By the time Sanusi Lamido Sanusi was appointed Governor of the Central Bank of Nigeria in August 2009, Union Bank of Nigeria Plc was a very financially sound institution. Its only problem had to do with in-fighting in the executive management team over the succession of the MD/CEO, Bartholomew Ebong whose tenure had been extended by the CBN. The only other problem the bank faced was business development; how to grow its business by re-engineering its processes and operational systems. In order to achieve that, the bank had retained the management company, Accenture, which embarked on a comprehensive review of the bank's processes.
But the CBN thought differently. In its statement announcing the sacking of the Executive Management, it alleged that “Union Bank of Nigeria Plc is in dire need of capital. The issued and paid up capital of the Union Bank of Nigeria Plc has been lost, Union Bank of Nigeria Plc has insufficient capital to cover its liabilities. It has therefore become imperative to take urgent action in order to arrest the deteriorating state of Union Bank of Nigeria Plc, save the bank from failure, and pave the way for the repositioning of the bank for its stability and growth.”
However, exhaustive investigations carried out by BH revealed that the CBN's position was not correct to say the least and was based on a patently false evaluation of the bank's financials. A former Director of the bank told BH that the apex bank (CBN) merely read the bank's financials in manner that would enable it arrive at a predetermined position, that is, “Union Bank of Nigeria Plc was financially distressed, so as to take it over.” Even the rescue team headed by Funke Osibodu which was sent to reposition the bank was surprised on arrival to discover that the situation was not as dire as the CBN had announced to the public. A member of the bank's staff union put it rather sarcastically, “When Funke and co arrived, instead of an empty treasury, they found a honey pot,” and alleged, “they have been licking it ever since!”
There were three clear items in which CBN's analysis were faulty.
(1) The bank had re-evaluated the assets of some of its prime real estate holdings. It is common knowledge within the banking industry that Union Bank of Nigeria Plc has some of the most valuable real estate holdings in the country. The only other bank that can compete with it is First Bank of Nigeria Plc. Unlike some of the new generation banks, which tend to lease many of its office buildings, Union Bank actually owns its buildings. The exercise produced an asset re-evaluation of N25 billion discounted at the BN rate of 45 per cent. The bank applied to the CBN for approval to incorporate this figure into its financial statement for the period ended 31st March, 2009. The request was delayed and finally on Thursday, August 1, 2009, it was declined. The CBN asked the bank to appeal its decision. BH can now confirm that the denial by the CBN was part of the grand scheme to undervalue the bank as grounds for its seizure. Subsequently, the CBN quietly approved the request which the Osibodu team incorporated in its March 2009 accounts.
(2) Union Bank of Nigeria Plc had extended a facility of N30 billion to Transcorp Nigeria Plc to finance its acquisition of NITEL Plc. When the Federal Government reversed the sale of NITEL Plc to Transcorp, BPE informed Union Bank that the Federal Government would issue bonds to the banks as repayment for the loans. When the joint CBN and NDIC team visited Union Bank on the stress test, they were shown the letter. But the CBN pointedly ignored it and treated the credit as a non-performing facility. That worsened the bank's loan - loss situation. Interestingly that facility has now been paid in full.
(3) Union Bank of Nigeria Plc had exited the Discount Window in May and was not exposed to the CBN on that transaction at all. BH's findings reveal that it resorted to the window in the first instance, not because of any systemic liquidity problems, but as an investment vehicle. The window offered attractive yields because of the low cost of funds. The treasury department of the bank traded with the funds it sourced from the window at very attractive margins. But the CBN claimed that by resorting to the window, the bank indicated its fragile liquidity problems. It is noteworthy that at the time of the CBN intervention, Union Bank's net exposure to the inter bank market was just about N50 billion. When CBN intervened, it injected N120 billion. Sources within the bank told BH that “we had no need for the inflow at all.” To prove that, the bank merely invested the bulk of it in treasury bills. It was already liquid enough to meet its operational needs. The truth really, was that Union Bank of Nigeria Plc was actually awash in cash. The new management team was reportedly pleasantly surprised to make that discovery. “So they settled down to dealing with the money!” a source in the bank alleged.
