2 Afribank directors resign
LAGOS — Two directors of Afribank have resigned following disagreement between the board of the bank and the Central Bank of Nigeria (CBN) over choice of core investor.
Though the two directors namely, Alhaji Bala Zakariya’u and Emeka Okwuosa, said they were resigning on “personal grounds,” investigations revealed that they probably left as a result of some development in the bank they found uncomfortable. These include the poor financial performance of the bank and the disagreement between the board and the CBN over the choice of core investor to acquire the bank as part of its recapitalisation efforts.
The first quarter financial results of the bank for this year is said to have been worse than the result posted before the intervention of the Central Bank of Nigeria (CBN) in 2009. Many members of the board were also said to have been uncomfortable with this development.
Afribank is one of the nine banks the Central Bank of Nigeria (CBN) assumed control after sacking its management in 2009. The CBN’s reason for the takeover was under capitalisation and mismanagement and needed to be ‘rescued’.
The bank was therefore directed by the CBN to inject fresh funds to shore up its capital base. However two attempts by the board to recapitalize the bank was rejected by the CBN because the Governor was not ‘comfortable’ with the proposals.
A foreign investor that was to bring in funds was rejected by the CBN on the grounds that they once served as consultants to the bank and were therefore ruled out on ‘conflict of interest’. But just before negotiations could be concluded with the investor, the CBN objected with a directive to go to Fidelity Bank.
The board of directors at this point was said to have written the CBN saying that if it would not accept the preferred investor they too would have nothing to do with Fidelity Bank.
Zakariya’u and Okwuosa, it was gathered did not want to be part of this development and hence decided to resign from the board.
It would be recalled that the CBN appointed managing director of Afribank, Mr. Nebolisa Arah was for many years the managing director and chief executive of Fidelity Bank.