The effects of tumbling Oil prices, traumatic Covid-19, coupled with allegations of insider trading might be having telling impact on some Banks. Access Bank says its doors are no longer accessible to 75% of its workforce as it plans a mass sack of 75% Staff, reports Hamilton Nwosa, The New Diplomat’s Head of Business and data tracking desk.
Group managing director of Access Bank, Mr Herbert Wigwe, says his bank is planning to shut its door against 75% of its workforce in a mass retrenchment exercise that is imminent over what he attributed to the shocks and stress arising from the Covid-19 pandemic.
The young CEO who spoke via a podcast in what seems to be a town hall meeting with the bank’s staff, said those to be affected by the mass retrenchment are 75% of the bank’s staff, most of whom are outsourced and are offering “non-essential services.”
He snapped in the podcast seen by The New Diplomat: “We probably don’t need as many securitymen as required, even to the fact that we are not gonna have all our branches open between now and December. We don’t need all the tea girls. We don’t need all the cleaners. We don’t need all the tellers etcetera, etcetera.”
He also drilled down to details: “The second has to do with our professional cost. Now that is one that is very tricky and it is tricky because I do understand and appreciate that its gonna, you know, bring its own pain to staff. We basically have to make the adjustments the same way you sounded when we spoke 10 days ago with respect to basically cutting down cost.
“I will be the first to take the hit and I’m gonna take the largest pay cut, which would be as much as 40 percent. The rest we would have to cascade right through the institution. Everybody may have to make some adjustments of some sort.”
The Access Bank Group managing director further explained that the planned moves are aimed at keeping the bank alive in the midst of the challenging economic upsets occasioned by Covid-19 crisis. Recall that President Muhammadu Buhari had imposed a month-long lock-down in Lagos, FCT,Abuja, and Ogun States in a bid to contain and manage the effects of the covid-19 pandemic.
However, while unlocking the lockdown of the two states and the FCT, Abuja, Buhari had unveiled a phased relaxation of the covid-19 restrictions commencing from next Monday, May 4. The President, however, slammed a total lockdown measure on Kano State.
Correspondingly, on April 28, as exclusively reported by The New Diplomat the Central Bank of Nigeria(CBN) lifted the temporary suspension order it placed on cheque clearing. This action successfully unlocked the lockdown in the banking sector.
Financial analysts therefore find it puzzling, and quite bizarre that Access Bank given its last financial disclosures, is already moving to shred a wholesome 75% of its workforce on account of covid-19 crisis. Some analysts maintain that Access Bank’s decision to shred 75% of its workforce might therefore be a manifestation of alleged internal financial shocks and reported integrity crisis issue already besetting the Bank prior to Covid-19 pandemic.
Recall that in January this year, The New Diplomat had lifted the veil off allegations of insider trading bordering on ethical issues against Mr Wigwe as he reportedly sold his personal shares after Access Bank had announced its closed-period.
Concerned shareholders who spoke with The New Diplomat had hinted that if this reputational and ethical issues were not satisfactorily addressed they would go to all length to ensure that this ethical issues bordering on insider trading were corrected including raising a petition to the the Securities and Exchange Commission(SEC). The New Diplomat had gathered that some shareholders were weighing the option of dragging the management of the bank to the Investment and Securities Tribunal (IST) should SEC fail to act on their petition.
A shareholder who spoke with The New Diplomat at the time in confidence had said: “The bank’s shareholders won’t tolerate a situation where a group managing director would, without shareholders knowledge and approval, suspend a closed-period and begin to trade on the bank shares because the likelihood is that he now has some insider information about the state of the bank that is not available to us as shareholders.”
The shareholder reeled: “ Once a company announces a closed-period, no director or corporate insider is allowed to transact on the company’s shares until the end of the closed-period. But in this case, the MD used his position as Managing director to suspend the closed-period to enable him bring up his shares( held indirectly) for trading. It is unethical. It is unacceptable and it borders on serious reputational crisis at Access Bank.”
The angry shareholder sputtered further: “ The reason why closed-period is in existence or was introduced is to ensure that at the end of the year, every shareholder has seen the books, the financial statements and health of the bank. So in this case, what has been done by suspending the closed-period raises serious concern which borders on insider abuse and might lead to erosion of shareholders confidence.”
