Saturday, 8 March 2014
The Return of the Crooked Banker-El-Rufai's Scandal
Jimi Lawal, former Managing Director of Alpha Merchant Bank (who duped investors, and ran overseas) is back in Nigeria, consulting for the FCT Minister, Nasir el-Rufai In the corridors of power in Abuja, controversial former bank executive, Shakiru Olajimi Adebisi Lawal, widely known as Jimi Lawal, struts about.
The story of the former managing director of distressed Alpha Merchant Bank, convicted in absentia in Nigeria for criminal acts, divorcee in the United States of America, believed to be wanted there for tax matters and now consultant to the Minister of the Federal Capital Territory, Malam Nasir el-Rufai, presents a veritable case study in analysing President Olusegun Obasanjo’s war against corruption. Lawal’s embrace by Aso Rock throws up questions on the sincerity of the president and his aides about battling corruption. In many homes in Nigeria, bitter memories remain of the agony the mismanagement of Alpha Merchant Bank, under Lawal, wrought. One instance was the sad story of Chief Michael Omisade, former chairman of the National Bank of Nigeria and director at Alpha. Omisade, co-founder of the bank with Lawal, whose law chambers undertook the task of incorporating the bank, suffered from stroke in the aftermath of the distress that hit Alpha in 1993.
The tragedy swept away the multi-million naira investment of the lawyer in the bank and threw him into an indisposed state from which he never recovered. He died so ill and wretched. Another was the pitiable slide in life of one Wale, a depositor and cousin of Vincent Laniyan, publisher of the defunct African Tourist magazine. Till November 1996 when Laniyan died in the ADC Port Harcourt-Lagos flight, he never tired of recalling how his cousin was crippled by stroke, occasioned by the bad news that his deposits were trapped in Alpha Merchant Bank. Many depositors who survived the Alpha nightmare remain stuck on bad times. Although they were compensated by the Nigeria Deposit Insurance Corporation, NDIC, the maximum amount of N50,000 that they were paid, as restricted by law, was a far cry from the millions of naira they had deposited in Alpha. However, while they wallow in anguish, rendered helpless to pick up the pieces of their lives, Nigeria’s manner of dispensing justice has not only accorded Lawal a red carpet reception in government circles, it has been rewarding him handsomely. And as a leopard cannot change its spots, Lawal is back in the eye of a billion naira sleaze over proceeds of sales of plots of land in Abuja. El-Rufai, believed to have worked with Lawal some years ago at Alpha Properties, had rehabilitated the former fugitive from a self-imposed exile, to hand him a juicy consultancy job on land matters in the Federal Capital Territory. The result: a stormy scandal that has put el-Rufai’s integrity on the line.
Situating the Jimi Lawal saga in its proper perspective entails some sequential telling. Lawal crept into banking and national prominence in 1988 when he became the managing director of Alpha Merchant Bank. Initially, he was hailed as the long-awaited banking whizz-kid needed to breathe some refreshing change into an industry rendered stuffy by some old, first-generation conservatives. Within seven months of commencing operations, Alpha had posted a profit of N7 million. But with this sweet story also came a streak of scandals, about Lawal. As it has turned out, scandals have become a permanent feature in the life of the 47-year- old bullish banker. Barely two months after Alpha took off, on 4 August 1988 specifically, two of its shareholders fired a petition to Abdulkadir Ahmed, then Governor of the Central Bank of Nigeria, CBN, alleging forgery against Lawal. The shareholders, A.O. Ilori, a lawyer and I.O. Odefisayo, a chartered accountant, in their letter titled, “Fraudulent Practices at Alpha Merchant Bank Limited”, accused Lawal of falsifying the information in his curriculum vitae that he submitted to the CBN and the Federal Ministry of Finance. In the CV, the Alpha boss claimed to be a Master of Business Administration, MBA, product of the City University Business School, Barbican, London. He also wrote that he was a Departmental Manager at the Foreign Exchange, Bills/Credits Department of the Union Bank in London. The petitioners declared that Lawal did not possess an MBA from City University, neither was he a manager at Union Bank. The banker, they stated, was a mere supervisor at the London bank, a position that did not qualify him to be approved by the CBN as Executive Director in any bank in Nigeria. “The obvious implications of these fraudulent practices,” Ilori and Odefisayo alerted, “is that the CBN has not only been deceived by Jimi Lawal in approving his appointment as an Executive Director on the basis of the purported qualifications and working experience, but it further constitutes a fraud on innocent shareholders at whose expense Jimi Lawal has taken benefits by way of remuneration and perquisites of office.”
