Why Bunmi Lawson Resigned On Principle As Interim MD of Fortis MFB; Going Concern Issues Remains

Proshare

Friday, August 17, 2018   09.14AM / WebTV News

 

Bunmi Lawson resigned her appointment two weeks ago as the interim Managing Director of Fortis Microfinance Bank Plc.

This information was revealed by the interim management committee of Fortis Microfinance Bank Plc only yesterday.

Recall that Bunmi Lawson was the recently retired and award winning Managing Director/CEO of ACCION Microfinance Bank Limited, that the CBN drafted to assume the MD function in March 2018 of the bank widely regarded as corporate governance challenged.

In a statement by its scribe, Mr Victor Emerson, the financial institution confirmed that the resignation took effect from Friday, August 3, 2018; even as it did not explain in the statement the reasons why Bunmi Lawson was quitting the position at the firm earlier than the planned six months of her intervention.

The company represented that “following the said resignation, it is expected that the Central Bank of Nigeria (CBN) will announce the appointment of a new Interim Managing Director in the future as the interim management committee continues its task in line with its terms of reference”.

Our internal analyst review and market intelligence reveals however that this was a decision that was inevitable given the history, reality, ethical and professional disposition of Bunmi Lawson to an otherwise well-kept secret about the internal dynamics, governance failure and systemic challenge Fortis MFB represented.

Proshare has for some time tracked the damage that has been done to the institution over the years leading up to and including the action taken by the Nigerian Stock Exchange (NSE) to suspend trading in the shares of the company; an obvious indictment of the Central Bank of Nigeria (CBN) handling of an obvious governance breakdown and internal breakdown of management controls leading to the potential and existential loss of international creditors funds as well as local depositors funds.

Why and how the CBN sustained the institution as well as a few others must now be an issue for analysts and investors to ask questions about from the CBN.

 

Proshare had withheld commentary on the status and financial condition of Fortis MFB in the hope that Bunmi Lawson’s appointment might signify a means-tested approach by the CBN to contain the over N15bn losses that exist in the books.

Bunmi’s exit therefore will signify for investors and depositors the signal needed to conclude that the going-concern status and survival of the entity is impaired.

A swift acting CBN had more if not, the information available to proshare and ought to have acted more decisively before the appointment of an interim MD/CEO and indeed, subsequently after.

The exit of Bunmi Lawson, the industry benchmark on integrity and value-creation will signify that the issues affecting Fortis MFB and other MFB’s in various degrees of concerns are far from a near resolution and begs the question of what is contained in the financial systems viability reports for this unique sector of the financial survives community.

We recall that the action taken against Fortis MFB by the NSE was not the trigger but a response to a break-down in the service value proposition and a cycle of consistent breach of practice, process and performance by the previous management that warranted a revocation of the license within the interpretation of the laws and to safeguard further losses which; we cannot now ascertain has not taken place in the absence of publicly available financials.

More importantly, we begin to see a pattern emerging of firms taken over by the CBN who do not or are not compelled to meet the minimum standards of producing and making publicly available financial and qualitative reports of stewardship on activities whilst maintain their operational license(s).

It is noteworthy that in February 2018, the bank represented that it was negotiating with its foreign lenders to grant it a much needed respite by restructuring its existing facilities. It went on further to state that; with the approval and guidance of the CBN, it was also engaging in a far-reaching house cleaning exercise which at the end will culminate in the emergence of a leaner, healthier bank set apart by a renewed emphasis on professionalism and adherence to international best ethical standards.

There has been no update, communication or briefing on this crucial aspect to date.

The microfinance bank for all intents and purposes, has been (and is) currently operating with a going concern issue hanging over  it like some others known to the CBN but which has not been disclosed to the depositing and investing public.

 


Proshare Nigeria Pvt. Ltd.

 

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