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RPT-Nigerian cbank pledge prosecutions; debtors challenge
* Sanusi pledges to prosecute law-breakers
* Says more sackings unlikely
* Debtors question central bank audit
(Repeats Aug 20 story with no changes)
By Joe Bavier and Nick Tattersall
KINSHASA/LAGOS, Aug 20 (Reuters) - Nigeria's central bank chief vowed on Thursday to prosecute any executive found to have broken the law following a massive bank bailout, as challenges mounted to his efforts to recover $5 billion of bad loans.
The central bank injected $2.6 billion into Afribank AFRB.LG, Finbank FIBP.LG, Intercontinental Bank INBK.LG, Oceanic Bank OCBK.LG and Union Bank UBNP.LG last Friday and sacked their senior management, saying lax governance had left them so weakly capitalised that they posed a systemic risk.
"The basis for removing the executive directors and managing directors was that their banks were in a grave situation," Sanusi told Reuters in an interview on the sidelines of a central bankers' conference in Democratic Republic of Congo.
"There were infractions. There were violations of the law. That was not the basis for removing them. The basis was that they were in grave situations," Sanusi said.
"Those actions were required to protect the system. It was my central responsibility to do that. Subsequently, we'll deal with the other issues and we'll bring them to court."
The regulator still has another 14 banks to audit in sub-Saharan Africa's second-biggest economy. But Sanusi said that from what he had seen so far, it "doesn't look likely" that any more chief executives would be fired.
The central bank on Wednesday published a list of more than 200 firms, individuals and state bodies it said were defaulting debtors of the five banks, sending a second shockwave through the Nigerian corporate establishment.
The names listed as directors and shareholders in some of the defaulting companies read like a Who's Who of Nigeria's business aristocracy, including the only two Nigerians on the latest Forbes billionaires list, Aliko Dangote and Femi Otedola.
The list itemised non-performing loans totalling 747 billion naira ($4.97 billion). Nigeria's anti-corruption police have given the identified defaulters a week to organise repayment or face arrest, prosecution and possible asset seizures.
Analysts have said the move by Sanusi, who took office just two months ago, could be the start of a long-overdue clean-up of corporate governance and banking regulation in Nigeria.
But his efforts could also be hamstrung by drawn-out wrangling among powerful corporate and political interests, particularly if bankers or tycoons decide to challenge the auditors' assertions in Nigeria's sluggish courts.
CHALLENGES TO REGULATOR'S AUDIT
Dangote Industries denied on Thursday that its founder, one of Nigeria's most powerful business figures and estimated by Forbes to be worth $2.5 billion, was a director or shareholder of Dansa Oil and Gas Limited, listed by the CBN as a defaulting customer of Intercontinental Bank.
It also said it was in dispute over charges relating to its own 2.5 billion naira debt to Oceanic Bank, listed by the CBN as non-performing. But it said the matter was very close to resolution.
"Personally I think it is not right to publish companies' names on the pages of the papers because there is what you call confidentiality between a client and a bank," Dangote told Reuters in a telephone interview.
"I hope we will see the end of this very soon," he said, adding that he did not plan to take any legal action.
Nigerian energy firm Oando UNIP.LG (OAOJ.J) has also denied holding a non-performing loan while This Day newspaper said Intercontinental's new management had declared a 16 billion naira loan to United Alliance Company performing, contrary to the central bank's assessment.
But Farida Waziri, head of the Economic and Financial Crimes Commission, Nigeria's anti-corruption police, was not impressed.
"We will not take any dispute on figures as an excuse from anybody ... If you claim to owe one kobo, bring that first, then we can all sit down and reconcile the difference," she said.
"Otherwise, we will do exactly what we have promised to do; that is arrest, prosecution and confiscation of their assets. I need the cooperation of the concerned persons, not excuses."
One of the biggest debtors to Union Bank and Intercontinental Bank was conglomerate Transcorp TCNP.LG, of which Ndi Okereke-Onyiuke -- the director-general of the stock exchange -- is the chairman.
The Securities and Exchange Commission on Thursday gave Okereke-Onyiuke seven days to explain herself. It did not specify what sanctions it might take but has the power to suspend her from the stock exchange.
The anti-corruption police have also been questioning the top management of the rescued banks.
Analysts say criminal charges could be brought if executives are found to have falsified accounts or breached share price manipulation rules by setting up subsidiaries as vehicles to trade their own stock and push the share price higher.
Local media have reported that one of the sacked chief executives, former Intercontinental boss Erastus Akingbola, has won a reprieve from a federal high court allowing him to challenge his removal by the central bank.
Akingbola could not be reached for comment.
(For more Reuters Africa coverage and to have your say on the top issues, visit: af.reuters.com/ )
(Writing by Nick Tattersall; Editing by Lin Noueihed and Andy Bruce)
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