How Finbank directors allegedly used N18bn of bank to purchase own shares.

Former Managing Director of the defunct Finbank Plc, Mr. Okey Nwosu, alongside three former directors of the bank – Dayo Famoroti, Danjuma Ocholi and Agnes Ebubedike, are standing trial for a fraud of N10.9bn.
Nwosu, and the former directors have been standing trial on a 26-count charge by the EFCC since 2003, meanwhile the case resurfaced as a former ex-legal officer with the bank, Elonna Ezulu, testified against Nwosu.

Ezulu, while being cross-examined in court by the prosecuting counsel for the Economic and Financial Crimes Commission, Mr. Rotimi Jacobs (SAN), on Tuesday told the court that it was illegal for any bank to use its own money to purchase its own shares, stressing that he and his team were unaware that the Directors used N18bn of the banks money to purchase its own shares.
“I was not informed that the N18bn of the bank money would be used to purchase its own shares.
“My unit was not involved in the purchase of the shares.

“It’s illegal for the bank to use its own money to buy its own shares,” Ezulu said.

The ex-legal officer, added that the Central Bank of Nigeria and the Nigerian Deposit Insurance Corporation in 2009 examined the bank alongside 24 Nigerian banks, and the examination reports revealed that Finbank, had a loss of N150bn for the 2009 financial year, inadequate capital, weak corporate frameworks, and high ratio of non-performing loans, which leaves the bank at a high liquidity ratio.
He added that in a bid to stabilize the bank, the CBN extended a N50bn seven-year facility to the bank and gave an order that the executive management team be replaced with the CBN appointed management team.

Ezulu stated that despite the grave situations, the bank still approved special packages for the executives.
“Following due deliberation, the board approved special compensation package for the MD/CEO, executives and group executives of the bank.
“The MD/CEO was to be given N60m, the executive directors; N45m and the group executive directors; N35m.
“Members of the board noted with satisfaction that the chairman has done so well to help the bank so the interim chairman was asked to step out of the meeting and the members unanimously decided to compensate the interim chairman with N200m,” Ezulu added.
Justice Lateefa Okunnu adjourned the case till November 6, 8, 9 and 14, 2017 for continuation of trial.