An alleged fraud involving N160 million is set to rock the management of the newly-formed Mainstreet Bank, formerly Afribank Ltd, according to a whistleblower’s report obtained by LEADERSHIP, a week ago.
The money in question was withdrawn from the bank on December 29, 2011, without the knowledge of the board and even some of the executive directors, through a new account created by the management.
Early on, there had been rising tension between the chairman of the board, Mallam Falalu Bello, and the group managing director (GMD), Mrs. Faith Tuedor-Matthews, over the way the bank was being run, which has led to the intervention of the Assets Management Corporation of Nigeria (AMCON), the Central Bank of Nigeria (CBN), and the Nigeria Deposit Insurance Corporation (NDIC).
One of the contentious issues was the appointment of 11 top management staff members of the level of general managers, deputy general managers and assistant general managers by the GMD without the board’s approval, which is in contravention of the governance rules of both the bank and the CBN.
The board of directors frowned on the appointments on the grounds that character checks had not been carried out on the new staff members and that there was a serious imbalance in the appointments, for a bank now owned by the federal government. Of the 11 new staff members, only one is a northerner.
According to LEADERSHIP checks, the fraud was committed by some of the new GMs and an AGM newly appointed by the GMD without board’s approval.
Indicted in the transaction are the group financial officer; the group head, banking operations; and group head, internal control.
The group chief financial officer was accused of putting five debit entries amounting to N159,520,325.13 to the newly created accounts on December 30, 2011.
The group head, banking operations, was accused of authorizing the five debit entries of the same amount and it was under the supervision of the group head, internal control, that the alleged fraud was committed.
It was alleged that nine bank drafts totaling N80 million were issued on December 29, 2011, in favour of Imam Ahmed Nigeria Limited, thus leaving a balance of N79 million in the newly created suspense account. It has also been alleged that there were no documents to support any of the transactions.
All efforts to speak with any of the top management staff members of the bank proved unsuccessful up until press time.
But in an answer to a question from LEADERSHIP, the chairman, Falalu Bello, and another non-executive director claimed ignorance of the event. Both said that no such matter had been brought to the notice of the board.