20100813
reuters

LAGOS (Reuters) - The former head of Nigeria's Intercontinental Bank was formally charged on Friday with mismanagement which led to the near collapse of the lender in the run-up to a $4 billion sector-wide bailout.

Erastus Akingbola, along with the heads of four other banks, was sacked by the central bank a year ago but had to be charged with graft and money laundering in absentia after leaving for Britain, where he had remained until start of this month.

"He has been formally arraigned before the court today on a 22-count charge and he pleaded not guilty to all the counts," Akingbola's lawyer Felix Fagbohungbe told reporters outside the Lagos courthouse.

Fagbohungbe said a bail application had been filed but that the case had been adjourned until August 23 to allow time for the Economic and Financial Crimes Commission (EFCC), which brought the charges against Akingbola, to file a reply.

The central bank injected $4 billion into nine lenders including Intercontinental last year, saying reckless lending and inadequate risk management had left them so weakly capitalised they posed a systemic risk.

Half a dozen other directors of Intercontinental also stand accused of granting loans to companies in which they have interests, and of failing to ensure the bank met minimum capital adequacy and liquidity requirements.

Akingbola's accounts and assets totalling around 346 billion naira and $10 million have been frozen pending the final determination of the charges against him.

Akingbola has challenged the asset freeze in court and asked to be reinstated. His lawyers argued that Central Bank Governor Lamido Sanusi did not follow due process in removing him from his job.