Wema Bank: Messy details of intrigues gone awry
By Our Reporters
Adebisi Omoyeni, MD, Wema Bank
It is no longer news that Adebisi Omoyeni, the
Group Managing Director of Wema Bank
Plc, has been sent on compulsory leave and John Aboh, an executive director at First Bank Plc, made the bank’s chief executive in an acting capacity.
What is news, at least to the majority of the bank’s stakeholders and interested members of the public alike, however, are the intrigues behind the whole episode, as asserted by the different ‘warring’ sides to the imbroglio.
When the story first broke that the erstwhile bank chief executive and former deputy governor of Ekiti State had been sent on compulsory leave for misconduct by the regulatory authorities, denial were the order of the day.
Probably as a means of shielding the institution from panic measures by both the banking public and setting shareholders, both the Central Bank of Nigeria, the apex regulatory organ in the banking industry and authorities at Wema Bank itself denied the report, insisting that Omoyeni had merely proceeded on a long-deserved rest, having not observed his annual leave for years.
The cat was, however, to be let out of the bag, in the first instance, by the Nigeria Deposit Insurance Corporation (NDIC), which revealed that Omoyeni had indeed been sent on compulsory leave to pave way for unhindered investigation of charges of professional misconduct against him.
And the charges: Omoyeni was said to have awarded himself an upfront housing loan of N450 million at N90 million per year for five years. For this reason, among others, he was sent on compulsory leave by the central bank and John Aboh drafted from First Bank to oversee matters at Wema Bank, a move some said had put paid to the possibility of Omoyeni ever returning to Wema as its group managing director.
But the intrigue was just beginning.
In a swift move, forces obviously loyal to Omoyeni, stressing that the man had done so much for the bank and was indeed not guilty of the offences for which he was ‘being accused and punished’, pointed out that the real reason for his removal was an attempt by high ranking forces within the apex bank itself to cover up their past misdeeds in Wema, impose more ‘malleable’ board and management and if need be, destroy the bank in the process.
According to a source close to the corridors of power at Wema, who actually presented daunting and copious documentary evidence, mostly marked confidential for many of his claims under conditions of anonymity, there was and indeed still is an attempt by high-ranking individuals to take over Wema Bank, if need be forcefully and “destroy the only legacy of Odu’a and the only surviving indigenously owned bank, in the south west, for selfish interests.”
According to the source, there has been a lot of misinformation, which needed to be corrected and matters set ‘as straight as they really are’.
With respect to the controversial N450 million ‘upfront’ housing loan, the source provided our reporters with minutes of an emergency meeting of the board of directors of the bank held on Tuesday, March 6, 2007 in which records were made that one Mr. Festus O. Ajani, chairman of the establishment committee in the bank had presented the committee’s recommendations to the board, as recorded in point number 8 of the minutes, to the effect that Omoyeni’s accommodation was not befitting for the chief executive of a bank such as Wema, especially considering its ‘anticipated position in the industry’.
The committee, according to the minutes, further noted that “the residential accommodation of the chief executive officers of banks are meeting/marketing places to meet top echelon in the society”, noting further that “a survey carried out on some banks of our peers in the industry shows that (a house was provided for each bank chief executive) at Ikoyi worth between N950 million and N1.5 billion (with the amount) to be written off in five years”.
Furthermore, according to the minutes, “after extensive discussions, the board noted the sincerity, loyalty and determination to reposition the bank by the GMD/CEO (i.e. Omoyeni) and consequently approved the purchase of a house in Ikoyi worth N450 million (with the amount) to be written off in five years at N90 million per year”.
If the foregoing is anything to go by, it would appear indeed that the N450 million provided for Omoyeni was indeed a loan approved by the board of Wema Bank, and not an upfront loan that was unilaterally obtained and approved by the embattled chief executive for himself.
Insisted our source, “Omoyeni never applied for nor did he initiate the loan, as a matter of fact, he initially resisted it but was prevailed upon to accept it in the larger interest of the bank’s image concerning a befitting residence for its chief executive.”
According to the source, Omoyeni’s trouble was precipitated by the fact that Tunde Lemo, a deputy governor at the central bank and former chief executive of Wema Bank, was bent on either taking over the board and management of the bank or destroying the institution in an attempt to cover up his misconducts while at the helm of affairs at the foremost indigenous financial institution.
