The Federal Ministry of Justice on Wednesday arraigned a former Imperial Micro-Finance Bank Managing Director Chijioke Mbagwu for alleged fraud.
He pleaded not guilty to 14 counts of fraudulent diversion of funds and granting of unsecured loans before Justice Ayokunle Faji of the Federal High Court in Lagos.
According to the prosecution, the defendant, between 2007 and 2008, allegedly granted N25 million unsecured credit facility to Investment Micro-Finance Bank, formerly Nsulu Community Bank, which he allegedly owns.
He was accused of granting unsecured credit of N4.5 million to Investment Micro-Finance Bank.
The prosecution said he illegally acted as Managing Director of both Imperial Micro-Finance Bank and Chiik Finance and Securities, which is not a subsidiary of Imperial.
According to the Ministry, Mbagwu fraudulently obtained N29.5million from Imperial under the pretence that it was for the bank’s management.
He was alleged to have diverted the funds to Investment Micro-Finance Bank.
In count 12, the prosecution said he obtained N10million from Mega Equities Ltd under the pretence of helping it secure shares from Imperial but diverted it to Chiik Finance and Securities.
Mbagwu allegedly obtained N8.7million from Imperial and diverted it to Chiik Finance and Securities’s account, with intent to promote illegal banking activities.
The prosecution said the defendant, between 2007 and 2009, obtained a leasehold improvement of about N30.3million from Imperial and diverted it to personal use.
The alleged offence contravenes sections 1(a), 15, 16 and 19 of the Failed Banks (Recovery of Debts) and Financial Malpractices in Banks Act, Cap F2, Laws of the Federation, 2004.
Prosecuting counsel Mrs Ogochukwu Mba, a Senior State Counsel in the Federal Ministry of Justice, opposed Mbagwu’s bail application.
She said the defendant evaded arraignment on two occasions, claiming to be bereaved and sick without evidence.
But, Justice Faji held that there were no strong reasons to deny the defendant bail.
He granted Mbagwu bail for N7 million with two sureties, who must be Lagos residents, must depose to affidavit of means, and must deposit two passport photographs.
The judge directed the defendant to deposit his international passport, adding that he must not travel out without the court’s permission.
He permitted Mbagwu to remain on the administrative bail granted him by the Police but directed him to comply with the bail conditions within seven days or be remanded in prison.
Justice Faji adjourned until June 28.
