A former Managing Director of Imperial Microfinance Bank, Chijioke Mbagwu, was on Wednesday arraigned before the Federal High Court in Lagos for alleged fraud.
Mbagwu was arraigned before Justice Ayokunle Faji on 14 counts bordering on fraudulent diversion of funds and granting of unsecured loans.
According to the Federal Ministry of Justice, Mbagwu had between 2007 and 2008 allegedly granted N25m unsecured credit facility to Investment Microfinance Bank, formerly Nsulu Community Bank, which he allegedly owns.
The bank chief was also accused of granting unsecured credit of N4.5m to Investment Microfinance Bank.
The prosecution said he illegally acted as the managing director of both Imperial Microfinance Bank and Chiik Finance and Securities, which was not a subsidiary of Imperial.
The ministry also alleged that Mbagwu fraudulently obtained N29.5m from Imperial on the pretext that it was for the bank’s management, but allegedly diverted it to Investment MfB.
Mbagwu was also accused of allegedly obtaining N8.7m from Imperial, which he diverted to Chiik Finance and Securities’ account with the intention of promoting illegal banking activities.
The prosecution said the defendant, between 2007 and 2009, similarly obtained a leasehold improvement of about N30.3m from Imperial and diverted it to his personal use.
According to the prosecution, the offences contravene sections 1(a), 15, 16 and 19 of the Failed Banks (Recovery of Debts) and Financial Malpractices in Banks Act, Cap F2, Law of the Federation, 2004.
Opposing Mbagwu’s bail application, the prosecuting counsel, Ogochukwu Mba, stated that the defendant evaded arraignment on two occasions by claiming to be bereaved and sick without any evidence.
However, Justice Faji held that there were no strong reasons to deny him bail and thereafter granted him bail in the sum of N7m with two sureties.
He added that the sureties must be Lagos residents, who must depose to affidavits of means and also deposit two passport photographs each.
The judge directed the defendant to deposit his passport, adding that he must not travel abroad without the court’s permission.
Justice Faji adjourned the case till June 28.