Ayodele Aminu
19 March 2008
Lagos — The Nigeria Deposit Insurance Corporation (NDIC) has dismissed all allegations levelled against the Central Bank of Nigeria (CBN) Deputy Governor, Financial Sector Surveillance, Mr. Babatunde Lemo, by the immediate past Managing Director of Wema Bank Plc, Mr. Bisi Omoyeni.
The dismissal of these allegations by the Corporation was contained in a letter addressed to President Umaru Musa Yar'Adua, which was exclusively obtained by THISDAY.
Omoyeni, who is currently on compulsory leave for denying bank examiners unfettered access to the books and records of Wema Bank, had petitioned Yar'Adua last January attaching several documents as evidence to show that Mr. Ganiyu Ogunleye, Managing Director of NDIC, its Director, Field Examinations Department, Mr. O.M. Sulaiman, and the CBN Deputy Governor were colluding "to kill Wema Bank".
Specifically, among other allegations levelled against Lemo, who was at the helms of affairs of the bank till 2003, was that he attempted to forcibly acquire the institution along with his cronies.
It was based on this petition that the president through his Secretary, Ambassador Baba Gana Kingibe, last month directed that the compulsory leave placed on Omoyeni be lifted.
He also directed that an independent panel of investigators be set up and that Lemo be asked to respond to the allegations against him "to enable the panel of investigators consider it alongside allegations against Mr. Omoyeni, including from the perspective of a possible insider abuse".
But the NDIC, in its response to the president's directive, categorically dismissed all the allegations levelled against Lemo, saying Omoyeni's petition was an attempt to confuse serious issues relating to the financial health and continued survival of Wema Bank.
Commenting on the alleged hostile bid to acquire Wema Bank by Lemo and his cronies, the NDIC specifically pointed accusing fingers at Omoyeni, saying he illegally organised a management buy-out of the bank.
To execute the plot, the Corporation said, "Mr. Omoyeni approved N3.9 billion loan to staff, and over N28 billion to the bank's subsidiaries mainly to purchase the bank's shares. Thus, as at 31st January, 2008, the subsidiaries of the bank held more than 1.879 billion shares of the bank. That was outside the 2.6 billion shares divested by Odua and another 700 million units that were sold directly by Mr. Omoyeni to his nominees and associates. Simply put, it was Mr. Omoyeni that determined who got what number of shares."
Besides, an aggrieved investor, Mrs. Josephine Kuteyi, who is also one of the key customers of the bank, petitioned the NDIC to, among others, complain that Omoyeni offered her 5 per cent or 444,396,079 units of the bank's shares for which she paid N1.625 billion to the bank on the 25th of February, 2007.
"To her consternation, no share certificate was issued to her. She was later told, about December 2007, that she was allotted only 37.5 million units instead of the 444,396,079 shares that she paid for. She also claimed that she has not been paid the balance of her deposit for shares. The forgoing shows that Mr. Omoyeni was the dealer that sold all the divested Odua shares in Wema Bank to his nominees. He would have escaped with all the illicit deals, if the bank had gone to the market to raise fresh funds and if there had been no regulatory intervention," the NDIC said.
On the claim that Lemo ran the bank aground during his tenure as the MD/CEO of Wema Bank, the NDIC noted that since Omoyeni had been an Executive Director since 1999, he must have been privy to all decisions taken by the various boards and managements of the bank during the period in question.
"He (Omoyeni) should not now claim innocence for any error, commission or omission. Indeed, he was at the board meetings in which Suffolk (one of the companies in which Omoyeni alleged Lemo granted non-performing loans to) and related loans that he now blames Mr. Lemo for were approved unanimously. Besides, our review of the loans to Suffolk Engineering revealed that they were in the performing mode when Mr. Lemo left the bank.
"From Mr. Omoyeni's letter, one could easily be deceived into thinking that Mr. Tunde Lemo was his immediate predecessor in office. He had underplayed the fact that after Lemo left office, Alhaji Musiliu Adeleke became the MD/CEO of the bank and that he was at the helms for almost two years with himself (Omoyeni) retaining his seat as Executive Director," the Corporation explained.
On the issue of fictitious debt recovery placed at the doorstep of Lemo, who had left the bank in January 2004, the NDIC noted that the latter could not have perpetrated the act because "the NDIC had during the 2006 routine examination of the bank reported that Wema Bank purchased a number of cheques from other banks between 13th July and 7th August, 2006, to window dress some loans and make them look like they are performing."
Specifically, it said: "It was the management led by Mr. Omoyeni, which submitted the said cheques totalling N1.93 billion as evidence of debt recovery."
Besides, the report also noted that NDIC's "2006 examination revealed that the bank, under Mr. Omoyeni, delisted some government related loans to evade provisioning while non-performing loans amounting to N4.071 billion were reclassified and booked as other assets."
On the alleged connivance of NDIC MD and its Field Examiner in the plot "to kill Wema Bank", the report noted that it was because Omoyeni failed to prevail on the management of NDIC to call off the scheduled statutory examination of Wema Bank that he resorted to a campaign of denigration in the news media to malign the Corporation.
"The report of 2007 routine examination concluded that the bank was in dire need of restoration. Governance process of the bank continued to exhibit unacceptable practices. Such practices, which relate to non-adherence to ethic and professionalism, non-adherence to due process and persistent violation of banking rules and regulations required urgent intervention of the owners and supervisory authorities to protect depositors, investors and the financial system," the report stressed.
It listed some of the objectionable practices of the Wema Bank board and management to include failure to supply information to examiners, self serving disposition of the board, which, approved in 2007 upward review of new allowances for non-executive directors in spite of after tax loss of N6.6 billion posted by the bank in 2006; approving the increase in the remuneration of Omoyeni from N31 million to N45 million as well as the purchase of a house worth N450 million for him in Ikoyi as official residence.
It listed others to include window dressing of financial statement; investment of N7.7 billion in Wema Bank Asset management with CBN approval; suppression of material information; manipulation of records; excessive lending without due process as well as use of the bank's funds to manipulate the price of Wema Bank's shares at the stock exchange amongst others.
Consequently, the NDIC said it was for reasons of transparency that an independent person, Mr. John Aboh of First Bank Plc, was asked to stand in as Acting MD/CEO.
"Indeed, that was done because of the fears expressed by Omoyemi when he was told that Mr. Nurudeen Fagbenro, Acting Executive Director, Wema Bank would act as MD/CEO in his absence. He openly referred to the MD as his enemy," the report said.
Meanwhile, the CBN has said that these developments do not in anyway affect the liquidity and operations of Wema Bank, reaffirming that the bank remains strong and resilient.
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