Reaching into his arsenal, our source produced yet another document, this time a petition sent by the Alhaji Olapade Mohammed, Chairman of Wema Bank on January 22, 2207 to then President Olusegun Obasanjo and copied to the Deputy Governor, Operations at the apex bank chronicling the ‘misdeeds’ of Tunde Lemo, who had moved from Wema Bank to become Deputy Governor, Financial Surveillance at the apex bank.
According to the petition, “Tunde Lemo, contrary to expectations from him as someone who had worked at Wema Bank and risen to its helm, had consistently used his position at central bank to embarrass Wema Bank and undermine its progress.” The petition continued by asserting that most of the problems that Wema was facing then and for which its board and management were being quizzed by both CBN and NDIC, “were created and entrenched during the tenure of Tunde Lemo as its managing director.
Among the problems, according to the board’s petition, were that Lemo plunged the bank into a debt and mess of N8,125,011,003 non-performing credit, but which were concealed by him through some nefarious methods and means, including but not limited to fictitious recovery from debtor customers. “In the 2002/2003 financial year (when Lemo still held sway at the bank)”, continued the petition, “the actual profit made by the bank was a sum of N891 million but what was declared as profit on paper was N3.1 billion,” the petition asserted.
“In order to cover up, Tunde Lemo directed the purchase of cheques from other banks, using the funds of Wema Bank and some of its subsidiaries like Wema Securities and Finance Plc (WEMASEC) and presenting them as if the debt-owing customers were repaying their debts to Wema Bank through the instruments of other banks,” stated the documents, adding, “through this means, each of the customers’ accounts would be credited before the regulatory authorities came in for their inspection and reversed into debts immediately after inspection,” while attaching copies of 12 cheques from Gulf Bank, Gateway Bank, Afex Bank and Devcom Bank, totalling N755 million, together with copies of three instruments of transfer of funds to WEMASEC as per Lemo’s instruction.
However, counter-allegations and accusations by some members of staff of Wema Bank against Omoyeni, their erstwhile GMD, are indeed not few.
For one, while alleging that money has been sent into circulation to launder Omoyeni’s image and hide his ‘various misdeeds’ at the bank, they allege that he was secretive about the sale of the 30 per cent shareholding of Odu’a shares in Wema, insisting that he surreptitiously sold over 18.2 per cent of the shares to his ‘crony’, Jimoh Ibrahim & Co.
They equally accused Omoyeni of having increased his total remuneration from N31 million to N45 million and his housing allowance from N7 million to N90 million, in spite of the ‘stagnant position of the bank under his administration’, while other members of staff did not receive such ‘monumental’ increases in their allowances.
He is again accused of refusing to remit over N3.4 billion of the bank employees’ pension funds to the appropriate pension fund administrators and also of unilaterally granting a loan of over N4 billion to Jimoh Ibrahim before persuading the board to ratify the action. Another accusation this group of workers has against the GMD is that he single-handedly granted a sum of N12.8 billion to Transcorp Plc, which according to them, is well above the single obligor limit for the bank and of hiding relevant information from regulatory authorities. He is equally accused of favouritism and high-handedness in the affairs of the bank and of running a cult-like administration consisting of about six officers of the bank while ‘major management meetings never take place in his absence.’
Perhaps even of greater magnitude is the bank board’s accusation that shortly before his exit as managing director at the bank, Lemo approved “staggering loan facilities of N4.8 billion to one Sirpi Alusteel Construction Limited and another Suffolk Engineering and Construction Company, both owned by the same individual, Henry MacPepple (said to be Lemo’s friend), who had so far failed to pay up the loans and to whose companies Lemo had released further fund tranches against the decision of the board.
The guarantee obtained for these loans by Lemo, according to the Wema Bank board, were post-dated manager cheques from Fortune Bank Plc, a bank the Wema Bank board had earlier decided not to accept guarantees from due to what they considered its poor financial position at the time.
It was also alleged that shortly before leaving office at Wema, Lemo approved diverse loans and facilities to several customers in the sum of N8.2 billion, “one of which was to one Yesin International Oil & Gas, a Port Harcourt-based customer to whom a credit facility of N600 million lease and overdraft facility was granted without any board approval or collaterals.
