Central Bank of Nigeria (CBN) has revoked the operating
licence of Express Discount Limited (EDL) due to the inability of its
shareholders to inject a minimum capital injection of N21 billion to enable the
company continue in business.
This is in pursuant to Section 2 paragraph (d) of the CBN Act,
2007 which confers on CBN the responsibility of promoting a sound financial
system in Nigeria.
Briefing newsmen in Abuja, Tokunboh Agnes Martins, director
banking supervision of the apex bank, also disclosed that the institution
maintained false and misleading books of account and had huge exposure to
margin loans.
Tracing the genesis of the financial crisis of the discount house,
Martins said that in 2006, the licence of some financial institutions, which
were shareholders of EDL, were revoked due to their inability to meet the
prescribed capital requirements.
Martins also said that EDL also engaged in activities in
contravention of discount house guidelines and indulged in distress borrowing
by sourcing funds at higher rates than it could earn by investing the funds.
This she said led to the removal of the MD/CEO in November
2011 and the board was directed by CBN to take necessary steps towards
ameliorating the situation, and this included the injection of fresh capital.
No comments:
Post a Comment