Nov. 4 (Bloomberg) -- Nigeria’s anti-corruption agency accused two former directors of Bank PHB Plc of granting a 450 billion-naira ($2.97 billion) credit facility to an unnamed borrower without collateral.

Francis Atuche, the former managing director of the bank, and Charles Ojo, an executive director, were arraigned on Oct. 28 and accused of mismanaging depositors’ funds and abusing credit-management rules, the Abuja-based Economic and Financial Crimes Commission said in an e-mailed statement. Both men have pleaded not guilty to the charges against them, it said.

Kemi Phinherio, the commission’s lawyer, told a Federal High Court hearing yesterday that the credit facility was given “frivolously without collateral and that the two bank chiefs acted beyond their approval limits,” it said.

Atuche is among eight chief executive officers of Nigerian banks dismissed earlier this year by the Central Bank of Nigeria whose move aimed to stabilize an industry reeling from bad debt. At the same time, the central bank injected 620 billion naira into 10 lenders to boost their capital and liquidity.

Nigeria’s banks may have as much as $10 billion of toxic assets, Eurasia Group, a New York-based research company, said in May. Two thirds of that bad debt is partly the result of at least 1 trillion naira of margin loans used to buy equities as they soared almost 13-fold since 2000, according to Bank of America Corp. The Nigerian Stock Exchange’s All-Share index fell 46 percent in 2008 and has lost 32 percent so far this year.

Atuche and Ojo are seeking bail. They will remain in the custody of the commission until the court judge, Justice Akinjide Ajakaiye, rules on their application on Nov. 9, it said yesterday.

To contact the reporter on this story: Paul Richardson in Johannesburg at pmrichardson@bloomberg.net.

Last Updated: November 4, 2009 01:38 EST