Zenith Bank scandal: N17 billion fraud uncovered

The Nigerian banking system is in grave danger, and everyone needs to be aware of this. In an egregious act of fraud and collusion, a Peoples Gazette exclusive report has revealed how Chinese expatriates Liu Yangxi and Ma Zhuang, along with Salawu Nasiru, the manager of the Lokoja branch of Zenith Bank, took advantage of Nigeria’s banking system to embezzle billions from two Nigerian ceramic companies.

This case highlights a serious problem: insiders at Zenith Bank’s cooperation in allowing foreigners to swindle the very organizations they are supposed to protect.

Carefully planned between November 2021 and August 2023, the fraudulent actions entailed acquiring suspicious loans totaling N17 billion under the names of NB Ceramic Limited and BN Ceramic Industry Limited without the management of the genuine companies’ awareness. This incident is a heinous act of economic sabotage, not just a financial disaster.

The plan of Salawu, Liu, and Ma was as cunning as it was intricate. Liu, a shareholder and director in the ceramic enterprises, fraudulently posed himself as the managing director by forging signatures. Despite the falsified signatures, they were able to obtain five loans with the assistance of Salawu, the manager of Zenith Bank. There was a lot of dishonesty and deception in every loan approval procedure. Salawu helped Liu and Ma falsify the signatures on important documents, such as the approving board decision and the Offer of Credit Facility. Liu controlled the companies that received the illicit loans, which were then laundered into Chinese accounts.

“The fraudulent actions of these individuals have not only jeopardized the financial stability of BN Ceramic Industry Limited and NB Ceramic Limited, but have also posed a significant threat to the Nigerian economy,” the appeal to the Department of State Services (DSS) states. This claim emphasizes how these fraudulent acts have a profound effect on the economy as a whole, not just on specific businesses.

Detail of the petition:

First Loan (N3 billion) – November 4, 2021: Liu and Salawu falsified signatures and pledged the assets of BN Ceramic Industry Limited and NB Ceramic Limited without authorization. The loan was disbursed, and N69.9 million was paid as a kickback to Salawu. The remaining funds were transferred to Liu’s controlled companies and laundered into Chinese accounts.

Second Loan (N6 billion) – August 30, 2022: Liu, using falsified documents, secured this loan under the pretext of financing a contract for the AKK Project. Again, the assets of the ceramic companies were used as collateral without proper authorization. The funds were diverted and laundered offshore.

Third Loan (N8 billion) – August 31, 2023: Liu secured this loan to allegedly finance an ethanol facility in Makurdi. The funds were disbursed to Wetech Industry Limited and subsequently laundered into Chinese accounts. The petition states that “Liu immediately transferred N6 billion to Pure Biotech Company Limited where the shared monies were converted into Chinese Yuan and transferred to their personal accounts”.

The petitions to the Department of State Services (DSS) and the Economic and Financial Crimes Commission (EFCC) by the victims are a desperate cry for justice and reform. It is imperative that the DSS and EFCC thoroughly investigate this case and bring the perpetrators to justice. Additionally, the Central Bank of Nigeria must view this as an opportunity to tighten regulations and enforce stringent oversight to prevent such occurrences in the future.

We must not allow our financial system to be exploited by corrupt insiders and foreign nationals. This case should serve as a wake-up call to overhaul our banking sector’s regulatory framework. It is crucial to hold those in positions of power accountable and ensure the sanctity of our financial institutions is preserved.

Nigeria’s economic future depends on our ability to safeguard our financial systems from fraud and corruption of this magnitude. We must demand transparency, integrity, and accountability from our banks and their officials. Neglecting these issues is a breach of the trust that millions of Nigerians place in these institutions every day.

This is not just a local issue but a national concern. As highlighted in the petition, “If such fraudulent activities are left unchecked, they could precipitate a financial crisis, undermining the trust and stability of the Nigerian banking system”. The authorities must act swiftly to restore faith in our financial institutions and ensure that such a scandal does not happen again.