Stella Dimoko Korkus.com: Unity Bank In N3.4bn Tangle With Ex-MD,Falalu Bello

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Tuesday, March 18, 2014

Unity Bank In N3.4bn Tangle With Ex-MD,Falalu Bello


PLEASE TAKE OUT TIME TO READ THIS AND THANK ME LATER...


Unity Bank Plc is in a N3.4 billion ($21.067 million) foreign exchange tangle with its former Managing Director, Alhaji Falalu Bello, now Executive Chairman at MBS Merchants Limited.
The bank in a petition to the Central Bank of Nigeria (CBN) is alleging that Falalu Bello unilaterally approved for his company the said amount to import fertilizer for which he is now foot-dragging payment.




Irked by this development, the management of Unity Bank petitioned the CBN over the matter alleging violation of corporate governance by the former managing director.


The petition sighted by Financial Vanguard and signed by Ahmed Yusuf, Acting Executive Director, Enterprise Risk Management and Umar M. Adamu, Divisional Head, Legal and Compliance, with Ref. No UB/L&C/UMNHJSIMB5FB/02l14,dated 3rdFebruary, 2014, to the Governor of CBN said: “We hereby humbly write to bring to your notice instances of Violation of Code of Corporate Governance. Sometime between June to September 2013, three Deferred Letters of Credit(LCs) totalling $21,067,500.00 were opened in favour of MBS Merchants Limited(the Company). Particulars of the LCs are as follows (see table):
S/N.        LC No.                    LC Value            Confirming Bank       Beneficiary

1.   UB/13ILC/056      $10,500.000.00  Deutsche Bank       Platinum
         
2.    UB/13ILC/064     $5.305,500.00    FBN London           Platinum

3.    UB/1L 1068                     $5,262,000.00    FBN London
                                 
TOTAL-                                 $21 ,067 ,500.00                       

“The LCs were for the importation and supply of fertilzer (the goods). It is worthy to note that there was no formal application and/or approval for the  LCs.
The former Managing Director, Alhaji Falalu BelIo, used his influence to get the LCs opened without adherence to laid down rules and regulations of the bank.



“For the records, Alhaji Falalu Bello is the Executive Chairman of the company and also its alter ego. Not only did he use his position to influence the opening of the LCs, he also flagrantly refused to ensure adequate and sufficient cash collateral at the maturity of the LCs. This was in spite of several demands from management.
“Without doubt, this irregular action of the former managing director has undoubtedly caused the bank a lot of reputation risk with our Correspondent Banks-Deutsche Bank and FBN London.


“As a result of the improper way the LCs were opened, i.e. not authorised, the Board only came to know about the matter much later. This was when the Correspondent Banks became agitated and increasingly kept demanding for their money.
Thus, to quickly salvage likely unpleasant consequences from the Correspondent Banks, the Board quickly directed that one of the Term Loans of Alhaji Falalu Bello be used to reduce our commitment with Deutsche Bank. This was quickly done. Being a long standing business partner, we are presently managing the situation to ensure that residual balance is paid as quickly as possible.          .




“On the bank’s commitment to FBN London, the Board approved that a Credit Line for the company be established in the sum of $1,530,000,000.00 and same be used to effectively settle the bank’s commitment to FBN London. This was immediately done and the account was fully cleaned up.
“Further, in order to ensure full recoveries on the company’s account, management has directed that all the three warehouses be taken over so that sales of the goods could be directly channeled to the company’s account. Unfortunately, instead of Alhaji Falalu Bello to assist the bank towards meaningful recoveries, he negatively scares away and blocked all prospective buyers.



In fact, what is more worrisome is the established fact that Alhaji Falalu Bello has gone about de-marketing the bank amongst its long time customers and friends.
“Being a former managing director of the bank and by virtue of Section 20(5) of Banks and Other Financial Institutions Act, 2004 as amended, all borrowings associated with him or his companies are regarded as insider related.
It is on this premise, therefore, we catalogue the following as infractions: using his former office and influence to process and approve the LCs without adherence to the laid down rules and regulations of the bank; his refusal to fund the company’s account at the point of maturity of the LCs.
This was in spite of several entreaties and demands by the bank; his attitude to scare away prospective buyers of the goods, thus frustrating our efforts towards quick and genuine recovery and frustrating the bank’s business by de-marketing it amongst its long time customers and friends.
“It is in consequence to the above that we hereby invite the apex bank through your humble self to appreciate and note this unfortunate development.
“Meanwhile, it could be gleaned from the ·above, that the bank is doing everything reasonably possible to ensure that we settle our obligations with Deutsche Bank, while we continue to vigorously tackle the company and its executive chairman for the total liquidation of the indebtedness.”


MBS denies arrest of Falalu Bello
However, a statement issued by MBS Merchants over the weekend admitted that Bello was invited to the Office of the Inspector General of Police (IGP) in Abuja to clarify issues in connection with a petition by Unity Bank Plc to the Central Bank of Nigeria (CBN) and the IGP.
The statement said the petition was based on three deferred letters of credit issued by the bank on behalf of MBS Merchants.
“In this regard, the MBS has answered all CBN enquiries on the matter. Also, Mallam Falalu Bello was invited by the IGP to discuss the same issues involved, being a recipient of the same petition.
Based on his position as chairman of MBS, Bello equally answered the invitation of the IGP just as he did that of the CBN so that such high level discussions between the parties involved will bring closure to a matter, which is basically a financial transaction between two parties that have been business partnersfor over seven years,” the statement said.
Mallam Falalu Bello retired as the group managing director of Unity Bank Plc on June 30, 2011, and was shortly afterwards, appointed chairman of Mainstreet Bank, one of the three banks nationalised by the Sanusi Lamido Sanusi-led Central Bank of Nigeria.


