MD N60m, Executive directors N45m, Group executive directors N35m
Emmanuel Thomas l Tuesday, July 25, 2017
IKEJA, Lagos, Nigeria – A witness today told an Ikeja High Court that a former Managing Director of the defunct Finbank Plc, Mr. Okey Nwosu and other directors of the bank aired when they used funds belonging to Finbank to buy its own share.
He also told the court how the bank that posted a loss of N150bn for the 2009 financial year graciously compensated Acting Chairman of the bank with N200 million, MD CEO N60m, the executive directors N45m and the group executive directors N35m.
Nwosu has been standing trial since 2003 alongside three former directors of the defunct Finbank – Dayo Famoroti, Danjuma Ocholi and Agnes Ebubedike on 23 count charge for an alleged banking fraud of N10.9bn.
But Mr. Elonna Ezulu, an officer in the legal department of the defunct Finbank said it is not proper for the bank to use its own money to purchase shares. Ezulu said this while being cross-examined by the prosecuting counsel for the Economic and Financial Crimes Commission, Mr. Rotimi Jacobs (SAN).
The witness further said his team was not aware that the directors used N18bn of the bank money to purchase its own shares.
“I was not informed that the N18bn of the bank money would be used to purchase its own shares. My unit was not involved in the purchase of the shares. It’s illegal for the bank to use its own money to buy its own shares,” Ezulu said.
Ezulu revealed that in 2009, the Central Bank of Nigeria and the Nigerian Deposit Insurance Corporation conducted special examination on 24 Nigeria deposit banks and the examination revealed that Finbank and some other banks are in grave situations.
He stated that the grave situations were capital inadequacy and liquidity ratio which were below regulatory ratio, weak corporate frameworks, and high ratio of non-performing loans. He further revealed that Finbank recorded a loss of N150bn for the 2009 financial year and that the CBN extended N50bn, 7 years facility to the bank, gave an order that the executive management team be replaced with the CBN appointed management with an order to recapitalize it.
Ezulu stated that despite the fact that the bank was wallowing in debt, the board approved some special package for executives.
“Following due deliberation, the board approved special compensation package for the MD CEO, executives, group executives.
“The MD CEO was to be given N60m, the executive directors N45m and the group executive directors N35m.
“Members of the board noted with satisfaction what the chairman has done to help the bank so the interim chairman was asked to step out of the meeting and the members unanimously decided to compensate the interim chairman with N200m,” Ezulu said.
Justice Lateefa Okunnu adjourned the case till November 6,8,9 and 14, 2017 for continuation of trial.
