on shareholders. “The CBN has taken the right step. Depositors are somewhat protected, but shareholders will bear the brunt,” Bakare remarked.

The shareholders’ demands for a probe highlight the need for accountability and transparency in the banking sector, aiming to prevent similar occurrences and protect investor interests in the future.