•Underhand deals cited
A raft of dealings under the radar in Mainstreet Bank, formerly Afribank, may have signed, sealed and delivered its sale to vested interests three months before the close of bids.
The Assets Management Corporation of Nigeria (AMCON) set a September deadline for the sale, but investigation by TheNiche showed that powerful forces with deep pockets have already gobbled up the bank.
AMCON, which babysits Mainstreet Bank on behalf of the Central Bank of Nigeria (CBN), seems left with no choice but to question the dummy sold to it by the management of the bank.
The bank has nine subsidiaries, one of them overseas, yet operates without a board of directors. Its board and those of the subsidiaries and their chairmen were unilaterally sacked months ago.
Besides Mainstreet Bank itself, the group had nine subsidiaries – Mainstreet Bank Insurance Brokers, Mainstreet Bank Securities, Mainstreet Bank, Micro Finance Bank and Mainstreet Bank Trustees and Asset Management Company.
Others were Mainstreet Bank Capital Markets, Mainstreet Bank Registrars, Mainstreet Bank Estate Company, Mainstreet Bank Bureau De Change, and ANP International Limited, Dublin, Ireland.
All the subsidiaries have been collapsed into Mainstreet Bank itself.
Bello Falalu
The last to be collapsed was Mainstreet Bank Estate Company, whose board Chairman, Bello Falalu, was edged out after he fell out of favour with Group Managing Director, Faith Tuedor-Matthew.
Subsidiaries collapsed for insider interest
As to what informed the decision to collapse the subsidiaries and sack the board of directors, an impeccable source at the head office of Mainstreeet Bank on Broad Street, Lagos, confided in TheNiche that the bank is not available for sale to “outsiders”.
Our source said the CBN and AMCON (headed by Mustafa Chike-Obi) which supervises the bank are constrained to act out the script of “a poor player that struts and frets his hour upon the stage.”
Tuedo-Matthew allegedly awarded contracts worth billions of naira to firms connected with her to renovate the bank’s branches when the bank is being put up for sale.
The contractors carrying out the renovation include Strata Link Nigeria, Vikwemmy Nigeria, Shallex Nigeria, Nature Ventures Nigeria, DW Muree, Contemporary Group and Pelican Nigeria.
Among the questions being asked by stakeholders are
• In whose interest is the management renovating the bank?
• Is it being done in the interest of fabled prospective buyers whose brand outlook the management does not know?
• Is it being carried out for cronies Tuedo-Matthew is allegedly fronting for?
• Is the renovation being done for her, as she is rumoured to have concluded arrangements to buy the bank?
• Since the board of Mainstreet Bank has not been functioning, who approved the contracts, AMCON or Tuedo-Matthew?
Violation of corporate governance code
The CBN recently issued a corporate governance code which empowers the board of directors of financial institutions to set limits of authority specifying the threshold for large transactions and give approval for such transactions to take place.
The new code, which also includes discount houses, does not provide exemption for large transactions.
It specifies that members of the board, who are limited to a minimum of five and a maximum of 20, are severally and jointly liable for the activities of a bank and shall ensure strict adherence to the code of conduct for bank directors.
With the absence of a board of directors in the running of Mainstreet Bank, why has the CBN failed to sanction the bank or at least compel the management to constitute the board?
Stakeholders petition CBN, AMCON, NASS
Upset by perceived underhand dealings in the advertised sale, a group of concerned individuals has written to the bank threatening legal action if the process does not meet corporate governance standards.
The letter, written on May 20 by the solicitors of the protesters, Melu-Umeora & Associates, accused Tuedor-Matthew of scheming to buy the bank and urged her to vacate her office, because an interested party cannot legally and transparently preside over the sale.
Copies of the letter were sent to the bank, AMCON, CBN, the Securities and Exchange Commission (SEC), Senate President David Mark and House of Representatives Speaker, Aminu Tambuwa.
The letter alleged that the subsidiaries were collapsed into the bank to undermine the purchase value of the entities and facilitate acquisition at a ridiculous price.
It accused Tuedor-Matthew of misappropriating funds by travelling on chartered jets and buying two bullet proof G-wagon Mercedes Benz jeeps.
Mainstreet Bank Head of Corporate Communications, Nduneche Ezuruike, confirmed receipt of the letter on May 27 and promised to send the bank’s reaction to TheNiche. He failed to do so at press time.
AMCON’s timeline for the sale of the bank and its hasty process had raised questions early last month when it advertised that prospective buyers should submit expression of interest within two weeks.
AMCON owns 100 per cent equity of Mainstreet Bank and two others.
The banks were turned over to AMCON by the CBN and the Nigeria Deposit Insurance Corporation (NDIC) after their shareholders’ funds were eroded by huge non-performing loans and a lack of corporate governance which resulted in the distress of the banks in 2009.
A few weeks before the sale announcement, AMCON – also called ‘bad bank’ – appointed Barclays Africa Group and Afrinvest as financial advisers for the divestment of its shareholding in Mainstreet Bank.
It appointed Banwo and Ighodalo as legal advisers.
