The trial of a Managing Director of defunct Bank PHB, Francis Atuche, over alleged N125 billion fraud, on Tuesday continued before a Federal High Court in Lagos, with a second prosecution witness, Mrs Philipa Odesi, giving evidence.
Atuche was charged alongside a former Managing Director of Spring Bank Plc, Charles Ojo, on an amended 45 counts.
The defedants were arraigned before Justice Saliu Saidu on Feb. 20, 2014, before the judge was transferred out of the Lagos jurisdiction.
Following the transfer of Saidu, the case file was assigned to Justice Ayokunle Faji and the defendants were re-arraigned on Feb. 18, 2017.
Although, Justice Saidu was eventually returned to the Lagos division, the matter still continued before Faji.
The defedants pleaded not guilty to the charges on their re-arraignment, while the court allowed them to continue on the bail granted by Saidu.
When trial resumed on Tuesday, the second prosecution witness (Odesi) who worked as a staff of the defunct Bank PHB, gave evidence as to the procedure for disbursement of credit facilities.
Led in evidence by the prosecutor, Mr Kemi Pinhero (SAN), the witness told the court that the head of the Credit Admin of the bank, was also the head of the Management Credit Committee.
According to her, when approval of credit is given, the Credit Admin receives same and sends it to relevant officers of the bank, who then issue offer letters based on the terms recommended by the credit analysis.
The witness told the court that if the offers did not go back to the credit Admin, it meant the customer rejected the terms of the offer, but if accepted, it would be sent to the Credit Control, to meet the conditions precedent to draw down.
She told the court that if the credit sum was beyond the limit of approval of the Board Credit Committee (BCC), it would be referred to the Full Board for approval.
According to her, if the credit is approved by the BCC, offer letters are issued after it has gone through the circle of meeting the condition precedent to draw down (disbursement).
The witness, however, told the court that at this point, the offer could also be dropped, if the condition for the offer were not acceptable to the customer, in which case, it would not’t be sent to the BCC for approval.
The prosecutor then asked the witness what a credit appraisal memorandum meant, and she replied that it was a document containing the full proposal of credit as presented by a customer to the bank, requesting for credit.
“It also contains recommendations of the credit office as well as signatures of the relevant approving authorities,” she said
The prosecutor further asked the witness, “So the xredit appraisal memorandum contains proposal, recommendations and approval,”
The witness replied, “Yes”, adding that credit officers were expected to rely on information based on the document to check if the credit would meet the bank’s risk acceptance criteria.
Besides, she told the court that for control purposes, the officers would not interface with customers to avoid bias.
The prosecutor asked, “Will I be correct to say that it also contains analysis of the review of the credit office?”
The witness replied, “Yes”.
When asked where information concerning the customer would be kept, the witness replied, “The credit memorandum.”
On who presents the credit memorandum to credit officers, the witness told the court that it could come from all sections of the bank.
She added that the credit office interfaced with various sections.
She further explained that credits were sent to the Credit Analysis Unit.
According to her, the Credit Control Department ensured that the conditions precedent to draw down were met.
When asked why the approval or review of every credit was by the Credit Office, she replied that every bank had a risk acceptance criteria which might come in any form.
She also told the court that in Bank PHB credits were looked at objectively and without bias.
“Credit officers independently look at credit submitted to it based on information available, and where they feel it does not meet the bank’s risk acceptance criteria, they notify the bank,” she said.
On how important are the recommendations of credit officers, the witness said: “It is very important because, as credit officers, you are expected to analyse all the risks and provide mitigants to these risks.
“Where you are not in a position to provide mitigants, you are not expected to recommend,” she said.
Continuation of the trial will be on June 13.
The defedants were first arraigned in 2009 before Justice Akinjide Ajakaiye.
Ajakaiye had granted them bail in the sum of N50 million each with two sureties each in like sum.
They were later re-arraigned before Justice Binta Murtala-Nyako on Feb. 3, 2012, and subsequently, re-arraigned before Justice Rita Ofili-Ajumogobia on Jan. 16, 2013, following the transfer of Murtala Nyako.
Both judges had adopted the bail terms granted by Ajakaiye.
The EFCC on Feb. 20, 2014, re-arraigned the defendants before Justice Saliu Saidu, following a re-assignment of the case, and then re-arraigned them in 2017 before Faji.
According to the charge, the defedants allegedly granted credit facilities, manipulated shares and committed general banking fraud to the tune of N125 billion.
The alleged offences contravene the provisions of Sections 7(2) (b) of the Advanced Fee Fraud Act, 2004, and Sections 15(1) of the Failed Banks (Recovery of debts) and Financial Malpractices in Banks Act, 2004.
They also contravene the provisions of Section 516 of the Criminal Code Act, Cap C38, Laws of the Federation, 2004, as well as Section 14 (1) of the Money Laundering Prohibition Act, 200.
Edited by Ijeoma Popoola