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WEMA crisis: Staff, shareholders kick against Omoyeni’s return

Posted by By SEUN ADESIDA on 2008/03/28 | Views: 2581 |

WEMA crisis: Staff, shareholders kick against Omoyeni’s return


Workers of the embattled WEMA Bank Nigeria Plc on Monday protested moves to return the former Managing Director, Mr Bisi Omoyeni, to his seat, saying it would be a throw back to an era of dismal corporate governance.

Workers of the embattled WEMA Bank Nigeria Plc on Monday protested moves to return the former Managing Director, Mr Bisi Omoyeni, to his seat, saying it would be a throw back to an era of dismal corporate governance.

The workers, who held a national congress at the corporate headquarters of the bank in Lagos said they were for the current efforts and process for revamping the bank, while denying the public impression that suggested they were backing the former MD who is currently on a forced leave.

The bank’s management has been taken over by the National Deposit Insurance Corporation (NDIC) and the Central Bank which are currently looking into its books after suspending the former bank boss over alleged atrocities.

At the congress, which drew delegates from across the nation, the staff who hold about 30 per cent shareholding of the bank, said they were satisfied with the current attempt to put the bank back on a good footing and would resist Omoyeni’s recall.

Speaking through the bank’s Manager, Special Credit Unit, Abdularasheed Akorede, the workers complained that over N3.18 billion staff pension contribution was unaccounted for under Omoyeni’s administration as only N228.86 million of the retirement benefits had been remitted to the five designated pension fund administrators out of a total pension contribution of N3.41 billion.

"This is apart from excess lending to Transcorp of N12.8 billion, which was beyond the bank’s single obligor limit," said Akorede who also accused the suspended MD of exposing the bank to another N8.9 billion in lending to WEMA Assets Management and N11.7 billion to Independent Securities Limited.
He stated further: "The report we got from Nigeria Deposit Insurance Corporation (NDIC) and Central Bank of Nigeria (CBN) revealed that he wrote-off non-performing insider related facilities without regulatory authority’s approval.

Because the board was already compromised, at a board meeting held Monday, January 22, 2007, the report of routine examination for the financial year ended 31st March 2006 was considered. As precarious as the report was, the chairman was mandated to take up observations made with appropriate authorities, thereafter, the board reviewed the allowances payable to non-executive directors and the GMD/ CEO and approved the upward review by between 50 per cent and 100 per cent, when in actual fact it was not supposed to exceed 25 per cent. This being so, Omoyeni’s salary shot up from N31million to N135 million per annum."

He said that the probe report contained some recommendations that the board and management should be sanctioned as appropriate, while Omoyeni was ordered to refund immediately the unjustifiable five-year up-front housing allowance of N450 million paid to him in March 2007, failing which the assistance of law enforcement agents should be sought to recover the same.

On a report that the presidency had asked the CBN to re-instate Omoyeni, he said: "It was all part of name dropping, last week Thursday there was meeting between President Umaru Musa Ya’Adura, Minister of Finance Shamsudeen Usman, the governor of Central Bank of Nigeria, Prof. Chukwuma Soludo and the Attorney General of the Federation Mr. Michael Andoaaka, and the managing director of NDIC Mr. Ganiyu Ogunleye. "There, the president told them that this is not a political problem and that NDIC and CBN who were saddled with the statutory duty to ensure that Nigerian banks are healthy, should go and resolve the matter according to financial regulation, and he denied ever having given any order that Omoyeni should be recalled to manage Wema Bank."

On the staff position on the recall of Omoyeni, Mr. Bayo Oyebamiji, the chairman of the bank’s chapter of National Union of Banks, Insurance and Financial Institutions Employees (NUBIFIE) said: "The staff have taken their position, the law must take its course. If Omoyeni is found to be guilty then he must face the consequence, he should stay out of WEMA Bank. That is the verdict of the staff and shareholders of the bank."
Akorede explained that the staff congress was a unique one because it involved members of top management and lower cadre, adding that the congress became necessary because issues of corporate governance were highlighted in the various recommendations of the regulatory authorities, which revealed that the bank was being run by a sole administrator.

"As staff and shareholders our concern is multifaceted, we are staff of this bank, we earn our living from this bank. We are shareholders of the bank; as it is now, more than 30 per cent of the shares of the bank belong to staff. So, as a block we are going to be seriously affected if anything bad happens to the bank. Odu’a Company still has 10 per cent in the bank, that is like over 40 per cent belonging to us, then the other shareholders outside are still our people and they are part of us." Akorede said.

On the shareholders support, he emphatically said, "Other shareholders know what is happening and they are in support of the action the staff are taking today. That is why we are happy about what the president said, that it is purely financial and not political and it would be handled as such. Since the representation at the congress is more than 30 per cent, this as well could be regarded as an undertaking by the shareholders of the bank."

On the future of the bank, he said, though the bank was ranked 24th now in the industry, "Yet we foresee a rosy future for Wema after this period. Already in the last two and a half months, things have started looking up, this is because a lot of people abandoned the bank because of the way the bank was run in the last two years. Since the change of management it has also reflected in our bottom line.

"Since the Acting Managing Director John Aboh came in, things are now being done properly at Wema, we have been rated by Augusto and Co, in February with a ‘B’ rating whereas we have not been rated by any organisation in the last three years. This is because we are doing business as it is supposed to be done now.

"Since Omoyeni came in, the regulatory authorities have conducted just two examinations of the bank’s books, on each instance, the recommendations were passed to the board but because the board was already compromised they could not do anything.

When Omoyeni was there we tell him the staff turnover is high, he says ‘let them go’, tell him, "the bank is losing customers," he says ‘let them go’, when we are losing staff and customers at the same time what would be left for you to manage? But when things are now getting to a head CBN had to intervene."

It will be recalled that it was insinuated in some quarters that Mr Tunde Lemo instigated the CBN and NDIC to start the on-going probe of WEMA Bank, an allegation which both regulatory authorities had denied.

Speaking on the issue, Akorede revealed: "When Mr. Tunde Lemo came in, corporate governance was the watchword at Wema Bank. There was this erroneous belief that Bisi Omoyeni came in immediately after Lemo, this we also want to clarify that between Omoyeni and Lemo there was a period of two and a half years in which Mr. Alade Adeleke came in as managing director, after him came Mr. Layi Afolabi who had a stint of about two to three weeks before Omoyeni became the managing director of the bank. So, Lemo never handed over to Omoyeni as being speculated in some quarters.

"If it was true that Lemo had bad debts before he left, the man that came in after him should have discovered the debts. Why is he (Omoyeni) raising the issue now instead of objectively responding to the issues raised by the regulatory agencies. When Adeleke left, he made no noise, when Afolabi left he made no noise, here comes Bisi Omoyeni who for the two years, he ran the bank, had no single profit for the financial year 2005 and 2006, the bank returned a loss of over N2 billion.
Omoyeni declared a profit of N2.5 billion, in 2006/2007 financial year but we carried forward over N4.5 billion in losses.

"But in the last two and a half months that he has been on compulsory leave, the bank has been making progress, the balance sheet is improving, the customer base is also looking up. The campaign of calumny in the media was sponsored by self serving people who want the public to believe that the staff are in support of corruption. We are telling the whole world that enough is enough, we are taking our destiny in our own hands, and we believe in what the CBN and NDIC are doing as regulatory authorities."

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