On October 7, 2009, the Board Establishment Committee of Union Bank Plc met at the boardroom, Stallion Plaza at 36, Marina Street, Lagos. The meeting started at 11.00a.m. Present were; M. Ahmed; O.I. Osibodu, GMD/CE; A.M. Adeosun; P. Ikeazor; I.A Kwargana, F.B.O Odimegwu; O. Okoloko; O. Olusanya; F.A. Shonubi, and C.P. Udofot. In attendance was Mrs. E.I. Odikanekwu (Mrs.), the secretary of the board. Many important issues were listed on the agenda including outsourcing of non-utility staff functions, staff appointments, organizational revitalization, revised staff loan categorization and interest rates, etc. However, the most interesting item, at least, to the executive directors, was item 11, remuneration for GMD/CE and Executive Directors. At that point the Executive Directors excused themselves from the meeting to enable the other directors discuss their remunerations. Mrs. Funke Osibodu, GMD/CE informed the members that “even though the CBN had directed that the new Executive Directors should be entitled to the compensation of the exited Executive Directors, her team was already earning far higher than what was being offered.
Ordinarily, there should have been no discussions on the issue, given the CBN directive that was crystal clear. But the Osibodu executive management team was determined to enjoy the largesse it had discovered at Stallion House. One of the non-Executive Directors who was present BH was reliably informed, opposed the GMD's proposal to pay her team more than what the CBN had prescribed. The sourced revealed: “But Funke told him that she would put the issue to vote. She did and of course, our pliant board voted to approve her proposal!” When the meeting rose by 3p.m., they had agreed to recommend to the board thus:
1) The annual payment to the Executive Directors of the bulk sum of N68 million and the details should be worked out by the management in terms of basic salary and allowances.
2) That the chairman of the board and the chairman of the Board Establishment and Services Committee should work together to fix the GMD/CE's total emolument.
The meeting also agreed to purchase “the new available 'S' and 'E' series models respectively of Mercedes Benz cars for the Group Managing Director/Chief Executive and Executive Directors. The meeting also agreed to pay members of the Executive Management team three years Housing Allowance in lieu of accommodation where needed to the Group MD/CE and the Executive Directors.”
On May 25, 2010, the Executive Director, Operations, IT and Services, originated a memo to the Group Managing Director, 'RE: Payment of Outstanding House Allowance.' “The board at one of its sittings approved that Executives could collect their Housing Allowances for three years in advance… It is now considered an auspicious time to pay the advance on our housing allowances.” The ED proceeded to seek for permission to pay; F. Osibodu - N26,765,753.42, Kunle Adeosun - N30 million, Philip Ikeazor - N30 million, Ibrahim Kwargana - N22,438,356.16, Ade Shorubi - N21,986,301.37, thereby making a total of N131,190,410.95. The GMD/CE promptly approved the memo the very next day, May 26, 2010.
It is interesting to note that the Osibodu management team was contracted for a two year term by the CBN. A member of the Senior Staff Union who spoke to BH wondered, “Why would people on a two-year contract collect housing allowances for three years?” That question and similar others are being asked all over the various branches of the bank in the country. An employee in Kano main branch sent an SMS to BH last week, wondering how a rescue management team should earn double and even triple the salary of the previous management. “Ebong was earning about N36 million per annum. His ED's earned about N26 million at a time when the bank was buoyant. Now, they say we are broke, and yet the new people are earning such huge sums. So what would they have earned if we were not broke?” he queried.