The former Unity Bank MD also contested the governorship of Kaduna State under the platform of the Peoples Democratic Party (PDP) but lost the primary election to the current vice-president, Namadi Sambo....culled from vanguard

  

25 comments:

  1. I didn't complete it, my eye is itching badly and the story is boring. Will revisit it later...EEE!!!

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  2. Hmmmnnn, corruption everywhere, but the good thing is that 98% ends up bing caught!

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    1. Being caught or having justice served, which?? The more corrupt you are the higher you are celebrated.

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    2. Thank God u're using ur real name again. So good to have u back. Will hit u up soon for my birthday cake.

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  3. 21 million dollars? wonderful...

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  4. Na wa o! Money dey dis country o


    Your comment will be visible after approval

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  5. This big men are the cause of Nigeria's problems.

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  6. This useless man was once MD of Habib Nig Bank ltd, he pursued a policy of tribalism and nepotism to the detriment of the bank promoting incompetent mallams to high positions.He behaved like a saint but we knew he was milking the bank dry. With 3 wives many concubines and plenty children his only option to maintain his lifestyle was to do something like this.During his tenure at the bank he so inprovished the staff while his cronies were growing fat. unity Bank should go after this greedy Buffon Fast.

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  7. Unity bank don recharge eh we dey make people jolly, banking don easy.. *singing and dancing*

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  8. The cumulative impact of corruption,bad economies,(driven by politics)and incompetence is what Nigerians suffer from today.Every position is seen as a medium to oppress and to assume total-veto power because of their selfish and political reasons.
    I can help but marvel at the point where they was no formal application or approval for the LC's,the LC's were opened with adherence to the laid down rules but Mallam Talale Bello skipped protocols,same thing happened with Stella Oduah's BMW saga,same thing happened with SLS Approving some funds to northern universities without the senate consent,its so obvious that our leaders use every appointment given to them to steal and use it to run political for positions. No wonder they all love paper work aslong as it increases human interaction where bribes can be exchanged.This looting is of the same process as SLS,NNPC,Stella Oduahs,Kerosene subsidy,all just for political gains, that's why they keep recycling or they resign and run for governorship elections.

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  9. Lolz, unity bank! Falalu has always been disregarding the rules of banking whenever he wants anything, term loans etc no due process is followed cos it's falalu bello especially in that headoffice branch in abuja. Sanusi has gone now that's why this is coming up. Let's watch and see

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  10. So why do you have the picture of Sanusi with hands on his head, thats a graphic misrepresentation. It actionable in court. i hope you know.

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  11. The rich are getting richer by the day. God help us hmmmm!

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  12. This is an improvement. Naija go better. At least people are speaking out more. How can to do that to a whole bank?

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  13. Stella wetin come be this one naa. I was waiting to know why I wan thank you later and I no see anything. Take ya time oh. Nothing de happen where all these men de. We go just read and read and rant like craze people and nothing de happen to them. Infact eh, I pray I wake up middle of this night cos my prayer point go change oh. God should strike any corrupt man in this country who is putting untold hardship on its people oh. If na to de die like ijiji, na dem sabi. Starting from all those responsible for the deaths on saturday or whatever dem call dem oh. So long as God is on the throne, it shall come to pass oh. Since when we pray for repentance from our enemies. Since they refuse to repent, death shall therefore be their portions. How can a few people hold the nation to ransome? It is not right.
    Make I set my alarm for this night!

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  14. *ransom* o jare

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  15. Do we caption this one as former bank MD turn fraudster abi wetin now?? He's trying to game the system because he knows how it works. He should be in jail by now instead of writing this love letter.

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  16. Madam stella what am I thanking you for?
    With all these grammar...oyinbo po
    I didn't finish it

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  17. Mola mola mola
    These breed of insatiable animals only understand one thing, how to destroy anything that is put on their hands tufiaaaa
    No right thinking human being should entrust these Northerners with anything delicate walahi

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  18. How did he use his influence to issue these deferred LCs without due process as claimed in the petition? According to the story, Alh Falalu Bello left as MD in 2011 & the LCs were issued between June & sept. 2013, clear 2 years after! Does it means the current board & credit committee still defer to him even when he's no longer in the bank? Who exactly authorized the issuance of the LCs without cash collateral? Definitely not Falalu. So the current board is very much culpable.

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  19. I jumped through trying to see any sex scandal. NOTHING. Abeg,boring. I hear abt figures every working hour. I visit blogs for Scandalous gossips.

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  20. Anonymous 7:22, its obvious tribalism is more than just your problem. With your below average intelligence quotient, this discourse is intellectually out of your league. Have you had something to eat today cos that can only be the reason for your misguided aggression and your idiotic opinion on what has rather been an interesting debate!

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    Replies
    1. If na hausa person dey correct all these oyibo yeye grammer, no bi Nigeria you dey. So na debate about another criminal? Fool!!

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    2. @ Meena too much grammar
      Look around you and be truthful and come back and thank me later. There is hardly any parastatal that molas head that are not driven under by tribalism and nepotism.
      I have no issues with you just stating the obvious!

      Delete

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