The board states that these problems, which were created by Lemo, had so far been the albatross for Wema Bank, for which its erstwhile chief executive, Omoyeni, is now being unjustly punished as a most unwilling fall guy.
It is the contention of the board that the actions of the CBN deputy governor so far is a pointer to a man desperately trying to cover up his misdeeds by any means considered necessary.
One of such moves, the board asserts, was the one-time attempt by the Lemo-induced clique to buy into Wema Bank by first having NDIC declare the bank financially unhealthy as was contained in the latter’s letter dated January 5, 2007 and signed by its Director, Field Examination, O.M. Sulaimon, which was received at Wema Bank the same day.
And the board members were convinced there was only one motive – control of Wema Bank for the purpose of concealing past misdeed and further plundering the bank.
According to the Wema Bank board, the indirect move to buy controlling stakeholding into Wema by Lemo was resisted and Odu’a’s 30 per cent divestment in the bank channelled through a stock broking firm, which sold the shares to the five member states having interest in Odu’a, following the resolution of the bank’s board and the Odu’a Investment Company.
Maintaining that Lemo should be made to explain his activities as managing director of Wema Bank to the regulatory authorities, particularly CBN and NDIC such that it would be clear that it was he who “plunged the bank into an unnecessary quagmire,” the Wema Bank board insisted that Omoyeni should not be made to suffer for and/or carry the cross of the sinful.
Those opposed to Omoyeni however queried for instance, why Omoyeni keeps blaming his woes and those of Wema Bank on Tunde Lemo when his predecessor, Alhaji Alade Adeleke, never gave vent to such misgivings, asking, “why is Tunde Lemo the major defence for his misfortunes, was he not a director and party to the loan granted Alusteel and Suffolk engineering?” and asking why the president had not deemed it fit to respond to Omoyeni’s petition, if he actually had a good case. They claim that Omoyeni, on his assumption as GMD at the bank, deceived them all by playing a saint and accusing all the former managing directors of the bank of one misdeed or the other, while in actual fact, he perpetuated worse crimes at the bank. This same set of staff members assures that there is indeed no plan to take over or kill Wema Bank, as claimed by the Omoyeni faction but that what was playing out was rather an attempt by the regulatory authorities to ascertain the condition of things at the bank, which they say is normal for any publicly quoted company and nothing to shout blue murder about. They insist that many of the position documents presented by the pro-Omoyeni faction to back their arguments are really either backdated or bogus.
Contacted, Mr. Lemo refused to comment on the allegations, saying he will not join forces with his accusers.
When contacted, spokesperson for the CBN, Festus Odoko, swore there was no truth in all of the allegations of the Wema Bank board against its deputy governor, Tunde Lemo, insisting that the falsehood had been lingering on for a while.
On its part, the Nigerian Stock Exchange, through its Principal Manager, Corporate Affairs, Sola Oni, stated that the Exchange could not be expected to have a different stand on the issue from that of the Central Bank, which is the primary regulatory body in the banking industry.
Said he: “Whatever is happening at Wema Bank is receiving the attention of CBN, which should be adequate. The Nigerian Stock Exchange belongs to the financial regulatory society to which the central bank and NDIC also belong; so you do not expect us to have a different view from that of CBN, especially on the Wema Bank issue? Our primary concern is to protect the interest of investors and where we notice any antithetical development, we rise to the occasion.”
Yet the intrigues rage on even within the embattled bank, while its senior staff association (ASSBIFI) has declared its unflinching support for the erstwhile Omoyeni-led board and management. In a letter dated January 22, 2008, its junior counterpart, the National Union of Banks, Insurance and Financial Institutions Employees (NUBIFIE), in a letter written only three days after (i.e. January 25, 2008) have promised “unshaken support and loyalty to John Aboh and his management at the bank.”
It is pertinent to state that it behoves the regulatory authorities, particularly the central bank, to lead a proper investigation into all these allegations and counter-allegations, establish where the truth actually lies and take action to redress whatever misconduct that might have been perpetuated by any party to the imbroglio, if for nothing, then for the sake of due process and posterity.
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