However, it is not the executive management team alone that is enjoying the good times. Other members of the board have also been living it up. On August 19, 2010, Mr. Somuyiwa A. Sorubi, the acting Secretary wrote a memo to the GMD/CE: Re: Payment of Benefits of Retired Directors. In the memo, he sought for approval to pay various sums of money in various currencies, totaling N157,381,408.02, US $75,600.00 and £13,250 to the outgoing directors: Prof. M.G. Yakubu, Engr. I.A. Gobir and Mr. O. Olusanya. By August 20, 2010, the GMD approved the memo. In what has turned out to be a major scandal, the three retired directors whose retirements have taken effect, are still on the board of the bank. In an extra-ordinary development which has no precedent in the bank's history, the GMD took the issue of their retirement to the bank's Annual General Meeting which took place in Maiduguri last year and got it to approve their continued stay on the board until the bank is fully recapitalized. However, BH has learnt that the issue was never agreed on by the board to be included in the agenda of the AGM. Sources close to the board told BH that when she was confronted by some aggrieved board members, she apologized and alleged that it was the mistake of the company secretary to have put the issue on the agenda in the first place. Interestingly though, she has continued to allow the status quo to prevail with the retired directors still on the board of Union Bank Plc. Inside sources in the bank told BH that “it is a deliberate ploy by Mrs. Osibodu, who is apprehensive that their exit would facilitate the emergence of new members on the board who will not be amenable to her strategies. The feeling is permissive in the bank, especially among the rank and file that the GMD/CE is interested in acquiring the bank for herself. Whereas BH could not corroborate this view, it is strongly held by many especially members of the union. According to them, “it is this ulterior motive of the GMD/CE that is at the core of the problems of the bank and informs the numerous antics of the GMD, especially her insistence of vitiating the value of the bank to enable both her and her cronies buy it cheap”, a union leader told BH.
On June 10, the ED operations, IT and Services, wrote to the GMD requesting for his approval to pay education and furniture allowances to members of the Executive management. The amount he requested for was N68,286,301.37 which was the amount outstanding from April 2010 to September 2010. The ED stated that “the payments had been deliberately delayed by Executive Management until it was clear that the bank was on the path of recovery.” By implication, he believed that the Bank was now on a path of recovery! Six days later, precisely on the 16th, the GMD approved the payments, thus confirming that the Bank which the CBN had claimed was distressed was now fully on the path of recovery, barely one year later. The question now agitating many staffers of the bank and other industry observers is, “if the bank is on the path of recovery to warrant such huge emoluments by its management team, then why is the CBN still classifying it as distressed and insisting on selling it? As a union official asked BH, “then why not allow it to continue on this path of recovery?”
On 23rd August, Mr. J.O. Okanlawon, Head, Protocols, wrote to the DGM, Foreign Operations, seeking approval to pay retirement benefits to Prof. M.G. Yakubu $28,000 and £5,250; Engr. I.A. Gobir $23,800 and £4,000; Mr. O. Olusanya $23,800 and £4,000 respectively. The approval was granted the next day.
On May 25, the Head, Procurement Services originated a memo to the GMD requesting for approval of N58,080,000 to purchase status cars; M/Benz E350, Land Cruiser LC 200 VX V8 8-S ATLS vehicles for four members of the Executive management group including Mr. Philip Ikeazor, Mr. Kunle Adeosun, Mr. Ibrahim Kwargana and Mr. Ade Shonubi. The first set of the same cars had earlier been allocated to the officers involved. The total cost of status cars allocated to the four members was N116 million approximately. If you include the cost of the cars bought for the GMD, the total amount would be N144,173,400 only!
The total salaries and emoluments of the GMD is shrouded in secrecy. But given the princely sum of N68 million which the ED's earn, many people in the bank believe that it would be in the neighourhood of N100 million. However, sources in the bank said that her real jackpot is in estacode and other travelling allowances. “It is in travelling that she makes her kill!”a union member told BH. Sources within the bank told BH that she travels often, both locally and internationally.
Another issue worrying Union Bank stakeholders is the $13 million dollars of the bank which the previous management had invested in the subsidiary of the bank in Benin Republic, as part of its equity contribution to the bank's initial public offer (IPO). The money was meant to demonstrate the commitment of the Headquarter's bank to the vision of the bank and thus make the IPO successful. In the event the IPO never held and the money was placed in a deposit account at the rate of two per cent interest per annum. However, a routine audit examination by the CBN discovered the money which it claimed was used to recapitalize the bank without its prior approval and ordered it to be returned within seven working days. The money was duly returned, but with $6 million short and the two per cent interest. Up till now, the balance is yet to hit the account of the bank.
Another avenue for leakage in the bank, according to documents made available to BH, is image making. The bank allegedly pays N5 million monthly to a public relations company (name withheld) to handle brand consultancy services for it.
A member of the union also accused the GMD of running down the bank. “Okay, at the time of the CBN intervention, we were exposed to the Interbank market to the tune of N50 billion only. Today, the bank is exposed to the same market to the tune of N100 billion and another N120 billion to the CBN intervention window, totaling N220 billion. And yet the CBN accused Ebong of running down the bank. So, now who is actually running down what?
