cosmos maduka exits access bank

Dr. Cosmas Maduka

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Maduka’s tenure as non-executive director on the Access Bank board ended after the Central Bank of Nigeria, CBN’s hammer fell on the bank for alleged insider abuse and flouting of corporate governance rules. The CBN had accused Access Bank of granting loans, in excess of the amount allowed under financial regulations, to Maduka and two other directors, Mr. Gbenga Oyebode and Mr. Tunde Folawiyo. The regulator said the bank flouted Section 20(1) of the Banks & Other Financial Institutions Act, BOFIA, 1991(as amended), by awarding credit facilities to firms linked to the trio, in excess of its (the bank’s) single obligor’s limits.
The single obligor limit is the percentage of its shareholders’ fund that a bank can grant to a single customer as loan at any particular time. The credit ceiling was part of measures introduced by the CBN in the wake of the banking crisis of 2008, to limit banks’ exposure to a particular entity, and in essence, reduce risk.
For the said loan infraction, the apex bank slammed penalties totalling N3m on Access Bank. “Contrary to the CBN circular No. BSD/9/2004 of 16 July 2004, which stipulates that credits to directors and their related companies shall not exceed 10 per cent of the paid-up capital without the CBN approval, the bank (Access) granted to its following directors – Mr. Gbenga Oyebode, Dr. Cosmos Maduka and Mr. Tunde Folawiyo – facilities in excess of 10 per cent of its paid-up capital without the necessary regulatory approval,” read a CBN statement detailing the infractions.
Maduka’s ouster comes on the heels of a petition by two minority shareholders of Access Bank, Godfrey Onyeka and Godfrey Obiamalu, accusing the bank’s board of bending the rules in the granting of loans to Maduka and two other directors.
The petition, dated 21 January 2013, and addressed to the CBN Governor, Sanusi Lamido Sanusi, was endorsed by counsel to the aggrieved shareholders, Ime Asanga and Co.
It read: “Our clients have become aware of fraudulent credit facilities made by the bank to three of its directors – Dr. Cosmas Maduka through two of his companies namely: Coscharis Motors Ltd and Sure Comfort Limited here in Nigeria, to Mr. Gbenga Oyebode and Tunde Folawiyo. Our clients are desirous of protecting their investments in Access Bank and ensuring that returns on those investments are not unnecessarily depleted, especially when easier, cheaper and more readily available local remedies are provided for under BOFIA.
“Accordingly, we have our clients’ instructions to make this complaint to you with a prayer that you invoke the clear provisions of Section 20(6) of BOFIA to recover from the directors of the bank the full amount involved in the obnoxious credit facilities as well as cleanse its Board and Management by removing all the Directors.”
But Access Bank quickly tried to put a spin on the loan scandal and Maduka’s ouster by claiming in a statement that the ex-director of the bank only retired from its board, having completed the 12-year term stipulated by the CBN’s Code of Corporate Governance for banks.
A statement jointly endorsed by the bank’s legal adviser, Fatai Oladipo, and its head, Media Relations, Segun Fafore, maintained that contrary to media reports, Maduka left the board on completion of his tenure, adding that “the allegation that he was sacked was spurious, baseless and a tissue of lies”.
The statement further said: “As you may be aware, Dr. Cosmas Maduka had been on the Board of Access Bank since 2000 and therefore in line with the CBN policy on Banks Directors tenure, which stipulates that no Director shall serve more than 12 years, his tenure expired and he ceased to be a Director of the Bank effective December 2012, having served meritoriously in that capacity for the maximum period allowed by the Central Bank of Nigeria’s (CBN) Policy.”
The bank insisted Maduka’s retirement from its board had nothing to do with the outcome of the CBN’s risk-based assessment of the bank that took place in 30 September 2011. “We, therefore, find the report that he was removed by the Central Bank of Nigeria (CBN) disturbing as his retirement from the board has nothing to do with the apex bank’s directive to the bank on the outcome of the risk-based examination of September 30, 2011 as reported,” the statement added.