GOV SULE LAMIDO'S CHILDREN'S LOOTING SPREE. WHEN BANKS LAUNDER MONEY, TURN A BLIND EYE AND MAKE SPURIOUS GAINS : Worries over Arrests of Top Bankers for Alleged Money Laundering and Terrorist Financing ... NigerianCommunicationsWeek.

The banking industry and State Security Service (SSS) are embroiled in claims and denials over the continued detention of senior personnel of 13 Nigerian banks for alleged terrorist financing and money laundering believed to have been perpetrated by Aminu Suleiman Lamido, son of Alhaji Sule Lamido, Jigawa State governor. The banks whose staff are affected are Fidelity Bank Plc, First City Monument Bank Plc (FCMB), Wema Bank Plc, Access Bank Plc, Skye Bank Plc, First Bank Nigeria Limited (FBN), Sterling Bank Plc, Diamond Bank Plc, Zenith Bank Plc, Unity Bank Plc, Ecobank Plc, Guaranty Trust Bank Plc (GTBank) and Citibank. THISDAY reeported that the chief executive officers of the affected banks have continued to receive a barrage of phone calls from both foreign institutional investors and their foreign partners over the allegation. Some financial market analysts have also warned that the development, which is being closely watched by the global financial community could make foreign banks shut down credit lines, not just to the affected banks, but to all the other local banks. In addition, it may also lead to the withdrawal of funds from the Nigerian banking system by the banks that have international affiliations, international institutional investors and may hamper the performance of banks listed on international stock markets. Some of the banks with foreign investors include Diamond Bank, which has the International Finance Corporation (IFC) and Actis as institutional investors. The bank had also issued a Global Depository Receipts (GDR) and had done a private placement in US dollars in the past. Also, Zenith Bank which issued a GDR last year, is also listed on the London Stock Exchange (LSE). In the same vein, GTBank which has investment by IFC, had issued both the GDR and Eurobond and is concluding plans to float another $400 million Eurobond. It is also listed on the LSE. While First Bank and Fidelity Bank have respectively tapped from the Eurobond and GDR markets, Citibank and Ecobank are international banks. In addition, FCMB also has foreign investor in form of Sabre Capital, while Access Bank has investments from IFC and FMO, the private sector investment arm of the government of Netherlands, and had issued a Eurobond and GDR. Commenting on the development, the chief executive officer of a leading financial advisory firm, who preferred anonymity, said: “It will make things extremely difficult for Nigerian banks. Firstly, if you remember in the last five years, Mallam Sanusi Lamido Sanusi, governor of the Central Bank of Nigeria (CBN), has been applauded and acknowledged for cleaning the system and so for anybody to come out now to say there is rot in the system, puts a lot of question mark on what the CBN had done. “Foreign banks that have availing credit to Nigerian banks were doing so on the grounds that the banking system is transparent and properly governed, so the allegation might make some of them to start having a rethink on their relationship with Nigerian banks." Continuing, he explained: “For a bank like GTBank that has plans for a roadshow to market its Eurobond, it cannot do so again until this allegation is sorted out. For banks like Zenith, Fidelity, First Bank, Ecobank, Citibank, FCMB, Access and Diamond that have foreign investments in form of Eurobond, GDR and other form of partnership, they will feel the heat, which is not good for the country. “The situation has the capacity of limiting foreign investment and participation in the Nigerian banking system, especially at a time when government is talking about attracting more foreign investment. So we may start seeing the exit of some of these foreign investors to countries like Ghana or Cote d’ Ivoire if the situation is not properly managed.”