Also, the management has employed about 1,500 staff, mostly at the management level. This has shot up management cost by over N600 million annually.
Every week, leading members of the various unions in the bank meet in a hidden location somewhere in the sprawling Lagos metropolis. They call it “The Bunker”. It is a command post of sorts, where they meet to make strategies in what one of them has termed “the mother of all battles, a battle to save Union Bank from Sanusi/Funke for the workers and shareholders.” The members have apparently sworn oaths of fidelity and commitment to their cause. In a special clandestine meeting with BH they vowed never to give up. “Listen to us, Funke will never buy Union Bank. No one will buy it. That bank belongs to the workers who have suffered for it and the shareholders. It will remain for them.” BH learnt authoritatively that they have made contacts with some important people in the society, including eminent traditional rulers and top government officials. They have also succeeded in forcing unity among past executives of the bank who had hitherto squabbled among themselves. They are resolved to confront the challenges frontally. Perhaps, unknown to the GMD, the union has permeated every structure in the bank, collecting information and documents of whatever transactions that take place. One of them told BH, “I think the problem with Funke is that she underrated us. Anytime she coughs in her office, we know. In fact, anything we want to know, we get to know, she does not understand the power of a union. Well, we will teach her!” BH also learnt that some leading officials of the bank have visited several countries in Europe, South Africa, Middle East and the USA to investigate Alliance Capital and some of the other institutions offering to buy the bank. One of them told BH, “our next line of action is to file legal action in each of those countries challenging these companies.”
BH EDITOR'S NOTE
Business Hallmark made strenuous efforts to speak with officials of Union Bank of Nigeria Plc on these issues. Mr. Francis Barde, Principal Manager, Corporate Affairs, demanded written questions which we duly provided. But he pleaded that the answers to the questions were beyond his competence, since some of the issues dealt with Executive Management decisions. The Public Relations consultant of the bank approached us several times to stop the story. The Public Relations department of UBN Plc even sent us a fully written story to be used instead. Of course, we declined. We were subjected to various other forms of pressure, all designed to stop the story. However, we insisted on reporting this story in fulfillment of our duties and obligations to journalism and the public interest. We believe that it is the core objective of journalism that the truth should and must be reported.
But the CBN thought differently. In its statement announcing the sacking of the Executive Management, it alleged that “Union Bank of Nigeria Plc is in dire need of capital. The issued and paid up capital of the Union Bank of Nigeria Plc has been lost, Union Bank of Nigeria Plc has insufficient capital to cover its liabilities. It has therefore become imperative to take urgent action in order to arrest the deteriorating state of Union Bank of Nigeria Plc, save the bank from failure, and pave the way for the repositioning of the bank for its stability and growth.”
However, exhaustive investigations carried out by BH revealed that the CBN's position was not correct to say the least and was based on a patently false evaluation of the bank's financials. A former Director of the bank told BH that the apex bank (CBN) merely read the bank's financials in manner that would enable it arrive at a predetermined position, that is, “Union Bank of Nigeria Plc was financially distressed, so as to take it over.” Even the rescue team headed by Funke Osibodu which was sent to reposition the bank was surprised on arrival to discover that the situation was not as dire as the CBN had announced to the public. A member of the bank's staff union put it rather sarcastically, “When Funke and co arrived, instead of an empty treasury, they found a honey pot,” and alleged, “they have been licking it ever since!”
There were three clear items in which CBN's analysis were faulty.
(1) The bank had re-evaluated the assets of some of its prime real estate holdings. It is common knowledge within the banking industry that Union Bank of Nigeria Plc has some of the most valuable real estate holdings in the country. The only other bank that can compete with it is First Bank of Nigeria Plc. Unlike some of the new generation banks, which tend to lease many of its office buildings, Union Bank actually owns its buildings. The exercise produced an asset re-evaluation of N25 billion discounted at the BN rate of 45 per cent. The bank applied to the CBN for approval to incorporate this figure into its financial statement for the period ended 31st March, 2009. The request was delayed and finally on Thursday, August 1, 2009, it was declined. The CBN asked the bank to appeal its decision. BH can now confirm that the denial by the CBN was part of the grand scheme to undervalue the bank as grounds for its seizure. Subsequently, the CBN quietly approved the request which the Osibodu team incorporated in its March 2009 accounts.
