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CBN Dep. Gov., Lemo, mentioned in N8.12b Petition

Category: Frauds & Scandals


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CBN Dep. Gov., Lemo, mentioned in N8.12b Petition

Additional details of the mess in Wema Bank surfaced at the weekend, with fingers of blame pointed at Central Bank of Nigeria (CBN) Deputy Governor (Financial Sector Surveillance), Tunde Lemo.

 

Lemo, Wema Managing Director between 2000 and 2003, allegedly piloted the bank to a N8.125 billion debt, as well as inflated its profit.

 

The allegations are contained in a petition the suspended Wema Managing Director, Adebisi Omoyeni, wrote to President Umaru Yar’Adua on January 21.

 

The CBN on January 23 appointed an acting Managing Director for Wema Bank after Omoyeni was asked to proceed on compulsory leave.

 

Omoyeni alleged in the petition that all the efforts of Lemo were geared towards \"killing and taking over the bank through his cronies.\"

 

Several documents, including cheques and details of non-performing loans and the beneficiaries, were attached to the petition.

 

It is alleged that Omoyeni was removed to pave the way for the sale of Wema to another bank through the acquisition of Odu’a Investment’s equity in the bank.

 

Odu’a’s equity has been slashed from 40 percent to 9.8 percent, in line with the CBN’s directive limiting state government’s interest in banks to 10 percent.

 

Omonyeni narrated in the petition that \"the board and management are disturbed and perturbed that Lemo is consistently and persistently using his position in the CBN to intimidate Wema Bank and undermine its progress.

 

\"Reports of some of his activities were lodged with the Presidency on three occasions between June and September 2006 and on each occasion, needless to say, he has refused to budge. Albeit, his ultimate motive is to cripple the bank in order to be able to sell the bank cheap to his cronies to cover up his past deeds.

 

\"One of such cronies is the First City Monument Bank (FCMB), which is interested in order to be able to convert Wema Bank’s branches and assets to its current CBN’s demand for massive national coverage.

 

\"The bank has no choice now other than to let you into a tip of the ice berg of problems created for the bank by Lemo.

 

\"As at the time he (Lemo) was leading the bank, he plunged (it) into a debt mess of N8.125 billion non-performing credit, but which was concealed by him through some nefarious methods and means, including but not limited to recourse to fictitious recovery from debtor customers.\"

 

Omoyeni alleged that Lemo granted a total 72 facilities valued at N19.708 billion during his tenure, including N4.979 billion to Suffolk Engineering, N4.109 billion (Odu’a Telecommunications), N2.004 billion (Frontage Communication), and N1.111 billion (Sirpi Alusteel Construction).

 

\"Two or three months before his exit as Managing Director Lemo approved staggering loan facilities of N4.8 billion to Sirpi Alusteel Construction and Suffolk Engineering and Construction Company, both companies owned by one Henry MacPepple. As at December 31, 2006, the outstanding on these facilities was N6.71 billion.

 

\"A most painful aspect of these transactions is that while the board of the bank directed that no money should be released to the companies until the perfection of some securities and domiciliation of contract proceeds in respect of the contract from Shell Petroleum Development Company to Wema Bank, the funds were released by Lemo without the customer meeting the conditions stipulated by the board.\"

 

Omoyeni mentioned Henry MacPepple as the Chairman of Fortune International Bank during the period, and insisted that the debt remained unpaid up till March 2007 when Wema got Suffolk Engineering to start liquidating its debt.

 

He noted that N600 million had been recovered from the debt, which has grown to over N7 billion.

 

Omoyeni alleged that Lemo beefed up the bank’s profit in the 2002/2003 financial year, from the real figure of N891 million to N3.1 billion.

 

\"The actual profit made by the bank was N891 million but what he (Lemo) declared as profit on paper was N3.1 billion. To cover up this farce, 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 (WEMASEC), and presenting them as if the debt-owing customers were repaying their debts to the bank through the instruments of other banks.

 

\"Through this means or method, each of the customer’s account would be credited before the regulatory authorities came for their inspection and reversed into debits immediately after inspection.\"

 

Copies of 12 cheques amounting to N755 million and three instruments of transfer of funds to WEMASEC were attached to the petition.

 

The cheques include those of African Express, dated April 24, 2003 (N80 million); Gateway Bank, dated April 23, 2003 (N75 million); Gateway Bank, dated April 25, 2003 (N200 million); Gulf Bank, dated April 30, 2003 (N20 million); Gulf Bank, dated April 30, 2003 (N5 million); and Gulf Bank, dated April 30, 2003 (N20 million).

 

Gulf, dated May 2, 2003 (N25 million); Gulf, dated May 2, 2003 (N25 million); Gulf, dated May 5, 2003 (N45 million); Gulf, dated May 5, 2003 (N70 million); and Gulf, dated May 5, 2003 (N100 million).

 

Omoyeni disclosed that there are plans by the CBN and the Nigeria Deposit Insurance Corporation (NDIC) to dissolve the board and management of Wema to allow the Odu’a’s shares to be sold to FCMB.

 

\"Lemo is working in tandem with the FCMB to acquire Odu’a Investment shares in Wema bank despite of the fact that the boards of both the bank and Odu’a Investment have resolved that the shares be sold in equal proportion to all the five member states that have interest in Odu’a.

 

\"We wish to draw (your) attention to a letter dated January 4, 2007 written by FCMB to Odu’a Investment making a proposal for the acquisition of the latter’s shares in Wema Bank. The letter was received by Odu’a on January 5, 2007 .

 

\"On the same January 5, 2007, Odu’a Investment also received from the NDIC a letter forwarding the report of the NDIC routine examination of Wema Bank to it ....

 

\"The NDIC report for which the present management team is being vilified covers substantially the terms of Lemo and others, and reflects only three months of the tenure of the present management team.\"

 

Sources said Yar’Adua has sent the petition to Lemo for comment, and directed the NDIC to investigate the allegations. - Independent



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