September 04, 2008 2150 VIEWS

There is a lot that has been said and written about Wema Bank Plc saga and the persons who have held the position of GMD/CEO till date. Amidst the fact, myth and realities making the rounds, the Adebisi Omoyeni episode has had a more profound effect on the bank, industry and public at large.


The accusations, counter accusations, court suits, and media communications and petitions have exposed the underbelly of the corporate governance regime in a bank that was set up to define the best of values the western states making up the leadership had to offer.


The level of corporate politics and the limitations of our compliance/enforcement functions has been the defining fall-out, much less the personalities involved.


Far more important however has been the limited role minority investors have in such issues and the role of AGM’s.


Whilst, Wema Bank Plc had some very unique challenges, it must be said that this was the case with others in the sector who were equally involved in the pre and post consolidation issues that defined the banks that existed today.


To use these challenges as an excuse for a failure of leadership is simply turning logic on its head. To even go far as saying that CBN made exceptions is to challenge the very notion that there exists a level playing field.


We must get to a stage in the process and lofty objective of turning Nigeria into a financial hub of excellence where we say, enough is enough.


There has to be some basic and commonly understood tenets and practice guiding conduct and administration of rules. The Adebisi Omoyeni episode up till this evening thus raises some questions deserving of consideration:


  1. When CBN asked him to resume on September 1, 2008 – what did that say of the investigations conducted by its supervision unit or that of NDIC?
  2. Given that a model was once deployed to mitigate board squabbles in another bank dealing with post-consolidation challenges, why was a decision not made early on to address first, the board composition  who would then be in a position to deal with the MD/CEO challenge in consonance with the shareholders and the regulator?
  3. The ‘novel’ agreement through an MoU represents a new layer of conflict resolution not defined in the BOFID, so what does this mean? Does it represent another mechanism for the regulator?
  4. What happened to the issues related to ‘kiting’; a subject of supervisory report for two consecutive years prior to the issues blowing open?
  5. Has the subject of an eroded shareholders fund as identified in the NDIC report been resolved? If yes, what is the current shareholders fund of Wema Bank Plc?
  6. When will the firm present results to the market assuming it has continued to meet its obligations of presenting monthly and quarterly returns to the CBN?
  7. When should the market expect the suspension of its stock to be lifted and if that will happen, how will it prevent a massive dump of the shares to the detriment of the bank?


The Wema Bank Plc saga should require an independent review to help stakeholders understand the very challenge of investing in a bank or business of such ‘complex ownership’ structure.


The bank, we believe is blessed with hard working and committed employees, responsible investors and a deep base of loyal customers which sadly have not featured in the thinking of the principal actors in the impasse. They have chosen not to subjugate their self interest to the vision and larger goals of the enterprise.


From our standpoint and the information available to us, we respectfully conclude that with a more value-based inclination, the issues could and should have been better handled by those concerned, especially the regulators, SRO and Government.


Take the issue of the purported involvement of the Deputy Director of Banking Supervision at CBN, Mr. (Reverend) Tunde Lemo. After his ‘leave of absence’ at the height of the public exchange of sensitive internal issues; he resumed without much clarification on his role which has attracted genuine concern as to the veracity of the allegations made by Adebisi Omoyeni. If CBN thus allowed Mr. Omoyeni to come back, was it saying that his complaints against Tunde Lemo had a modicum of truth and merit? If not, why was he re-instated? To do so would have ridiculed the office of the function designed to determine compliance in the banking sector.


If on the other hand, Mr. Omoyeni was correct; to retain Rev. Tunde Lemo without clarifying what became of investigations into his role in the matter which, extended to its logical conclusions, bothers on abuse of process and position, is a bad precedence.


Quite Frankly, we have held a vigil on developments in the bank since the matter broke, painstakingly gathering data and information on developments; and had hoped that with CBN having much more data to guide its decision making, the developments of the last four (4) days should never have occurred.


The ‘drama’ of the last four days has been disheartening to say the least. Much more was expected from the regulators who had the leverage to take decisive steps that would have sent all the right signals to the investing and consuming public (recall that the issues dates back to the consolidation period and the decision by CBN to allow Wema Bank not to publish its financial statements based on an application the bank made as regards certain developments). To allow it to degenerate into a ‘street fight’ with parties bringing different detachments of the Nigerian Police to gain entrance or force an ejection; is less than responsible.


The ‘village square’ show might appear laughable but it is painfully serious enough an indictment of a failed policy of enforcement and protection of the Investor’s rights and market safety; which ironically appears to be their ultimate objective.


The means of achieving a ‘politically sound settlement’ can be rough, we acknowledge; but can CBN claim ignorance of the fact that under its watch, Wema Bank Plc largely operated for a long period with a Group Managing Director and a single Executive Director?


If nothing, on this point; the regulatory body must reflect on a lost opportunity to define leadership standards required and deemed necessary for a post-consolidation bank. Historically, it is able to conclude that such problems don’t just occur in a single day r based on a single event. It would have been brewing up and it was left to its own supervision unit to highlight and provide the early warning signal needed to take action to protect customers and investors alike.


In this case and based on the records and information available, the responsible units (CBN and NDIC) did their job. So who should have acted? The Board of Directors of Wema Bank Plc?


Here again, we must ask the same question – Given that it was a well known fact that the board could not be said to have been independent within the limited confines or restricted definition of uncompromised corporate governance. Examples of directors receiving facilities, the issue of the appointment of directors and the developments leading up to and during the last AGM flies in the face of the counter argument raised by a party in the case.


This however is no time to settle for blames.


We must go away today with the resolution that actions needed to ensure that Wema Bank Plc comes back to the market as a serious player cannot be a matter for political compromise. It must be based on sound principles as applicable to other banks as well and must reflect the best interpretation of the BOFID and regulatory/enforcement rules of the apex body.


We categorically state that we still have an implicit confidence in the ability of the Governor and Governing Board of the Central Bank of Nigeria to do the right thing.


Our primary desire and wish is simply for the current ‘musical chairs’ game to stop.


The song is well worn and it is time to take actions that should reverse the lapses of the past and set a precedent that would strengthen the financial market and restore market confidence in the whole process; especially at this time when morale in the capital market is still weak.


We call on the CBN to take all steps as deemed necessary to encourage the Board of Directors, as appointed by the shareholders and vetted by it; to take steps to put in place a leadership structure that is accountable to the board and responsive to the yearnings of the stakeholders – investors, employees and customers.


Enough of the gamesmanship!


BREAKING NEWS: CBN removes Omoyeni Again -

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