John Ikemefuna
26 October 2009
opinion
Abuja — In most cases where judgment has been arrived at in haste, it is not inconceivable that grave injustice has been dealt to some of the people involved. One of such people I believe would be Barth Ebong of Union Bank, a gentleman banker hitherto without blemish.
Schooled in the finest tradition of the profession, Barth Ebong rose through the ranks to become Group Managing Director. What is significant about his case however is that he was named GMD at a point when he should have been due for retirement. However, having been adjudged brilliant and mature in handling his various portfolios prior, and having communicated the right kind of vision for Union bank going forward that board and management could relate with, he was promoted GMD. And after a first two-year term which helped define a new direction for the bank, the Board deemed it fit to renew his mandate for another two year term, the calculation being that he could complete some of the landmark projects he had begun in his first tenure.
One of those projects which had an industry wide resonance was the reform agenda. This was essentially a programme designed to enable Union Bank meet and overtake other players in the industry. Being a man who had spent all his working life as a staff of Union Bank, Ebong had been witness to a steady erosion of the bank's human capital base. Staff were always quick to bite the bait offered by competition, reason being that Union Bank salary, to put it charitably, was not competitive. And so one of the first things Ebong did as GMD was to increase salaries across board.
This done, he turned his focus to increasing the capital base. Not known for following the conventional, the Ebong team, which had contracted Accenture as strategic consultants, decided to shop for reputable foreign banks that would partner Union Bank and give it leverage with respect to fresh funds and human resources. This move, from all available evidence, was botched by CBN under Soludo. For reasons only the CBN can explain, this move was not ratified, we hear, because the then governor didn't feel comfortable about foreign banks owning a good chunk of any Nigerian Bank.
But seeing how it was critical to recapitalise, (although it must be said, not out of any dreary sense of imminent danger, but rather in an effort to make the bank more competitive and put on an unassailable sound footing), the bank thought it wise to make overtures to Nigeria's capital market. Unfortunately, the meltdown had erased the capital market's potentials. Those who made the stiff-necked decision of going ahead are still ruing their mistake.
Why am I going through this rigmarole? To make the point that results-yielding effort was going on in Union bank at a time of global slowdown. The issue for Union Bank was not about good corporate governance, neither was it about questionable credit management. If allusions are made to these by some people, one must be quick to say that some of the issues in question were beyond the realistic range of Mr. Ebong's management team. One of those issues was the loan to Transcorp, a loan which by the way makes up more than one third of the entire loan portfolio credited to Union Bank, and the basis for which Barth Ebong was relieved of his job.
That loan, beyond being a nationalistic imperative, driven by the Obasanjo administration desire to see a Nigerian creation in the mould of the fabled Asian Tigers, the investment was a business decision arrived at after proper due diligence that indicated overwhelmingly that NITEL was a good investment in every material particular.
That the management of Transcorp has been unable to leverage on NITEL's sound fundamentals does not vitiate this conclusion as we find that up till today blue chips both from home and abroad are lining up to indicate their interest in the acquisition of NITEL - debts and all.
Although Transcorp reneged on its loan payment, is it not a noteworthy development that it paid a good chunk of it right after Sanusi's heavy-handed action? Now, tell me, if the CBN had been just a little patient while engaging the coercive collaboration of the EFCC to help recover some of these loans, would Ebong today be deemed deserving of being out in the cold? I dare say no. Because even as I write this piece, Transcorp has made a payment of N23billion to Union Bank.
That payment reduces the bank's exposure significantly. Now add to this the fact that for whatever reasons, the Bank's assets valuation is not on current market value basis. If that had been done, there would have been no justification for describing the bank's position as weak, I dare say.
All of these beg the question: was there something else at play beyond righting the wrongs? It's a question we must ask as Nigerians and as people who want a stronger financial sector. Why punish a management that from all indications was doing the needful, and that was forging ahead despite vehement opposition from inside and outside interests used to creaming off from the business-as-usual model? It's been about three months now since Mr. Ebong voluntarily submitted himself to the EFCC after his sack was announced. Since then, there have been sobering and earth-shaking revelations from a few of the other banks. We've heard about money laundering, unduly generous allowances extended to executive and non executive management, we've heard about private jets, in some instances more than one, we've also heard about fresh loan scams from some of the banks. What I find revealing is that so far, beyond the initial charge of weak liquidity position, nothing new has been unearthed with regards to Union Bank.
I am one of the many people who are not surprised at all. Barth Ebong had always comported himself professionally. His being at the helm at a time of such turbulence was only going to prove the sterner stuff of which he is made. Unfortunately, just at the time his effort was beginning to bear fruit, he was yanked off the job. Incidentally, this at the same time when authorities in other countries were infusing their financial sectors with fresh funds rather than rocking the boat.
They recognize that a weak liquidity position today is not necessarily a reflection of bad management or lack of direction, but rather a global recession that requires government's assistance. All that a bank like Union Bank required was a fresh infusion of funds, something which was not done until Barth Ebong was hounded out. Today, his reformation template still serves as the guidebook by which the Bank is run.
One hopes that Malam Sanusi's sense of fairness will occasion a review of this particular case so that justice would neither be delayed nor denied a true gentleman.
Ikemefuna is an Abuja-based architect
Be the first to Write a Comment!
Copyright © 2009 This Day. All rights reserved. Distributed by AllAfrica Global Media (allAfrica.com). To contact the copyright holder directly for corrections — or for permission to republish or make other authorized use of this material, click here.
AllAfrica aggregates and indexes content from over 125 African news organizations, plus more than 200 other sources, who are responsible for their own reporting and views. Articles and commentaries that identify allAfrica.com as the publisher are produced or commissioned by AllAfrica.