(2) Union Bank of Nigeria Plc had extended a facility of N30 billion to Transcorp Nigeria Plc to finance its acquisition of NITEL Plc. When the Federal Government reversed the sale of NITEL Plc to Transcorp, BPE informed Union Bank that the Federal Government would issue bonds to the banks as repayment for the loans. When the joint CBN and NDIC team visited Union Bank on the stress test, they were shown the letter. But the CBN pointedly ignored it and treated the credit as a non-performing facility. That worsened the bank's loan - loss situation. Interestingly that facility has now been paid in full.
(3) Union Bank of Nigeria Plc had exited the Discount Window in May and was not exposed to the CBN on that transaction at all. BH's findings reveal that it resorted to the window in the first instance, not because of any systemic liquidity problems, but as an investment vehicle. The window offered attractive yields because of the low cost of funds. The treasury department of the bank traded with the funds it sourced from the window at very attractive margins. But the CBN claimed that by resorting to the window, the bank indicated its fragile liquidity problems. It is noteworthy that at the time of the CBN intervention, Union Bank's net exposure to the inter bank market was just about N50 billion. When CBN intervened, it injected N120 billion. Sources within the bank told BH that “we had no need for the inflow at all.” To prove that, the bank merely invested the bulk of it in treasury bills. It was already liquid enough to meet its operational needs. The truth really, was that Union Bank of Nigeria Plc was actually awash in cash. The new management team was reportedly pleasantly surprised to make that discovery. “So they settled down to dealing with the money!” a source in the bank alleged.
On October 7, 2009, the Board Establishment Committee of Union Bank Plc met at the boardroom, Stallion Plaza at 36, Marina Street, Lagos. The meeting started at 11.00a.m. Present were; M. Ahmed; O.I. Osibodu, GMD/CE; A.M. Adeosun; P. Ikeazor; I.A Kwargana, F.B.O Odimegwu; O. Okoloko; O. Olusanya; F.A. Shonubi, and C.P. Udofot. In attendance was Mrs. E.I. Odikanekwu (Mrs.), the secretary of the board. Many important issues were listed on the agenda including outsourcing of non-utility staff functions, staff appointments, organizational revitalization, revised staff loan categorization and interest rates, etc. However, the most interesting item, at least, to the executive directors, was item 11, remuneration for GMD/CE and Executive Directors. At that point the Executive Directors excused themselves from the meeting to enable the other directors discuss their remunerations. Mrs. Funke Osibodu, GMD/CE informed the members that “even though the CBN had directed that the new Executive Directors should be entitled to the compensation of the exited Executive Directors, her team was already earning far higher than what was being offered.
Ordinarily, there should have been no discussions on the issue, given the CBN directive that was crystal clear. But the Osibodu executive management team was determined to enjoy the largesse it had discovered at Stallion House. One of the non-Executive Directors who was present BH was reliably informed, opposed the GMD's proposal to pay her team more than what the CBN had prescribed. The sourced revealed: “But Funke told him that she would put the issue to vote. She did and of course, our pliant board voted to approve her proposal!” When the meeting rose by 3p.m., they had agreed to recommend to the board thus:
1) The annual payment to the Executive Directors of the bulk sum of N68 million and the details should be worked out by the management in terms of basic salary and allowances.
2) That the chairman of the board and the chairman of the Board Establishment and Services Committee should work together to fix the GMD/CE's total emolument.
The meeting also agreed to purchase “the new available 'S' and 'E' series models respectively of Mercedes Benz cars for the Group Managing Director/Chief Executive and Executive Directors. The meeting also agreed to pay members of the Executive Management team three years Housing Allowance in lieu of accommodation where needed to the Group MD/CE and the Executive Directors.”