From another end, a suit also came against the erstwhile Alpha Bank managing director. Jide Zaid, a lawyer in Omisade Chambers, headed to court to file a suit against Lawal, alleging forgery and threat to his life. This suit confirmed the talk abroad then that all was not well between Lawal and Michael Omisade, whose chambers did the incorporation of Alpha Merchant Bank. Omisade, a source told TheNEWS, expressed fears about the future of the bank when he found out that “Lawal was not what he smoothly talked him into understanding he was.” As Ilori and Odefisayo earlier did, Zaid also proceeded to tear Lawal’s CV apart. Omisade’s chambers, on 10 August 1988, wrote to Alhaji H.T. Ashiru, Principal of Muslim College, Ijebu-Ode, which Lawal claimed to have attended between 1970 and 1975 and bagged seven papers in the West African School Certificate examinations, for confirmation. Ashiru’s prompt response gave the lie to Lawal’s claims. The Principal wrote: “Mr. Shakiru Olajimi Adebisi Lawal attended Ijebu Muslim College, Ijebu-Ode, and was in Class Four in 1975. In fact, we discovered that he repeated the class in 1975 and was advised to withdraw at the end of the session in November 1975 when he was unable to gain promotion to Class Five. In another letter dated 12 July 1988 by Omisade Chambers to Mrs. A.A. Fashina, then Principal of King’s College, Lagos, her reply was: “We have carefully gone through our records and discovered that at no time was there any student by name Shakiru Olajimi Adebisi Lawal. Moreover, I wish to confirm that King’s College has never run a part-time programme for either WASC or HSC course.” Lawal had claimed in his CV that he did a part-time HSC programme at King’s College, Lagos, from 1976 to 1977 where he obtained four GCE “A” Level passes. From City University School, London, where Omisade Chambers had written to concerning Lawal’s claim of an MBA came another disclaimer on 21 July 1988. Kate Adam, Course Secretary for the school’s evening MBA programme, wrote back to state that although Lawal had begun the university’s part-time MBA degree course in September 1983, he was not awarded an MBA because he withdrew and did not complete it. When Zaid also requested from Union Bank in London to clarify Lawal’s status while he worked there, the feedback was another shocking expose: “Mr. Lawal was employed by this branch as a Supervisor (Documentary Credits) from June 1984 to August 1986, and not a departmental manager. Supervisory positions are not on the senior management cadre of this bank nor of the bank as a whole.” Somehow, Lawal, who has, over time, proven to be the replica of Houdini, the character reputed for wriggling out of the tightest of jams, squirmed out of the legal wranglings, courtesy of spirited intervention by some highly-placed Nigerians who prevailed on the warring parties to settle out of court. Lawal’s claim of being 31 years old when he emerged Alpha’s managing director could not but also come into dispute.
The controversial banker was born in September 1959. Effectively, he could not have been more than 29 years when he became Alpha’s MD in 1988. This was a year shy of the 30 years minimum age requirement that the CBN prescribed for anybody aspiring to be managing or executive director of a bank. Like Salisu Buhari, the then 29-year- old former Speaker of the House of Representatives who lied about his age so he could contest election as a Rep, Lawal apparently upped his age to fool the CBN. However, unlike Buhari who honourably resigned as Speaker only one month into his reign when TheNEWS exclusively blew the whistle on him, Lawal got away with the fraud and ruled Alpha as MD for five years, from 1988 to 1993 when the bank went under. When this magazine met with Lawal about a month ago at the NICON-Hilton Hotel, Abuja, to comment on the sundry allegations against him, he would not field answers. The only strand of defence he clutched on to was his acquittal, in 2004, by a Federal High Court, Lagos, on three counts of criminal offences (banking malpractices) for which he had been convicted by Zone 2 of the Failed Banks Tribunal on 19 March 1996. Lawal, with Chief Udensi Ifegwu, a non-executive director of Alpha Merchant Bank, and two other managers of the bank were found guilty of running Alpha Merchant Bank aground through unethical banking practices. Narrating Lawal’s unenviable odyssey at Alpha Merchant Bank would significantly impact on properly understanding the confines of his acquittal in 2004. The judgement of the Failed Banks Tribunal that indicted him may have been set aside for “lack of jurisdiction,” by the Federal High Court, Lagos, but the burning issue of the malpractices that led to the crash of the bank and the unmitigated sufferings of its depositors cannot but subsist. Lawal, it would seem, had a clear idea of what he wanted to do with Alpha Merchant Bank when he set out to establish it, with some others, in 1988. But, although there were early warning signals from Omisade to the CBN that Lawal was perfecting some designs that were clearly detrimental to the health of the bank and its depositors, the former managing director was shrewd enough and well-wired to ward off all challenges. It was not until 1995-1996 when the sordid deals at Alpha were exposed at the Failed Banks Tribunal that an aspect of Lawal’s improprieties was exposed. According to the facts of the charge, No. FBFMT/L/ZII/IC/95, Lawal conspired with Udensi, a major shareholder in the defunct bank, to perpetrate some underhand deals that eventually contributed to sinking the bank. Both Udensi and Lawal later jumped bail and fled the country to avoid trial. They were subsequently tried and sentenced to terms of imprisonment in absentia.
