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Wema Bank's Former MD Petitions CBN Governor over Crisis says ‘Acquisition will result in N30 billion loss’

July 22, 2009

Image removed.The former managing director of Wema Bank Plc, Adebisi Omoyeni has petitioned the Central Bank Governor, Sanusi Lamido Sanusi over alleged hostile and illegal acquisition of the bank by the SW8 Investment Limited and the liquidity crisis of the bank.


The CBN handed over Wema Bank to the new core investor early this month after SW8 bought the hitherto warehoused 2.7 billion units of shares of the bank formerly held by the Odua Group.

Omoyeni is also asking the new CBN governor to look into his “illegal and unjust removal as Wema Bank’s managing director by a mafia led by the former managing director of the bank, Tunde Lemo” who is now a Deputy governor with the CBN.

He also wants Sanusi to look into the "massive fraud" perpetrated by Tunde Lemo, during his tenure as the managing director of the bank.


In his petition dated June 10 2009, Omoyemi urged the new CBN governor to reverse the “hostile acquisition” because the shares were “illegally and secretly sold to the new core investor at a ridiculously low price that would result in a loss of over N30 billion to the bank.”

Omoyeni further alleged that the new investors were simply agents of Tunde Lemo, who is now a deputy governor with the CBN and are just “masquerading as core investors.”

Omoyeni queried: “Mr. Tunde Lemo’s group masquerading as SW8 Investment was registered with the Corporate Affairs Commission on 28th August, 2008, with a share capital of N10 Million, three days before I was scheduled to return to office in line with the MOU. Could that be said to be in good faith?”

The former Wema Bank managing director urged the CBN governor to set aside the sale of shares and the hand over of the bank to SW8 until all the issues raised in the bank’s crisis have been investigated “as directed by President Umaru Yar’Adua and resolved.”

In the petition, Omoyeni asked the new CBN governor to take a second look at his alleged illegal sack and the role of Lemo in the liquidity crisis being faced by Wema Bank.

He urged Sanusi to look into the “complete disregard for presidential directive, court orders and judicial proceedings by the former Central Bank governor (Soludo) in the Wema Bank Crisis.”

The petition reads further: “ As you settle down to work, I consider it pertinent to bring to your esteem attention the aforementioned issues which have contributed to the rather comatose position of Wema Bank Plc and to request your kind consideration in addressing them as a matter of urgency. I wish to state from the onset, that the present crisis at Wema Bank are directly or indirectly traceable to the actions and omissions of Mr. Tunde Lemo.”

Omoyeni alleged that as at the time Lemo was leading the Bank, he plunged the Bank “into a debt and mess of N8, 125,011,003 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.”

He alleges further: “In the 2002/2003 financial year, the actual profit made by the bank was a sum of N891, 000,000 but what he (Lemo) declared as profit on paper was N3.1Billion (N2.3Billion finally approved by CBN).  In order 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 Plc and presenting them as if the debt-owing customers were repaying their debts to Wema 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. We are not unaware of your very tight schedules, however, we attach herewith 12 cheques, totaling N755, 000,000 (Seven hundred and fifty five million naira) together with three instruments of transfer of funds to WEMASEC as per the instruction of Lemo. Unfortunately, the Bank had to pay taxes and dividends on this fake profit.”

The former Managing Director also alleged in the petition that two or three months before Lemo’s exit as Managing Director/Chief Executive of Wema Bank, Lemo approved a “staggering loan facility of N4.8Billion to Sirpi Alusteel Construction Ltd and Suffolk Engineering and Construction Company, both companies owned by one Mr. Henry MacPepple.

He alleged that as at December 31, 2006, the outstanding on these facilities was N6.71Billion. “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 precedent stipulated by the bank’s board.

“In addition, Mr. Tunde Lemo obtained post-dated manager cheques and corporate guarantee of defunct Fortune Bank Plc even though the Board of Wema Bank Plc had decided not to place any money with Fortune Bank because of its poor financial position.

