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Sunday, November 13, 2016

Heritage Bank Chairman, Akinsola Akinfemiwa Faces Law Suit Over Mega Bizness Deal Gone Sour

In the midst of the ongoing war in Nigeria against corrupt judges and their lawyer collaborators,
SaharaReporters has learned of a fierce legal fight involving a Senior Advocate of Nigeria (SAN) and the chairman of a new bank, on the one hand, and a Lagos-based businessman which raises ethical and professional issues.

 In the fight are Jonathan Majiyagbe, a senior lawyer and former husband of Nigeria’s first female Chief Justice, Ms. Aloma Miriam Mukhtar; Akinsola Akinfemiwa, founding chief executive of Skye Bank who now chairs Heritage Bank; and a Lagos-based businessman, Sam Nwosu, described as a self-made person with little financial literacy.

At the heart of the fight is a deal which Akinfemiwa reportedly struck with the businessman in 2000 when the former was the managing director of Prudent Bank. The deal apparently went sour, leading to the sale of a two-wing house in highbrow Asokoro district in Abuja owned by Nwosu and his business partner, Chukwuemeka Anyaoha, a lawyer based in Onitsha, Anambra State. Akinfemiwa’s Prudent Bank reportedly sold the duplex to Majiyagbe, who was then a tenant of the property, at far below the market price and without the owners’ knowledge.

According to documents in our custody, Akinfemiwa and Nwosu met in the 1990s at Chartered Bank when Akinfemiwa was the deputy managing director and the latter a major customer. When he was appointed the Prudent Bank CEO, Akinfemiwa approached Nwosu to start doing business with his new bank, and even lobbied him with a N25 million-loan offer. The businessman opted for an overdraft to import Osram electric products from Germany. Rather than open a letter of credit (LC) and fund the account of Nwosu’s Sam Total Trade, Akinfemiwa provided the businessman with Traveler’s Cheques worth N26m in his name for one year beginning in October 2000.

Curiously, the highest amount approved by the Central Bank for personal travel allowance was $2,500 while $10,000 was for business travel. This means that the N26m worth of TCs was far in excess of the amounts approved by the financial authorities when the exchange rate was N80 to a dollar. No less curious is that none of the TCs is reflected in Nwosu’s international travel passport, as required by Nigerian law.

Prudent Bank discouraged Sam Total Trade, according to documents available to us, from importing the electric products. It instead advised it to import school bags from China which, the bank claimed, would yield a better return and within a shorter time. The bank even nominated a supplier, a Chinese national who did not provide the goods. The delinquent Chinese supplier is now in jail in China. Worse, according to documents, Nwosu’s account was never credited with any money. Yet, Prudent Bank made it seem as if a N26 million loan (which is the worth of the TCs given in his name) was paid into it.

The documents further showed that Prudent Bank deposited N48.315m into the account of Sam Total Trade on February 23, 2003. And on April 30, 2003, it paid N50m into the same account without any request by the customer to this effect. The bank reportedly claimed that the second amount came from Kakawa Discount House in Lagos, apparently to justify the interest it was charging the businessman, which was much higher than the rate allowed by the Central Bank. A source close to Nwosu said the businessman strongly denies ever having anything to do with the discount house. 

By the time things came to a head between Nwosu and Akinfemiwa’s Prudent Bank in 2005, the businessman had paid N219m into the account, according to a report prepared by an independent accountant. Olobo Tariah, a former credit and risk manager with Union Bank who now works as a forensic auditor, says the customer was grossly overbilled. After a 2004 account reconciliation meeting with Kayode Abolorinwa, representing Prudent Bank, at the bank’s headquarters in Lagos, Tariah wrote: “I discovered that there were some wrong and excess charges on the account as under stated: interest rates=N695,620.60; commission on turnover (COT)=N165,491.56; perfection of Abuja property=N88,000; facility fee=N125,000; % charges in unpaid installment=N340,000; compound interest on debt of N26m travellers’ cheque value from October 30, 2000, to October 19, 2001= N36,944,288.64. Total=N38,407,399.10.”

Continued the forensic auditor: “I discovered a discrepancy between the balance of N18,768,924.74 as at June 30, 2000, and that of N21,844,931.85 carried forward as at August 1, 2000. The bank failed to furnish their customer with the approval letter for a purported facility of N60m to enable the customer to know the terms of the credit, as demanded by the CBN regulations and standard bank practice. The cheque for No 19 for N127,000 was debited twice to the account on August 15, 2000, and August 16, 2000…

The lodgment of N50m into the account, which the bank claimed was a facility from Kakawa Discount House, is most intriguing, as it was subsequently debited to the account with charges which they also claimed were for the facility.”

After reviewing the questionable transactions, Mr. Tariah concluded that the Prudent Bank customer was, indeed, in credit, and requested that the bank return some money to Nwosu. The bank refused to comply, claiming instead that the customer owed it some N35m. It consequently pounced on the property at 222 Shehu Shagari Way in Asokoro, Abuja, in which Nwosu has interest, and sold it to Majiyagbe for N50m.  

The sale enraged Nwosu who accused both the bank and the senior lawyer of acting illegally and in bad faith. He wrote a letter through his lawyer to the Central Bank against Mr. Akinfemiwa. The letter was sent to the sub-committee on Ethics and Professionalism of the Bankers Committee. Ironically, Akinfemiwa headed the sub-committee. Nwosu alleged that the banker invited him to his office and tore the letter in his presence.

SaharaReporters learned that, to this day, the CBN has yet to ask for a report on Nwosu’s petition against Akinfemiwa.

Nwosu insists that the property sale was illegal because he was not the sole owner, pointing out that Anyaoha, the Onitsha-based legal practitioner, is a joint owner, as shown in all relevant records with the Federal Capital Territory. Anyaoha stated, “Majiyagbe’s purported purchase of the property is inexcusable because even though he is aware of my part ownership, my senior professional colleague did not bother to contact me at all before and during the so-called sale.” Besides, according to Anyaoha, “the N50m which the senior lawyer says he purportedly paid for the house is far, far below the market value even by the prices of 2005. Prudent Bank which purports to have sold the property at a mere N50m had previously valued it at N120m, and some people had offered to buy it at N100m which we rejected.”

Nwosu is totally convinced that Majiyagbe, the first African to be elected President of Rotary International, acted in absolutely bad faith. He alleged that the senior lawyer already owed N2m annual rent for 2005 when he supposedly bought the house where he had been a tenant for years. “He did not notify me, his landlord, about his intention to acquire the property,” said Nwosu, adding, “And he paid a pittance to Prudent Bank for it. This is absolutely unethical.”

Folorunsho Majiyagbe, the only child of, Mr. Majiyagbe and erstwhile Chief Justice Aloma Mukhtar, is currently using the property as both office and residence. SaharaReporters learned that Nathaniel Anah, a Senior Advocate of Nigeria and the Second Republic senator who was called to the Bar in England on the same day as Majiyagbe, advised his classmate and friend against the transaction.

Both Nwosu and Anyaoha may be heading for the court soon against Majiyagbe, Akinfemiwa and Skye Bank. Prudent Bank and some other banks merged in 2005 during the bank consolidation of 2004/5 to form Skye Bank, which was headed by Akinfemiwa until July 31, 2011. If the two aggrieved men go to court, public searchlight will be beamed on the ethical and professional conduct of a top banker, a senior lawyer, and their organizations.


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