Interestingly, Udensi’s wife, Joy would later prove she was tarred with the same despicable brush as her husband when, as chairman of Citizens International Bank plc, she was found out by the CBN to have engaged in sharp practices. Joy was ignominously removed last year by the CBN from the Citizens job. However, before further action could be taken against her, she bolted from the country. She was believed to have joined her husband in the Republic of Benin where he has been hibernating since fleeing Nigeria. Charged on 25 October 1995, apart from Udensi and Lawal, were Tony Nnachetta, Jeff Fayomi, Ezekiel Adebayo Ajetunmobi and Adesina Onikeku. In the charge, Lawal was described as a bosom friend and business associate of Udensi. He was also the relationship manager of Udensi’s account at Alpha Merchant Bank. Nnachetta was employed by the bank in 1990 as General Manager, but later became an Executive Director in charge of Alpha’s foreign exchange transactions. Fayomi was a General Manager responsible for Corporate Banking, while Ajetunmobi was an Assistant General Manager. Onikeku was a staff in the Financial Control and Planning Division. Udensi owned three companies which were allegedly used to commit the offences. The companies were Dubic Industries, Udina Mix Farms Ltd. and D.U. Chemicals Ltd. The first of the 10-count charge against the accused read that: “Lord Chief Udensi Ifegwu (now at large), Jimi Adebisi Lawal (now at large), Tony Nnachetta and Jeff Fayomi, while being directors and or managers of Alpha Merchant Bank (now in liquidation) at Lagos, between 30th June 1988 and 1st October 1993, conspired to commit a felony, to wit, fraudulently granting credit facilities to Dubic Industries Limited without lawful authority in contravention of rules and regulations of the said Alpha Merchant Bank plc and the regulatory authorities (CBN/NDIC), and thereby committed an offence punishable under Section 516 of the Criminal Code Act, cap 77 Laws of the Federation 1990, to be read with Section 3(1)(6)(c)(d) of the Failed Banks (Recovery of Debts) and Financial Malpractices Decree, 1994, as amended.” Ajetunmobi and Onikeku were accused of conspiring to mislead the CBN by “dishonestly” forging credit vouchers in favour of Udina Mix Farms Limited, a customer of the said Alpha Merchant Bank and one in which Udensi had substantial interest. Both men were also said to have extended the same forgery treatment to D.U. Chemicals Ltd, another Udensi company. Apart from forging vouchers, the two men were also alleged to have fraudulently made false accounting entries by dishonestly understating the indebtedness of Udensi’s companies to Alpha. This, the charge read, was wilfully done to mislead “and did mislead” the CBN and the NDIC on the actual indebtedness unlawfully granted the companies. Counts eight and nine of the charge accused Lawal, Nnachetta and Fayomi of granting credit facilities worth $2.96 million to Dubic Industries Limited without lawful authority and security, in contravention of the rules and regulations of the bank and the regulatory authorities (CBN/NDIC). It was established that Udensi and Lawal were business associates not only at Alpha Merchant Bank Limited, but also at Alpha Properties Ltd. and Alpha Sofitel. In simple terms, Udensi’s companies – Dubic Industries Limited, Udina Mix Farms and D.U. Chemicals Ltd – were alleged to have enjoyed forex allocation and utilisation from Alpha, with Udensi, a director of the bank, not declaring his personal interest in the loan/credit facilities. The companies did also not back up their forex transactions with naira, as demanded by the bank’s regulations. In essence, the companies did not pay for the forex they utilised, which automatically made the transaction a credit facility. Worse still, certain mandatory steps like opening a file for the companies were not taken by the bank. In fact, they, the companies, did not bother to apply for the forex utilisation. To shield the $2.96 million forex facility granted Dubic Industries Ltd, from the regulatory authorities, the Jimi Lawal-led management was stated to have instructed Ajetunmobi and Onikeku to understate the indebtedness of Udensi’s companies by entering it in their accounts only at month-end, only to reverse it on the first day of the following month.
