Monday 28 January 2013

Illegal loans: CBN fines Access Bank, sacks Cosmos Maduka from board

By

Dr Cosmos Maduka
The Central Bank of Nigeria, CBN, at the weekend fined Access Bank Plc. over alleged serial violation of stipulated banking rules and regulations.
The bank was fined N3 million for going against stipulated guidelines for approving loans to certain customers in a way capable of undermining the interest of its shareholders.
CBN’s regulations disallows financial institutions from lending more than 10 per cent of its paid up capital to directors or their affiliate companies under any condition.
The apex bank’s decision may not be unconnected to the statement by the Managing Director, Capital Oil and Gas Limited, Ifeanyi Uba, that the Managing Director of Coscharis Group, Cosmos Maduka arranged a N34.4 billion from Access Bank to finance the importation of petroleum products into the country.
Ubah at several times alleged that the trio of Maduka, Access Bank Group Managing Director Aigboje Aig-Imoukhuede, and Finance Minister, Ngozi Okonkjo-Iweala, played politics with the process surrounding the loan facility to get him out of business.
The CBN said one of the bank’s non-executive directors, Maduka in conjunction with two other directors, Gbenga Oyebode and Tunde Folawiyo, approved illegal loans to companies which they had interest, and that for this reason, Maduka should be sacked from the board with immediate effect.
According to a statement by financial regulator, the trio contravened Section 20(1) of [PDF] Banks & Other Financial Institutions Act, BOFIA, 1991(as amended), by granting a N38.4 billion credit facilities to Westcom Group in excess of its single obligor’s limit of N36.4 billion.
“Contrary to the CBN circular No. BSD/9/2004 of 16th July, 2004, which stipulates that credits to directors and their related companies shall not exceed 10% of the paid-up capital without the CBN approval, the bank (Access) granted to its following directors; Mr. Gbenga Oyebode, Dr. Cosmos Maduka and Mr. Tunde Folawiyo, facilities in excess of ten percent of its paid-up capital without the necessary regulatory approval.”
“Consequently, penalties totaling N3,000,000.00 is imposed on your bank for the above infractions,” the statement said.
Meanwhile Access Bank has appointed a former Chief Executive Officer of the Nigerian Communications Commission (NCC), Dr Ernest Ndukwe to its Board as a non-Executive Director, replacing the sacked Maduka.
The appointment has been ratified by the Bank’s Board of Directors and the Central Bank of Nigeria (CBN).
A statement from the bank quoted the bank’s Chairman, Mr Gbenga Oyebode as saying “Access Bank is taking giant strides to increase shareholders value and we are quite delighted to have Dr Ndukwe on board. His exposure and experience will add impetus to our institutional aspiration of becoming Africa’s most respected bank.”
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