Some members of the minority shareholders community have demanded an investigation of the management and directors of the defunct Heritage Bank.
This demand was made in a chat as the Central Bank of Nigeria revoked the license of the bank, according to The Punch.
The CBN had announced the revocation of the licence stating “This action has become necessary due to the bank’s breach of Section 12 (1) of BOFIA, 2020. The board and management of the bank have not been able to improve the bank’s financial performance, a situation which constitutes a threat to financial stability.
“This follows a period during which the CBN engaged with the bank and prescribed various supervisory steps intended to stem the decline. Regrettably, the bank has continued to suffer and has no reasonable prospects of recovery, thereby, making the revocation of the license the next necessary step.”
The Nigeria Deposit Insurance Corporation was then designated by the apex bank as Heritage Bank’s liquidator in accordance with BOFIA, 2020 Section 12(2).
The National Coordinator of Progressive Shareholders Association, Boniface Okezie, said that probing the bank managers would promote more confidence in the sector.
Okezie said “CBN is also part of the problem in the system, if the bank had been insolvent over the years and they had been living under the mercy of CBN, which should have taken action. In all this, what is the role of AMCON? They should have taken over the bank after all, the bank was also paying a levy to AMCON. Instead, CBN has directed NDIC to take over for liquidation. Is that the way to go?
“Someone has N20m in the bank and you pay them N5m until the assets of the bank have been assessed and liquidated. That is wrong. It is going to discourage people from using banks.
“Besides, is it only Heritage Bank that is insolvent? What is the fate of some other banks in the sector? Are they strong and viable? They should tell us. The management should be called for questioning. Those who ran the bank aground should be called for questioning. It is not enough that NDIC should liquidate.”
According to Okezie, in other climes, the managers and directors would be held accountable.
managers and directors would be held accountable.
“There must be a probe to recover people’s money. What assets does the bank have? CBN should probe the collapse of the bank so that others can learn. This is not good enough, something has to be done to arrest the situation,” he said.
Meanwhile, the National Coordinator of the Independent Shareholders Association of Nigeria, Moses Igbrude, argued, “They must probe the management of the bank. They should not let it slide because it will happen again if people are let off the hook. Let them investigate exactly what happened to learn lessons and ensure it does not happen again.”
In addition, he said that the regulator’s conclusion was by its legal duty, but expressed concern about how long it took to make the decision.
“The CBN is the regulator, empowered by law to supervise, to know which bank is healthy and which is not, so they are just doing their job. However, why did it take so long to do what is necessary?
“Also, they had another option to rescue the bank, remove the management, and put in place a CBN-led management to ensure it is standing and no one loses anything. At the end of the day, they sell it to Nigerians. This option would retain the employees.
It was an option but they decided to revoke the licence,” he stated.
In her remark, the President of the Pragmatic Shareholders Association, Bisi Bakare, said “The CBN has taken the right step on it. The depositors are a bit covered. It is only the shareholders of the bank who will suffer for it.”