“The debt had remained unpaid up till March 2007 when Wema Bank, after a very painstaking approach, got Suffolk Engineering and Construction Company to make a covenant to pay N2.75billion towards the repayment of the facility from other sources within the next 24months. As at when I was illegally sent on compulsory leave, the present Management has been able to recover N600,000,000 (Six hundred million naira) from the debt which has grown to over N7 billion.”


Omoyeni continued on the loan to Sirpi Alusteel Construction Ltd and Suffolk Engineering: “More painful to the Bank in this transaction is the fact that Mr. Tunde Lemo had turned down all appeals made by the Bank to him to help her talk to Mr. Henry MacPepple to settle his  companies’ staggering indebtedness to the Bank. Mr. Henry  MacPepple happens to be Mr. Tunde Lemo’s friend.  The present Board and Management had not come on Board as at the time the bookings were made and funds released.  These funds that were released were used to settle the indebtedness of First City Monument Bank.  The Board of Odu’a Investment Ltd  including its nominees on Wema Bank Board were dissolved at the material time and were not reconstituted when the credits were approved by Mr. Tunde Lemo and as such, he was therefore the Acting Chairman and Chief Executive Officer of the  Bank.”

Omoyeni also alleged that  apart from the two companies mentioned  above, Mr. Tunde Lemo during his tenure of office as the Bank’s Managing Director and shortly before he vacated office, appro-ved diverse loans and facilities to several customers in the sum of N8.2Billion.  "One of such customers is one Yesin International Oil & Gas, a Port Harcourt based customer to whom a credit facility of N600, 000,000 (six hundred million naira) lease and overdraft facility was granted without any board approval and collaterals.  The letters of credit and disbursement were made two months before Mr. Tunde Lemo presented the credit proposal for Board approval without any disclosure to the Board that the credit had been disbursed."


The former Wema Bank's MD alleged further: " Mr. Tunde Lemo worked in tandem with the First City Monument Bank (FCMB) as represented by Otunba Subomi Balogun, its alter ego, to acquire the Odu’a Investment Company Ltd shares in Wema Bank Plc.  We wish to draw your attention to a letter dated 4th January, 2007, written by FCMB to Odu’a Investment Company Ltd, making a proposal for the acquisition of Odu’a shares in Wema Bank Plc.  The letter was received by Odu’a Investment Company Ltd on 5th January, 2007.  On the same 5th January, 2007, Odu’a Investment Company Ltd also received from NDIC, a letter forwarding the report of the NDIC Routine Examination on Wema Bank Plc to it. The Bank is at pains to inform you that the said NDIC report for which my Management Team is being vilified covers substantially the terms of Mr. Tunde Lemo."

The former MD alleged that the CBN arrow that government should divest their holdings in banks to a maximum of 10% was substantially directed at Wema bank Plc "in this forceful acquisition bid."

Omoyeni said, " for instance, in the February 2007 meeting of Wema bank board and management with CBN, we were threatened that a CBN Edict would be put in place to revoke the license of any bank that is unable to conclude the divestment latest by 31 March 2007. Truly the Edict dated 23rd January, 2007 was hurriedly put in place, but immediately Wema Bank complied the Edict became  ineffective. As at today nothing has been done to other banks for non-compliance. Also Wema Bank was not allowed to raise money in the capital market to dilute the shares, which was what a bank like Skye did. The point we are making here is that it was another effort to ensure that Wema bank was hijacked by their cronies. We equally call for an independent investigation into the
implementation of this Edict to find out whether or not this is a wide allegation. This is another case of abuse of Office/Power by Tunde Lemo of CBN.

" The ripple effect of all the foregoing, is that while the bank is hamstrung by the activities of its past Chief Executive, particularly Mr. Tunde Lemo, my Management and Board of the Bank is being crucified for lapses and offences not committed by them.  Strangely enough, Mr. Tunde Lemo is now using his vintage and vantage position at the Central Bank to frustrate and kill the bank in order to cover his past deeds, some of which have been highlighted above."


Omoyeni urged Sanusi to ensure that justice is done and that all those responsible for the bank’s liquidity crisis be brought to book.

He also urged him to ensure his reinstatement as the Group Managing Director/Chief Executive Officer of Wema Bank Plc “as already directed by The President of the Federal Republic of Nigeria.”

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