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More former Nigeria bank execs face charges after bailout

LAGOS (Reuters) - Nigeria’s anti-corruption police have accused two former Bank PHB directors of mismanaging depositors’ funds and frivolously granting credit in the latest trial of bank chiefs following a $4 billion bailout.

Former Bank PHB managing director Francis Atuche and one of his former executive directors, Charles Ojo, were accused in a Lagos court on Tuesday of granting a 450 billion naira credit facility without any collateral, the Economic and Financial Crimes Commission (EFCC) said in a statement.

“The credit facility was given frivolously without collateral and the two bank chiefs acted beyond their approval limits,” EFCC lawyer Kemi Phinherio told the court, according to the EFCC statement.

Atuche and Ojo were arraigned on a 26-count charge a week ago, accused by the EFCC of mismanaging depositors’ funds and abusing credit management rules. Both pleaded not guilty.

The two men are the latest former bank executives to face criminal charges after a bank bailout in which the central bank injected around 600 billion naira to rescue nine weakly capitalised institutions, including Bank PHB.

The regulator initially injected 400 billion naira into five banks on August 14 and sacked their senior management after the first round of an audit found lax governance had left them so weakly capitalised they posed a systemic risk.

The unprecedented move by Central Bank Governor Lamido Sanusi sent shockwaves through corporate Nigeria, felling some of the country’s best-known banking aristocrats.

The EFCC has prosecuted former chief executives and directors from those first five banks on 188 count charges ranging from recklessly granting loans to share price manipulation.

The central bank said on October 2 it would provide a further 200 billion naira in liquidity support to Bank PHB, Spring Bank , Equitorial Trust Bank and Wema Bank after judging them also to be in a grave liquidity crisis.

Atuche resigned on October 2, shortly before the central bank announced the results of the audit.

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