On May 25, 2010, the Executive Director, Operations, IT and Services, originated a memo to the Group Managing Director, 'RE: Payment of Outstanding House Allowance.' “The board at one of its sittings approved that Executives could collect their Housing Allowances for three years in advance… It is now considered an auspicious time to pay the advance on our housing allowances.” The ED proceeded to seek for permission to pay; F. Osibodu - N26,765,753.42, Kunle Adeosun - N30 million, Philip Ikeazor - N30 million, Ibrahim Kwargana - N22,438,356.16, Ade Shorubi - N21,986,301.37, thereby making a total of N131,190,410.95. The GMD/CE promptly approved the memo the very next day, May 26, 2010.
It is interesting to note that the Osibodu management team was contracted for a two year term by the CBN. A member of the Senior Staff Union who spoke to BH wondered, “Why would people on a two-year contract collect housing allowances for three years?” That question and similar others are being asked all over the various branches of the bank in the country. An employee in Kano main branch sent an SMS to BH last week, wondering how a rescue management team should earn double and even triple the salary of the previous management. “Ebong was earning about N36 million per annum. His ED's earned about N26 million at a time when the bank was buoyant. Now, they say we are broke, and yet the new people are earning such huge sums. So what would they have earned if we were not broke?” he queried.
However, it is not the executive management team alone that is enjoying the good times. Other members of the board have also been living it up. On August 19, 2010, Mr. Somuyiwa A. Sorubi, the acting Secretary wrote a memo to the GMD/CE: Re: Payment of Benefits of Retired Directors. In the memo, he sought for approval to pay various sums of money in various currencies, totaling N157,381,408.02, US $75,600.00 and £13,250 to the outgoing directors: Prof. M.G. Yakubu, Engr. I.A. Gobir and Mr. O. Olusanya. By August 20, 2010, the GMD approved the memo. In what has turned out to be a major scandal, the three retired directors whose retirements have taken effect, are still on the board of the bank. In an extra-ordinary development which has no precedent in the bank's history, the GMD took the issue of their retirement to the bank's Annual General Meeting which took place in Maiduguri last year and got it to approve their continued stay on the board until the bank is fully recapitalized. However, BH has learnt that the issue was never agreed on by the board to be included in the agenda of the AGM. Sources close to the board told BH that when she was confronted by some aggrieved board members, she apologized and alleged that it was the mistake of the company secretary to have put the issue on the agenda in the first place. Interestingly though, she has continued to allow the status quo to prevail with the retired directors still on the board of Union Bank Plc. Inside sources in the bank told BH that “it is a deliberate ploy by Mrs. Osibodu, who is apprehensive that their exit would facilitate the emergence of new members on the board who will not be amenable to her strategies. The feeling is permissive in the bank, especially among the rank and file that the GMD/CE is interested in acquiring the bank for herself. Whereas BH could not corroborate this view, it is strongly held by many especially members of the union. According to them, “it is this ulterior motive of the GMD/CE that is at the core of the problems of the bank and informs the numerous antics of the GMD, especially her insistence of vitiating the value of the bank to enable both her and her cronies buy it cheap”, a union leader told BH.
On June 10, the ED operations, IT and Services, wrote to the GMD requesting for his approval to pay education and furniture allowances to members of the Executive management. The amount he requested for was N68,286,301.37 which was the amount outstanding from April 2010 to September 2010. The ED stated that “the payments had been deliberately delayed by Executive Management until it was clear that the bank was on the path of recovery.” By implication, he believed that the Bank was now on a path of recovery! Six days later, precisely on the 16th, the GMD approved the payments, thus confirming that the Bank which the CBN had claimed was distressed was now fully on the path of recovery, barely one year later. The question now agitating many staffers of the bank and other industry observers is, “if the bank is on the path of recovery to warrant such huge emoluments by its management team, then why is the CBN still classifying it as distressed and insisting on selling it? As a union official asked BH, “then why not allow it to continue on this path of recovery?”
On 23rd August, Mr. J.O. Okanlawon, Head, Protocols, wrote to the DGM, Foreign Operations, seeking approval to pay retirement benefits to Prof. M.G. Yakubu $28,000 and £5,250; Engr. I.A. Gobir $23,800 and £4,000; Mr. O. Olusanya $23,800 and £4,000 respectively. The approval was granted the next day.
