CBN Appoints New Executives For Union, Keystone and Polaris Banks After Sacking Boards, Management

The Central Bank of Nigeria (CBN) on Wednesday in a terse statement announced the dissolution of the boards and management of Union, Keystone and Polaris Banks.

The central bank said the action became necessary due to the non-compliance of the aforementioned banks and their respective boards with the provisions of Section 12(c), (f), (g), (h) of Banks and Other Financial Institutions Act (BOFIA) 2020., suggesting threat to financial stability of the system.

The apex bank was however silent on the recommendation by the Special Investigator, Jim Obazee appointed by President Bola Ahmed Tinubu to probe the CBN under former Governor, Godwin Emefiele, that the banks be forfeited to the federal government.

However, later on Wednesday, the apex bank announced the appointment of new executives to oversee the affairs of the banks.

The new executives for Union Bank include Yetunde Oni as Managing Director/Chief Executive Officer, and Mannir Ubali Ringim as Executive Director.

The CBN also appointed Hassan Imam as Managing Director/ Chief Executive of Keystone Bank as well as Chioma Mang as Executive Director.

For Polaris Bank, Lawal Mudathir Omokayode Akintola becomes Managing Director/ Chief Executive of the bank with Chris Onyeka Officer as Executive Director.

The appointments, which were contained in a statement issued by CBN acting Director, Corporate Communications, Mrs. Sidi Hakama, take immediate effect.

Union Bank

Union Bank is the second oldest bank in Nigeria, established in 1917, and was quoted on the Nigerian Exchange Limited (NGX). It recently merged in a court-ordered process with Titan Trust Bank and since then Titan Trust Bank ceased to exist as a legal entity. The bank is owned and promoted by the owners of the TGI Group, which had invested heavily in Nigeria’s agriculture sector and were makers of Chivita, which they recently sold to Coca Cola for over $1 billion, which they claimed they invested in the new bank. 

Obazee had invited  the promoters of Titan Trust Bank, Messrs Cornelius Vink and Mr. Rahul Savara, to meet with the team of Special Investigators and had threatened that if they did not show up, the bank would be forfeited as he believed the bank was owned by a phantom shareholder, which he claimed to be Emefiele.

Polaris Bank

For Polaris Bank, the institution was approved for acquisition by a northern interest by President Muhammadu Buhari, who had claimed that there was no northern bank among the banks in Nigeria. Owing to this, a group came together through Strategic Capital Investment Ltd. (SCIL), promoted by  Lawan Auwal Abdullahi, to purchase the bank as the sole thriving northern bank in the country. Lawal, is the son in-law to former Nigerian military ruler, General Ibrahim Badamosi Babangida (rtd). He is married to Halima, the second daughter and last child of the former Nigerian military head of state. Lawal is a Nigerian businessman, entrepreneur and a philanthropist. Polaris Bank, which used to be Skye Bank has a south-west legacy and was then partly owned by Lagos State government. Its acquisition then by Northern interests caused anger in the south west which somehow felt short-changed by that transaction. The thinking then was that Buhari sold it to northern interests, so the North can be in control of one strong bank.

Keystone Bank

However, in the case of Keystone Bank, the ownership and how it was acquired is not clear. But it has a storied  legacy as one of the four largest banks in Nigeria before it was taken over by the Asset Management Corporation of Nigeria (AMCON), through a bridge bank process.

According to an official statement released by the CBN and seen by ARISE News, the action became necessary due to the non-compliance with the provisions of Section 12(c), (f), (g), (h) of Banks and Other Financial Institutions Act, 2020. 

“The banks’ infractions vary from regulatory non-compliance, corporate governance failure, disregarding the conditions under which their licenses were granted, and involvement in activities that pose a threat to financial stability, among others,” the statement read.

The CBN however assured the public of the safety and security of depositors’ funds and said it remains resolute in fulfilling its mandate to uphold a safe, sound, and robust financial system in Nigeria. 

It further stated that Nigeria’s banking system remained strong and resilient.

Sections 12 (1) (C) of BOFIA 2020 states that the CBN Governor may, with the approval of the Board and by notice published in the federal government Gazette, or print and electronic media, revoke the licence granted under the Act if a bank fails to fulfil or comply with any condition subject to which the licence was granted; and 12 (f), “is involved in a situation, circumstance, action or inaction which constitutes a threat to financial stability.

BOFIA further states in Sections 12 (g), that such action could be taken if institutions under the CBN regulation, “fails to comply with any obligation imposed upon it by or under this Act or the CBN Act or any other role, regulation, guideline or directive made hereunder; and 12 (h) is, in the opinion of the Bank critically undercapitalised with a capital adequacy ratio below the prudential minimum or such other ratio as the Bank may prescribe.” 

With the above sections referred to by the apex bank it is difficult know which specific section each  of the banks may have violated that triggered the CBN’s action.

The boards of directors and chief executives of the respective banks had been invited to a meeting that started at about 1pm on Wednesday, where they were addressed for 30 minutes each by the apex bank’s Deputy Governor Financial System Stability Phillip Ikeazor alongside three other Deputy Governors, Emem Usoro, Muhammad Dattijo and Bala Bello.

  It was further learnt that at the meeting, the CBN reeled out issues of non-compliance and other infractions committed by the affected banks before it formally sacked the boards.

Many of the findings were linked to the Report of the Special CBN investigator, who was appointed under Executive Order by Tinubu to investigate the monetary authority and related entities in June last year.

In a text message, the former Chairman, Polaris Bank, Muhammad  Ahmad, confirmed that, “The Board of Polaris Bank of which I used to chair has been dissolved by the CBN.

“While thanking God for his mercies, I am prepared to defend my stewardship anytime.

Essentially, the Special Investigator probing the activities of the CBN, had reportedly recommended that the federal government should takeover Union Bank which was acquired by Titan Trust Bank

James Emejo in Abuja and Nume Ekeghe in Lagos

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