News headlines in Nigeria are awashed with details of the Economic and Financial Crimes Commission, EFCC arresting the group managing director of Fidelity Bank PLC.
While details of his arrests are still sketchy, few facts have emerged. The EFCC has confirmed his arrest and questioning over his involvement in the laundering of about USD 150 million he and his other top executives received from Ms. Diezani Allison-Madueke, a former minister of state for petroleum resources.
Diezani is currently in the UK facing money laundering charges by the Special Crimes unit.
While the EFCC said he and other officials of the bank are cooperating with with them, Fidelity Bank has only promised that it will issue a statement as soon as possible.
However, the implication of this event pose an internal risk for Fidelity Bank, it’s customers and shareholders. At large, the banking system itself will also have its fair share in the consequences that might arise should in case allegations are proved to be true.
Apart from the possiblity of the CEO facing criminal charges, Fidelity Bank might also be charged for criminal conspiracy in the case. Banks are bound by the CBN’s anti-money laundering rules to report all deposits in the excess of NGN 1 million and above. Allegations pointing to the fact that the CEO did collect huge sums in cash contravenes the law.
If the said amount actually belonged to the government, Fidelity Bank will have to return it with interest and huge fines.
This would erode its cash deposits and disrupt its balance sheets. There is also a possibility of this consequence harming other banks linked with Fidelity Bank.
While the investigation is ongoing, fresh facts will emerge. It is unclear how Fidelity Bank’s board and its shareholders will react to this development.