No Respite for Bank PHB

Francis Atuche

Managing Director of Bank PHB, Cyril Chukwumah, is in the eye of the storm for, alleged mismanagement and financial misappropriation
By Bayo Amodu
Again, Bank PHB, one of the banks taken over by the Central Bank of Ni geria, CBN, last year
as a result of what the apex bank described as gross mismanagement and capital erosion on its part is in the news for yet unpalatable reasons. This time, the CBN appointed Managing Director (MD) of the bank, Cyril Chukwumah is in the eye of the storm
The Source learnt last week that some top management staff of the bank are angry with the way Chukwumah is handling the finances of the troubled financial Institution. They are already fuming over the allegation that the interim MD who replaced Francis Atuche, the immediate past MD allegedly demanded and collected $120,000 as a three-week annual leave allowance. The aggrieved officials of the bank are therefore, kicking that with this attitude, he has subverted the bank’s process and procedure.
The Source also learnt that the bank’s policy stipulates that officials at his level should have spent a minimum of six months before qualifying to go on leave, but in his own case, he has just spent three months, October to December, 2009, yet, he collected the full year leave allowance.
Chukwumah is also being accused of approving a N60 million mortgage loan for an unconfirmed Deputy General Manager as well as unilaterally changing the bank’s official car policy to his benefit. Insiders within the bank revealed that barely three weeks after assuming office, the new MD changed the banks policy on official vehicles for bank executives to monetisation. According to the officials, the monetisation arrangement means that the new CEO now collects two million naira monthly in lieu of official cars. The Source learnt that under normal banking rules, the value of the official cars should have been amortised over a period of four years.
On the controversial approval of the N60 million mortgage loan for an unconfirmed staff, according top some members of the bank’s management, the loan was given by Chukwumah as a “reward” for the key role he played in preparing the controversial third quarter report. The embattled CEO was said to have published the bank’s financial accounts without the approval of the board and in defiance of a court order restraining him from publishing the accounts.
The court order was pursuant to a suit brought by the bank’s vice-chairman, Pat Utomi who challenged the action on the grounds that the board had not approved the publication of the result. The Source learnt that the results were also not approved by the Nigeria Stock Exchange (NSE), which queried the bank and later imposed a huge fine for the infraction.
The embattled MD is also accused of withdrawing its (Bank PHB’s) application for a banking licence in the United Kingdom and is considering either selling the business as a going concern, open a representative office or close down and dispose of the assets of the proposed London branch. The Source learnt that Chukwumah appointed of himself and the bank’s Manager, International Banking, Valentine Ozigbo, as new directors of Bank PHB, (UK) Limited, the bank’s offshore subsidiary, which is yet to commence operations without the approval of the board. The MD has also allegedly approved the replacement of Utomi and Akin Kekere-Ekun as directors of the UK firm.
The Source also gathered that the top echelon of Bank PHB, worried by the apparent leak of developments in the bank to third parties, had barred staff of the bank from disclosing company information. According to insiders in the bank, all staff of the bank were forced to sign an “Information Confidentiality Letter of Undertaking,” in November 2009, which forbids any staff to disclosing information to an external from party, with corresponding severe sanctions to any staff who violates the directive.
However, the management of the bank has thrown more light on some financial allegations involving its new MD. In a six paragraph statement signed by the bank’s Divisional Executive, Marketing and Corporate Communications, Charles Odibo, Bank PHB explained that the $120,000 off-shore allowance collected by its chief executive for his vacation, was amortised over one year for the period October 2009 to September 2010.
Odibo explained, for instance, that the actual amount for overseas vacation for chief executives approved by the bank’s board as at April 30, 2008 was $450,000. But in line with the signs of the times, the new helmsman, he argued, had on assumption of duty on October 2,2009, observed that the figure was rather too high for an organisation going through trying times, and reviewed it downwards to a lower figure.
He said: “Our managing Director however reviewed the $450,000 vacation allowance downwards because he felt it was excessive, considering what other benchmarked banks are paying.”
On the issue of monetisation of status vehicles, the bank spokesman said the vehicles approved for the CEO includes two Land Cruiser jeeps and a home vehicle. Odibo stated that contrary to the existing policy, Chukwumah met only one Land Cruiser Jeep on ground, which he currently uses, but had to monetise the second and the home vehicle over a 48-month period, for which he received monthly amortisation of N392,688 as against the two million naira earlier reported in the media.
With regards to the N60 million mortgage for its new staff, the bank explained that the appointment of the office in question was actually confirmed on September 24, 2009 by the former managing director, Francis Atuche, pointing out that the facility was part of his recruitment commitment as separate from standard mortgage policy for staff as part of relocation package and hiring agreement with the former CEO, before Cyril Chukwmah came on board.
According to the bank’s management, the decision to shut down the proposed branch in the UK was reached as far back as August 2009 by the former CEO, in conjunction with the Central Bank of Nigeria and the UK’s Financial Services Authority (FSA), stressing that what the current management was doing, was the implementation of a process that had earlier been approved, while a request was sent to the board this month to ratify the management decisions.