Recall also that the Economic and Financial Crimes Commission(EFCC) had quizzed the Group managing director of Access Bank, Mr Wigwe over some assets allegedly belonging to Slok Nigeria Limited, a company owned by former Abia State governor, Chief Orji Uzor Kalu who is currently serving term in jail over charges of corruption.
Investigations by The New Diplomat showed then that Wigwe may have sold well over N240m worth of his personal shares at Access Bank, which were either directly or indirectly held, since early January this year when he was quizzed by the EFCC.
EFCC sources had confided in The New Diplomat that the anti-graft interrogators grilled the Access Bank Managing director over alleged proceeds from the sale of a ship and some assets belonging to Slok Nigeria Limited. Said the source: “We wanted to know where the money from the sale of that ship or asset belonging to Slok was. Where is the money?”
Sources hinted that Wigwe’s decision to sell his personal shares, a development which some shareholders and investors perceived as a curious corporate insider trading on the shares of Access Bank by the GMD reportedly triggered serious panic within the bank with the result that some concerned shareholders had threatened to petition the Securities and Exchange Commission (SEC) over what they alleged was an unethical conduct.
In fact, some shareholders had alleged that Wigwe may have “ as GMD of the bank inappropriately suspended the closed-period to trade on Access Bank Shares as well as used insider information for his personal benefit without first communicating such information to shareholders as a public company.”
With this latest move to sack 75% of its workforce, financial analysts say nobody can say for sure if the GMD of Access Bank had insider information which he failed to communicate to shareholders before allegedly proceeding to suspend a closed-period to trade on Access Bank shares.
Repeated efforts to contact Wigwe to clear the air on this lingering allegations were unsuccessful. The New Diplomat ‘s Head of Business Desk had put a call to his cell no but it rang out.
It would be recalled that in a statement issued by the Bank earlier on in the year following Wigwe’s invitation by the EFCC, the financial institution admitted that the Bank has subsisting issues over Senator Orji Uzor Kalu’s Slok which was granted a facility by defunct Diamond Bank, and that following the recent merger of Diamond Bank and Access Bank, the later naturally inherited Slok’s credit facilities.
The statement reads in part: “ We wish to state that the issues essentially relate to the credit facilities that were availed Slok Nigeria Limited(Slok) by the defunct Diamond Bank Plc(Diamond) and which were secured by Slok Assets charged to Diamond. Access Bank had inherited the Slok credit following the recent merger of Diamond and Access Bank. Given the differing interests of the commission and the bank on the assets of slok deriving from the court’s recent judgment on Slok, the commission had invited for interrogation officials of Access Bank who were handling the bank’s recovery efforts on Slok Credit including its Group Managing director.”
Recall also that this is not the first time Access Bank would be walking the path of controversy. For illustrative purpose, in 2011, the bank was accused of alleged culpability in subsidy financing deals allegedly involving Spog, a firm purportedly owned by controversial businessman and Diezani Alison- Maduekwe’s business ally, Chief Jide Omokore.
The controversial businessman, Omokore who has since been indicted and made to forfeit various assets to the federal government via AMCON curiously had Access Bank as its long-term financier. This development had raised sustainable corporate and ethical questions as to whether Access Bank was actually vetting or scrutinizing Omokore’s firms contracts papers at that time.
Omokore’s wife, one Angela Jones, was a senior top official of Access Bank, and was responsible for Wealth Management section at the bank. Interestingly, another energy company, Ice Energy Petroleum Company Limited which allegedly had Aig-Imoukhuede, then Group managing director of Access Bank, on its board was similarly censured by the House of Representatives for alleged infractions.
Curiously, Spog Petrochemicals which was accused of purportedly importing 3000 metric tones of petrol yet was paid a subsidy for 13,000 metric tones in early 2011 had received strong and patronizing recommendations from Access Bank. For example, in its recommendation letter to the executive secretary of PPPRA, which was dated May 31, 2011 and signed by the duo of Tope Ogunfusika and Ojeifoh Okosun, Access Bank had explicitly stated that it has had a great relationship with Spog since 2006.