The entries were then transferred to a block for suspended debt accounts. In the tribunal’s judgement delivered by Justice M.A. Ope-Agbe, its chairman, it held that there was no disputing the fact that when the forex was over-utilised, there was no naira back-up. On the month-end entries and their reversals at the beginning of the following month, the tribunal averred that these “were part” of Alpha Bank “management’s policy to mislead or tell lies to the CBN or NDIC.” The tribunal also concluded that the absence of a credit file containing documents such as application for the loan/credit facility granted Udensi’s companies, application appraisal memorandum, approval memorandum duly signed, and offer letter, plus lack of security to cover those companies, pointed at a common design to allocate and utilise forex unlawfully. Then came the clincher: “THE COURT HAS A DUTY TO SOUND IT LOUD AND CLEAR THAT THOSE WHO EMBARK ON DESTROYING EDIFICES THAT HAVE BEEN THE ONLY HOPE OF THE ORDINARY WORKER SHOULD NOT GO UNPUNISHED. BY BECOMING DISTRESSED, THE DEFUNCT BANK HAS CAUSED SORROW TO MANY AND THE COURT WOULD TAKE THIS INTO CONSIDERATION TO IMPOSE A SENTENCE THAT WILL SERVE AS A DETERRENT TO OTHERS (ID EST, INTELLIGENT PEOPLE WANTING TO USE THEIR INTELLIGENCE TO CAUSE SORROW TO OTHERS.)” In his remarks before he sentenced Udensi, Lawal, Nnachetta and Fayomi to various terms of imprisonment, Justice Ope-Agbe remarked that Udensi and Lawal particularly, were intelligent people who misdirected their energies towards “wrong uses”. In so channelling their energies to such wrong uses, the judge noted, “they have further eroded the confidence of the ordinary depositor in banks.” The tribunal consequently sentenced Udensi to five years on the first count of conspiring to commit felony, to wit, fraudulently granting credit facilities to Dubic Industries Ltd without lawful authority. The industrialist was also sentenced to pay a fine of N100,000 or go to jail for three years on the tenth count of not declaring his personal interest to the bank’s Board of Directors in the granting of credit facilities totalling $2.96 to Dubic Industries Ltd, in contravention of Section 18(3) of the Banks and Other Financial Institutions Decree of 1991. Lawal was sentenced to five years in prison on count one as Udensi. He was also handed a three-year jail term on count eight (granting the $2.96 million credit facilities to Dubic Industries Ltd without lawful authority) and another three years on count nine (granting the $2.96 million credit facilities to Dubic Industries without security). There was no option of fine for him. Lawal’s brazen disdain for the legal process throughout the trial was instructive. He was initially arrested to answer to the charges against him. He was granted bail and Dele Belgore,now a Senior Advocate of Nigeria, stood surety for him. But he jumped bail, a criminal conduct that almost led to Belgore’s loss of liberty and prospects in the legal profession, but for the influence of his father, Justice Babatunde Belgore. Till today, Dele is not on speaking terms with Lawal. The fleeing bank boss absconded to the USA. And although Udensi, with whom he absconded, deemed it fit to hire the services of Jide Ogundipe Esq. to defend him before the tribunal, Lawal’s approach to the trial was eponymous of a hardened crook. Comfortably esconced in his USA hideout, the runaway banker turned his back completely on the judicial enquiry probing how he ruined the lives and future of thousands of depositors who had reposed so much confidence in a bank he headed and in his own managerial perspicacity and integrity, but had been utterly disappointed by a man whose inner machinations were ab initio, so destructively egocentric. To Lawal, the Nigerian judiciary could go to hell. Funnily, it is under the pretext of the same legal system Lawal shunned that he is now claiming freedom from the convictions slammed on him by the Failed Banks Tribunal. In July 2004, Lawal did obtain from Justice Abdullahi Mustapha of the Federal High Court, Lagos, an order setting aside the sentences of the Failed Banks Tribunal, “for lack of jurisdiction.” Lawal was only exploiting an opportunity presented by an earlier court order secured by Udensi setting aside Ope-Agbe’s judgement while he, Lawal, was hiding in the USA. Udensi had gone to the Federal High Court for a prayer that his conviction was unconstitutional, null and void, as “there was no crime known to Nigerian law as fraudulently granting credit facilities.” Udensi also declared that his trial and conviction “was improper in law when the facts on which the crime was predicated occurred in part before the commencement of the Banks and Other Financial Institutions Decree of 1991 and partly after the commencement of the decree.” Udensi’s prayers were granted by the court. Taking a cue from this advantage, Lawal rushed to the Federal High Court praying that the same treatment be extended to him. There was even a laughable addendum in the affidavit filed in support of the originating summons taken out by Messrs. Ricky Tarfa and Co. seeking the determination of certain questions and claiming certain relief. In the affidavit, sworn to by Adetayo Oyedokun, a litigation officer in Tarfa’s chambers, Lawal claimed he was not informed by government or law officers of the details and nature of the offences with which he was charged prior to his “purported trial and conviction by the Tribunal.” He also stated that “he was at all material times during the trial in the United States of America and at no time was any summons in respect of the said charge serviced on him personally or in any other manner.” Had he been notified, he swore, he would have defended himself personally or through a competent legal practitioner of his choice. Not a few people queried Lawal’s claims here.