On May 25, the Head, Procurement Services originated a memo to the GMD requesting for approval of N58,080,000 to purchase status cars; M/Benz E350, Land Cruiser LC 200 VX V8 8-S ATLS vehicles for four members of the Executive management group including Mr. Philip Ikeazor, Mr. Kunle Adeosun, Mr. Ibrahim Kwargana and Mr. Ade Shonubi. The first set of the same cars had earlier been allocated to the officers involved. The total cost of status cars allocated to the four members was N116 million approximately. If you include the cost of the cars bought for the GMD, the total amount would be N144,173,400 only!
The total salaries and emoluments of the GMD is shrouded in secrecy. But given the princely sum of N68 million which the ED's earn, many people in the bank believe that it would be in the neighourhood of N100 million. However, sources in the bank said that her real jackpot is in estacode and other travelling allowances. “It is in travelling that she makes her kill!”a union member told BH. Sources within the bank told BH that she travels often, both locally and internationally.
Another issue worrying Union Bank stakeholders is the $13 million dollars of the bank which the previous management had invested in the subsidiary of the bank in Benin Republic, as part of its equity contribution to the bank's initial public offer (IPO). The money was meant to demonstrate the commitment of the Headquarter's bank to the vision of the bank and thus make the IPO successful. In the event the IPO never held and the money was placed in a deposit account at the rate of two per cent interest per annum. However, a routine audit examination by the CBN discovered the money which it claimed was used to recapitalize the bank without its prior approval and ordered it to be returned within seven working days. The money was duly returned, but with $6 million short and the two per cent interest. Up till now, the balance is yet to hit the account of the bank.
Another avenue for leakage in the bank, according to documents made available to BH, is image making. The bank allegedly pays N5 million monthly to a public relations company (name withheld) to handle brand consultancy services for it.
A member of the union also accused the GMD of running down the bank. “Okay, at the time of the CBN intervention, we were exposed to the Interbank market to the tune of N50 billion only. Today, the bank is exposed to the same market to the tune of N100 billion and another N120 billion to the CBN intervention window, totaling N220 billion. And yet the CBN accused Ebong of running down the bank. So, now who is actually running down what?
Also, the management has employed about 1,500 staff, mostly at the management level. This has shot up management cost by over N600 million annually.
Every week, leading members of the various unions in the bank meet in a hidden location somewhere in the sprawling Lagos metropolis. They call it “The Bunker”. It is a command post of sorts, where they meet to make strategies in what one of them has termed “the mother of all battles, a battle to save Union Bank from Sanusi/Funke for the workers and shareholders.” The members have apparently sworn oaths of fidelity and commitment to their cause. In a special clandestine meeting with BH they vowed never to give up. “Listen to us, Funke will never buy Union Bank. No one will buy it. That bank belongs to the workers who have suffered for it and the shareholders. It will remain for them.” BH learnt authoritatively that they have made contacts with some important people in the society, including eminent traditional rulers and top government officials. They have also succeeded in forcing unity among past executives of the bank who had hitherto squabbled among themselves. They are resolved to confront the challenges frontally. Perhaps, unknown to the GMD, the union has permeated every structure in the bank, collecting information and documents of whatever transactions that take place. One of them told BH, “I think the problem with Funke is that she underrated us. Anytime she coughs in her office, we know. In fact, anything we want to know, we get to know, she does not understand the power of a union. Well, we will teach her!” BH also learnt that some leading officials of the bank have visited several countries in Europe, South Africa, Middle East and the USA to investigate Alliance Capital and some of the other institutions offering to buy the bank. One of them told BH, “our next line of action is to file legal action in each of those countries challenging these companies.”
BH EDITOR'S NOTE
Business Hallmark made strenuous efforts to speak with officials of Union Bank of Nigeria Plc on these issues. Mr. Francis Barde, Principal Manager, Corporate Affairs, demanded written questions which we duly provided. But he pleaded that the answers to the questions were beyond his competence, since some of the issues dealt with Executive Management decisions. The Public Relations consultant of the bank approached us several times to stop the story. The Public Relations department of UBN Plc even sent us a fully written story to be used instead. Of course, we declined. We were subjected to various other forms of pressure, all designed to stop the story. However, we insisted on reporting this story in fulfillment of our duties and obligations to journalism and the public interest. We believe that it is the core objective of journalism that the truth should and must be reported.
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