Inflaming a Storm

Charles Soludo, Governor, Central Bank of Nigeria

The Central Bank of Nigeria (CBN) reinstates Wema Bank’s suspended Group Managing Director, Adebisi Omoyeni, amid opposition from some shareholders and staffers of the bank
By Udo Onyeka
Anger, sorrow and disappointment were visibly written on their faces as some of the staffers of Wema Bank displayed placards to protest the recall of the suspended Group Managing Director, Adebisi Omoyeni.
The protest against the decision of the regulatory authorities to allow Omoyeni return to the bank almost paralysed activities at the bank’s headquarter located on Marina Street, Lagos, last Monday, as some staffers of the bank as early as 7.00am barricaded the entire frontage of the bank to make sure that he did not enter.
However, Omoyeni resumed on Tuesday, September 2, 2008 with a contingent of over 40 policemen in tow, amid tight security.
The Source gathered that Omoyeni was unable to resume on Monday, September 1, 2008, after some of the staff who are loyal to him informed him of the workers' plan and so advised him to steer clear of the headquarters of the bank, at least on that day.
A source who spoke to The Source said that after Omoyeni got the situation report from the bank’s headquarters he, instead of heading to the office to resume duty, elected to go to the Lagos State Police Command Headquarters to seek their intervention.
Though the workers are still unhappy with Omoyeni’s return and has vowed to see that he leaves the bank in the near future, the intervention of the police has somewhat restored calm in the bank.
Meanwhile Omoyeni resumption of day has brought to an end series of activities and accusations that culminated in his compulsory suspension by the regulatory authorities on January 18, 2008.
To an outsider, this development, may be strange but to insiders, it is certainly not. Indeed, since his suspension, a lot has happened. Apart from polarising the bank staff and board, there have been numerous court cases instituted by the returnee chief executive against both the bank and the regulatory authorities.
The Source gathered that it was the series of litigations instituted by Omoyeni that posed obstacles to the desire of the CBN and other regulatory agencies to keep an embattled Omoyeni out of the bank permanently.
Investigations reveal that the CBN had systematically wanted to ease Omoyeni out of office, latest by December as some informed watchers are of the view that allowing the suspended managing director to return portends trouble for the bank
For instance, a faction of the bank’s staff known as “Concerned Staff of Wema Bank,” do not want Omoyeni back. At a press conference in July 2008, they called for the appointment of a substantive group managing director and chief executive of the bank.
Sensing that developments are tilting towards the return of the former MD, the concerned staff at the media briefing made a five-point declaration:
*That the presidency should not allow the issue to degenerate to a political issues but rather, it should be viewed with the economic seriousness it deserves so that it does not become a bad precedent in the financial industry.
*For the regulatory authorities and the presidency to pronounce with finality on the activities of the former group managing director, moreso when relevant reports of investigations have been finalised and submitted.
*That the Central Bank of Nigeria(CBN) should come to the aid of various stakeholders and approve the reconstitution of the board of the bank.
*Reiterated the need for the bank to have a substantive managing director appointed and ratified by the regulatory authorities.
They also called on the regulatory authorities to make public, the executive summary of the various reports prepared by regulatory authorities including the Independent Corrupt Practices and other related offences Commission (ICPC), the Economic and Financial Crimes commission (EFCC) and the Special Fraud Unit (SFU), which according to them, “takes care of the petitions written by Omoyeni against some individuals.”
Specifically, the group stated that without Omoyeni, the bank has made progress and so bringing him back under any guise they argued, “will be counter-productive to the banking industry in general and Wema Bank in particular.”
The group based its position on the fact that over the last six months, the bank has made remarkable progress with the secondment of John Aboh as acting GMD/CEO from First Bank Plc.
Investigations show that the CBN had perfected strategies of easing Omoyeni out of office without destroying the bank since the returnee MD has many supporters even among the staff of the bank.
In a statement dated August 20, 2008, the CBN stated that following a long and exhaustive meeting on Wema Bank by the CBN, NDIC, SEC, Odua Group Limited, Omoyeni and members of the board of directors of Wema Bank on the crisis that engulfed the bank and the way forward, the following conclusion and agreements on the road map for repositioning the bank were unanimously reached by all the parties. These include:
*All the five pending lawsuits relating to the present crisis in Wema Bank shall be withdrawn by the parties who initiated them on or before August 29, 2008 and copies of the notices of discontinuance served on CBN. The withdrawal shall be on the basis that each party undertakes to bear its own cost.
* The two nominees (non-executive directors) of Odua Group shall take their positions on the Board of Wema Bank.
According to the statement signed by Festus Odoko, head, Corporate Affairs, CBN, following the withdrawal of all the suits as mentioned above, CBN shall recall the managing director of Wema Bank, J. A. Omoyeni to duty by September 1, 2008.
The statement tagged “A Framework for the Resolution of the crisis in Wema Bank Plc,” added that three independent executive directors shall be appointed by the CBN from outside the South west geo-political zone to strengthen Wema Bank’s management team. The three independent executive directors shall serve for a period of 3-4 months.
Other resolutions of the CBN are that:
*The joint CBN/NDIC Special Examination Report on Wema Bank shall be laid before the board of Wema Bank for immediate consideration and the board’s response /comment shall be forwarded to the CBN no later than September 15, 2008.
*The board and management of Wema Bank shall, under the supervision of SEC, dispose of the ware- housed shares of Wema Bank (about 2.7 billion shares) in a transparent manner in order to improve Wema Bank’s liquidity position and correct the irregularities in the earlier sale of the shares.
The Source was told that the CBN strategy is following the disposal of the shares, a new list of shareholders will be compiled. A new board shall then be constituted based on the new shareholding structure, which shall in turn appoint a full set of management team.
The CBN stated that at the disposal of the warehoused shares as well as the constitution of a new team shall be concluded not later than October 31, 2008.
However, the question on the lips of many close watchers is whether the CBN framework will bring back peace in the crisis-ridden Wema Bank, bearing in mind that the faction not favourably disposed to Omoyeni's return had earlier warned against such move.
There is also the question of what will be the fate of those staffers opposed to Omoyeni. Keen watchers of the unfolding drama in Wema Bank are wondering whether the return of Omoyeni means that their days at the bank are numbered.
Last Wednesday, September 3, Omoyeni on his first full day at work, sent four management staff, including a director on indefinite suspection. The affected officers are Alhaji Nurudeen Fagbenro, executive director; Toye Adebayo, divisional head, retail banking; Samuel Adetayo, divisional head, IT and operations and Dele Oladu, head, human resources.
Observers of developments in the bank are also asking questions as to what has become of all the money that was mentioned at the onset of the crisis that the returne -MD allegedly mis-appropriated – one of which included collecting N450- million “housing grant” for five years upfront at N90 million per year .
Apart from that, industry watchers are raising questions concerning Tunde Lemo, Deputy Governor, (Financial Sector Surveillance) the CBN who Omoyeni implicated as having mismanaged Wema Bank funds to the tune of N18 billion when he was at the helms of affairs in the bank.
Lemo, Wema MD between 2000 and 2003, allegedly incured an N8.125 billion debt for the bank as well as allegedly inflated its profit. The allegations are contained in a petition the returnee MD sent to the presidency and the CBN in the heat of the crisis soon after he was suspended.
For now, it appears as though the CBN desirous to protect one of its own has taken recourse to a middle-of-the-road resolution of the crises: no victor, no vanquished.