NAN report has it that Mbagwu is being prosecuted by the Federal Ministry of Justice on 14 counts of fraudulent diversion of funds and granting of unsecured credit facilities.
He, however, pleaded not guilty to the charge before Justice Ayokunle Faji.
After his plea, his counsel, Mrs S. Anoka, applied for his bail and prayed the court to grant him bail on the most liberal terms.
However, state counsel, Mrs Ogochukwu Mba, opposed the bail application, alleging that the defendant evaded arraignment on two occasions.
She also told the court that the defendant tried to feign absence, when required by the police.
In a short ruling, the court held that the defendant had shown reasons why he should be granted bail.
The court added that nothing was shown by prosecution to substantiate its opposition to bail.
Faji, consequently, granted the defendant bail in the sum of N7 million with two sureties in like sums.
Among other conditions, he held that the sureties must be resident in Lagos, show means of livelihood, depose to affidavit of means and deposit two passport photographs.
He added that the defendant must not travel without the court’s permission.
The judge also gave the defendant seven days to comply with the bail conditions.
He adjourned the case until June 28 for report of compliance, and ordered that in the meantime, the defendant should continue with the administrative bail granted.
According to the prosecution, the defendant committed the offences in 2007 and 2008, while serving as the Managing Director of Imperial Micro Finance Bank.
He was alleged to have granted N25 million unsecured credit facilities to Investment Micro Finance Bank, formerly called Nsulu Community Bank, which he allegedly owns.
In counts two to five, the defendant was also alleged to have granted unsecured credit of about N4.5 million to Investment Micro Finance Bank.
In count six, he was alleged to have acted as the Managing Director of Imperial Micro Finance Bank as well as that of Chiik Finance and Securities, said not to be a subsidiary of Imperial.
In counts seven to 11, the defendant was alleged to have fraudulently obtained about N29.5million from Imperial Micro Finance Bank in the guise that it was for management of the bank.
He was alleged to have diverted the said funds to Investment Micro Finance Bank.
In count 12, he was alleged to have obtained N10 million from Mega Equities Ltd. on the pretext of helping it to secure shares from Imperial, but diverted same to Chiik Finance and Securities.
In count 13, he was alleged to have fraudulently obtained a culmulative sum of N8.7 million from Imperial Micro Finance Bank and diverted same to the account of Chiik Finance and Securities, with intent to promote illegal banking activities.
Meanwhile, in count 14, the defendant was alleged to have, from 2007 to 2009, obtained a leasehold improvement of about N30.3 million from Imperial Micro Finance Bank and diverted same for personal use.
The alleged offences contravene the provisions of 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.