- Begins asset stripping
- New management explains stance
Bank PHB Plc has concluded plans to halt expansion of its offshore operations and limit activities to its subsisting outlets in The Gambia, Liberia, Sierra-Leone and Uganda.
Besides, the board may be restructured during a meeting of the directors slated for January 18, with Dr. Pat Utomi and Alhaji Akin Kekere-Ekun penciled down for removal from the board.
Already, the bank has withdrawn its application for banking licence in the United Kingdom (UK) and instructed its agents in other countries awaiting operational take-off to freeze the programme.
The financial institution, currently embroiled in alleged financial improprieties, however, secured a strong defence from the Central Bank of Nigeria (CBN), which described the allegations that included a $120,000 (N18 million) leave allowance payment to its managing director and undue mortgage facilities paid to some senior staffers as untrue and frivolous.
Under an offshore operational review plan approved by the Managing Director and Chief Executive Officer, Mr. Cyril Chukwumah, the bank has settled for disposal of the assets of Bank PHB UK, which was planned to have taken off, but for CBN's reform agenda under the regime of Sanusi Lamido Sanusi.
Earlier, the directors of Bank PHB UK had met and considered three options after a directive, which halted the outfit's take-off. The options were:
disposal or subletting of its premises and assets sequel to operational shutdown;
downgrading of operations to that of a representative office, to ensure medium term presence; and
selling of the business as a going concern.
The redesignation of the offshore outfit as a representative office was ruled out as the bank did not intend to re-apply for a banking licence in UK 'in the foreseeable future".
According to the approval letter signed by Chukwuma, in halting take-off of the UK operations, the first and last options were initially said to be feasible on receipt of proposals for the asset stripping.
But the bank expressed reservation over the last option since "Bank PHB UK may not really be considered as a going concern as it does not have a banking licence and has not commenced operations".
Also, it was considered that the parent company, given its current situation, "may not be able to afford the time and costs. Furthermore, PWC (PriceWaterhouseCoopers) has advised that it will also be a challenge to package PHB UK as a going concern, because it does not have an auditor."
Expectedly, the workers already recruited by Bank PHB UK would be laid-off. This would be effected by declaring all positions redundant and serving the workers the required three-month notice from January to March, this year.
"During this period, the bank will request for proposals for disposal/sublet of the assets, as well as possible sale of the entire business as a going concern. This approach is based on PWC earlier advice as the best option to mitigate against unfair dismissal claims."
In supervising the close-down or sale as a going concern, the bank plans to re-engage the chief executive officer or Head of Finance, "through a process that will be advised by PWC".
At a recent forum of the bank's chieftains, Utomi and Kekere-Ekun were slated for removal as directors, with a directive for legal clarifications on the issue. But the bank's shareholders are already bracing for a confrontation with the management on the new agenda, as they affirmed that board restructuring would require their endorsement.
"Any attempt to restructure the board at our back will be resisted. We shall go to any length to ensure that any act of illegality is not perpetrated at the bank," one of the shareholders, who spoke to The Guardian on condition of anonymity, said yesterday.
Earlier, reports indicated that Chukwumah collected $120,000 for a three-week yearly leave, in contravention of due process in the bank.
Sources from the bank affirmed that the Managing Director is only entitled to the amount on a yearly basis and should have collected only prorated amount, having served for only three months by December when he took the leave.
The bank's management was also alleged to have approved a N60 million mortgage loan for an unconfirmed Deputy General Manager, as well as unilaterally changing the organisation's official car policy to the benefit of the chieftains.
However, a top official of CBN described the allegations against Chukwumah as unfounded and mere rumour without any iota of truth.
He said: "Bank PHB has a board meeting on January 18, so, it is impossible to say the Managing Director is on a three month leave.
"The initial allegation was N60 million. It is untrue but we will make sure we audit the bank just to check these allegations. We took out the thieves and they still have their boys in the system, who know they may be implicated in investigations".
But Bank PHB, late yesterday evening, sent an official reaction to The Guardian.
The statement signed by the bank's Divisional Executive, Marketing and Corporate Communications, Charles Odibo, explained: "The approved amount for the CEO as travel allowance was $120,000, which is taken at a go and amortized over one year, in the case of our CEO, October 2009 to September 2010.
"However, the allowance, which he met in place at assumption of duty on October 2, 2009, as reviewed and approved by the Board on April 30, 2008 was $450,000. Our Managing Director, however reviewed it downwards because he felt it was excessive, considering what benchmarked banks are paying."
The statement also defended the monetization of status vehicles thus: "The status vehicles approved for the CEO are two Landcruiser jeeps and a Home vehicle.
On resumption, the CEO met one Landcruiser Jeep on ground, which he currently uses and monetised the second and the home vehicle over a 48-month period, for which he receives monthly amortisation of N392,688 and not N2 million."
On approval of N60 million mortgage, the statement indicated: "The DGM in question was confirmed on September 24, 2009 by the former Managing Director, and the said mortgage was approved by him as part of recruitment commitment as separate from standard mortgage policy for staff as part of relocation package and hiring agreement with the former CEO, before the resumption of Mr. Cyril Chukwumah.
On the Bank PHB, UK, the bank added: "The decision to shut down the bank's proposed branch in the UK was reached as far back as August 2009 by the former CEO, in conjunction with the Central Bank of Nigeria and the UK's Financial Services Authority (FSA). What the current management is doing, is the implementation of a process that had been earlier approved, while a request was sent to the board this month to ratify the management decisions."
By Ade Ogidan, Business Editor
source: The Guardian
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