BankPHB EMBROILED IN N17BILLION FRAUD SCANDAL …EFCC ARRESTS THREE DIRECTORS, IAA VICE-CHAIR

MD, BankPHB

In the past three weeks, a whirlwind had swept through the gilded offices of BankPHB. At the last count, three executive directors had been sacked in tow with an unspecified number of other management staff. At the heart of the sweeping sack in the bank is perhaps, one of Nigeria’s most sophisticated white collar fraud, involving a whopping 17 billion naira, and said to have been engineered by Mr. Funmi Ademosun, the Vice-Chairman of Investment and Allied Assurance Company (IAA).

A source at the bank confided that various sums of money totaling 17 billion naira had been parcelled through the accounts of Home Trust Savings and Loans Limited, another company where Ademosun is the chief executive.

“The sums were given out in the form of margin account targeted at shares purchase, particularly for the mopping up of the shares of IAA in the stock market,” The BankPHB insider said. “But it turned out that rather than focus on the IAA shares, Ademosun decided to diversify his investment portfolio by playing on other stocks.”

While observing that there was nothing patently wrong in the bank lending to customer for margin trading, the source observed that 17 billion naira was given out to Ademosun without appropriate management decision.

“The management of the bank as a body was not in the know of the whole thing; those involved exploited their high offices to approve facilities within the threshold of their approving authorities as executive directors for Ademosun’s scheme.”

Stock market operators that are now aware of the sums siphoned from the vault of the bank to Ademosun to target the shares of IAA reasoned that Ademosun, by virtue of his official standing in IAA was engaged in criminal manipulation of the share price of the IAA stock with the money availed him by BankPHB.

“Of course, we all suspected that something was not correct with the IAA shares. This is an insurance company with no branch except its head office branch with various analyses pointing to the fact that the whole business and administrative structure of the company were underpinned by financial engineering. Right from its private placement to its listing by introduction its 28billion units of shares on the floor of the exchange it was clear that some undercurrents were pushing the direction of the shares. It was not until we got to hear of the 17 billion naira funding of Ademosun by BankPHB that I personally understand the whole reason for the movement of the shares of IAA. The money was used to simply mop up the shares at a particular point in time and, thereafter, dump the mopped shares when the price is right,” a stock broker explained.

Troubles, however, burst on to the scene when the market decidedly headed downward, meaning that the shares of IAA would not respond to any form of manipulative manoeuvres even where billions of naira is involved. The BankPHB source said this limited the capacity of Ademosun to pay back and the scandal broke out. In clearing the mess at the preliminary stage, the management of the bank reported the case to the Securities and Exchange Commission who in turn invited the Economic and financial Crimes Commission into the matter.

“As of this week, Messrs. Solomon Omoregieva, Ahmed Kuru and Emma Abugu, all executive directors, had been quizzed by the EFCC and they had been sacked in company with some other members of the middle cadre management who were said to be involved in the scandal. It is believed that these officials compromised and fell short of their responsibility by collectively exposing the bank to a facility of that magnitude. The general belief in the bank is that these officials must have soiled their hands in the transaction,” the source added.