One, Lawal was arrested but jumped bail and ran away to the United States where he hid until his friends in the top echelon of the Obasanjo administration rehabilitated him at home. About a month ago, at NICON-Hilton Hotel, Abuja, where he maintains a suite allegedly paid for by the federal government, he declined to answer this magazine’s question on why he fled abroad, rather than stay here to clear his name of the charges against him. It is important to observe the fact that although Lawal might have been freed on the technical ground of “lack of jurisdiction,” the core criminal charges against him were never debated. So did Lawal criminally mismanage depositors’ funds in Alpha Merchant Bank as to result in the fall of the financial institution and cause untold agony in many homes? It would be interesting to see the former banker head back to the courts to thrash out this conscience-laden phase of his life. What was believed to have contributed more to the fall of Alpha Merchant Bank was Lawal’s obsession to buy 40 percent shares being liquidated by Banque International pour L’Africa Occidentale, BIAO, in Afribank (formerly International Bank for West Africa). In late 1990, Lawal expressed interest to purchase the shares. After a flurry of correspondence between Lawal, Afribank, UBS and the Federal Ministry of Finance, Alpha Merchant Bank subsequently paid for the shares through the Meridien International Bank Limited, MIBL, a company incorporated in the Commonwealth of the Bahamas whose registered office is at Meridien House, East Bay Street, Nassau, N.P. Bahamas. M. Jacques Piot, as its liquidator, represented BIAO. Jimi Lawal, representing Alpha Merchant Bank, deposited $1 million on the date of the agreement, 23 September 1991. Another deposit of $6 million was made at the execution of the agreement. The total cost of shares to be deposited at the MIBL was $12 million. Another $3 million deposited was soon made by Jimi Lawal and finally, the buyers paid another $3 million and then acquired the full shares from BIAO. The completion of the transaction was done at the premises of MIBL’s London Associates at 20 St. James’s Street, London, SWIA 1ES. The shares were acquired at N1 each. Jimi Lawal bought 45 million shares from Afribank and thus he and a web of people he fronted for became owners of 40 percent of the bank. The bubble burst when Lawal and his collaborators were found to have moved Alpha Bank’s depositors’ money through several accounts to pay for the acquisition. The federal government consequently placed a hold on the transaction around June 1993. The fallout from this dubious acquisition, specifically the slam from the federal government, was the last nail in Alpha’s coffin.
By 1993, Alpha Merchant Bank had totally failed in its operations and it collapsed. The bank was unable to fulfil its obligations to its numerous customers and shareholders. Lawal and Udensi were also believed to have ploughed depositors’ money into the AlphaSofitel, a hotel project which eventually flopped. In all cases of the numerous transactions that pushed Alpha Merchant Bank over the precipice, Lawal did not carry along the bank’s shareholders. While Alpha Merchant Bank was going down, the former banker was secretly building a honey nest for himself and his family in the United States. Through a stock account at Paine Webber INC., in New York, he acquired several high-yield stocks from Microsoft, Coca-Cola, Citigroup, Union Carbide e.t.c. Lawal resettled in Atlanta, Georgia, with his wife, Francesca Wachukwu and his three children. In the USA, he purchased a mansion at 1870 Childress Drive by way of lease-to-buy in 1996, using a front named “Dirk Twine”. He settled down to operate a travel agency, Pax Travels Inc. According to court documents, Lawal started Pax Travels with $50,000. He was also president of Concept Property Development Corporation, a company he claimed in court documents never traded before it was liquidated.