Wema Bank: Multi-Billion Naira Shares Scam Threatens Lender

Wema Bank

By Bayo Bernard

The managing director of Wema Bank Plc. Ademola Adebise inherited a very solid bank in October 1, 2018 when he succeeded Segun Oloketuyi as the chief executive officer, CEO.

As proof that the bank is solid Afrinvest, an investment firm has recommended to stockholders to ‘Hold’on to the stocks of the regional bank as much as they can.

What that means, analysts say, is that Wema Bank stocks remained promising despite market volatility.

According to its 2018 end of year record, the bank recorded a one-year target price of ₦0.57, which indicates a 1.8% upside from the stock’s price of ₦0.56. This record is better than those of its peers in tier-two category.

Profit after tax forthe half year ended 30th June, 2018 was ₦1.57 billion, as against ₦1.22 billion recorded in H1 2017.

Shareholders Panic Over Scam

In spite of these solid fundamentals passed on to him, his predecessors also left him a big liability that has now threatened to dwarf whatever reputation the bank has managed to acquire over the years.

Investigations by the magazine indicate that the management of the bank is deeply involved in tampering with shareholder’s portfolios without their knowledge.

SEC, CBN Launch Probe

This revelation has shocked its investors, it has also shaken the bank to its very foundation while regulatory body, Security and Exchange Commission, SEC, the magazine learned, has launched serious forensic investigations into the allege breach of trust.

The magazine was also informed by competent sources that the Central Bank of Nigeria, CBN has received series of complaints concerning the bank on this matter.

Investors Battle Bank

Sources in SEC told the magazine that shareholders have reported that their shares have been tampered with. The value of the shares is said to worth several billions of naira.

Most instructive is the case of one OseOgunkorode, which has somehow put the bank on the spot.

The investor uncovered a plot by the Adebise-led bank to rob him of over 20,000,000 shares he purchased with his sweat and blood few years ago.

The shares are valued at over N300 million.

How did it all start? In 2008, Ogunkorode purchased 50,000,000 units of Wema Bank’s shares which he fully paid for.

But by 2009, a year later, he decided to sell 20,000,000 units of the shares, just like any other investor so as to profit from his investment.

That was when he discovered that his account has been emptied on the directive of the management of the bank.

Adebise was then the deputy managing director when the scam was committed.

After the discovery the investor promptly petitioned SEC which after investigating the issue directed Wema Bank to restore the ‘sold shares’ to the owner without delay.

The bank has refused to do this rather it has been doing everything to frustrate the investor from recovering his shares.

Ademola Adebise, MD, Wema Bank
Ademola Adebise, MD, Wema Bank

Bank Contradicts Self

Initially, the bank claimed that Ogunkorode did not fully pay for the shares and that’s why they were sold to cover up for the balance.

The bank later backtracked after the investor later provided evidence that the shares had been fully paid for.

Also, a letter dated August 2, 2016, received by SEC from Greenwich Securities, confirmed that the shares were fully paid for and that Wema Bank received the “full value and payment for the shares since 2007.”

When this first attempt failed, the bank turned around to deny earlier assertion that the shares were sold, claiming that the shares were only warehoused until all grey areas have been ironed out with the investor.

Wema Cannot Be Trusted- SEC

For contradicting itself, SEC said Wema Bank has proven that it cannot be trusted as a bank.

Among others, the regulator berated the bank for not keeping records of shareholders’ portfolios.

SEC also said the bank is not acting like a serious business entity.

In the Ogunkorode case for instance, SEC stated that the bank is “weakly attempting to rebut its earlier position that the shares were not sold but warehoused on the ground of non-confirmation of payment for the purchase of the shares.”

SEC said everything about the case proves that the management of the bank has an ulterior motive from the very start when it put the shares up for sale without any express approval from the investor.

“Rather than addressing and resolving “the matter” Wema “engaged in further act of delay and was making several unfoundedand contradicting allegations,” SEC said.

The regulator further states that the bank was only trying to frustrate the case despite its wrongdoing. “Despite the clarity of the issues Wema Bank has continued in its habit to engage in inordinate and deliberate delay, whereupon it failed, refused and neglected to resolve the complaint,” SEC said.

The testimonies by SEC to the Security and Exchange Tribunal, SET will shock any investor, according to Jonas Irabor, a Lagos Lawyer, who said all evidence in the case point to the fact that the bank was only trying to cheat the investor.

Irabor explained that SEC has proven that the management of the bank has something up its sleeve.

According to SEC Wema Bank “knows or ought to have known that the victim” had paidfor the shares.

It said the victim has “suffered deprivation and loss of opportunity to sell his shares at a profit as a result of the wrong committed by” the bank.

SEC said Wema Bank “was aware of the payments for the share all along but was smartly looking for a way” to cheat the victim.

That the bank “Shows serious acts of negligence in handling” the victims” portfolios as it could be obviously observed that it lacks proper and adequate records maintenance culture.”

Analysts Condemn Act

‘It’s very sad that a bank like Wema is entangled in this type of scam, If you cannot secure the shares of subscribers how much more billions of customer money in your custody?

What’s at stake here is trust, whenever a bank loses this it has lost everything. Honestly, I think the anti-graft agency should be invited to deal with this matter, he said.

He explained that the bank already knew it’s impossible to wriggle of the problem, but that it’s only engaged in delay tactics to buy time.

“The bank already understands its guilt on the matter but will not easily admit. Besides, the money involved is huge and they know the victim will eventually be paid, what banks normally do in this case is to trade with the money while allowing the case to drag as much as possible.

By the time the compensation is eventually paid, the bank would have earned interest that it will unlikely feel the impact of whatever is paid to the victim,” Irabor said.

The owner of the shares has remained tenacious to get back what belongs to him despite the bank’s disposition.

Two years ago, the bank decided to resolve the issue amicably after it realized that he was not ready to let go.

Former MD Indicts Predecessor

At a meeting held on August 21, 2017 and attended by some senior staff of Wema Bank including its managing director, it was resolved that the victim should be adequately compensated.

At that meeting, the bank’s managing director upbraided his predecessors for allowing the issue to drag for too long. He was unhappy that the issue was allowed to become a scam.

Surprisingly, Adebise who succeeded him has also engaged in delay tactics to further frustrate the investor.

The magazine learned that this is just one of the many cases as the bank is notorious for underhand shares’ dealings.

Sources at the SEC told the magazine that some shareholders have already reported cases of infraction with their accounts, which SEC is now investigating.

Speaking on the Ogunkorode case, the source said the matter would not have become public knowledge if the owner had not decided to put up his shares for sale.

According to him “This is just one of the many cases against Wema Bank tampering with shares without the consent of the owners. There are series of complaints from shareholders against the bank.”

Uche Obiora, a stock broker, told the magazine that “Wema Bank is very scandalous when it comes to managing shareholders portfolios.”

He explained that many shareholders who are passive about information relating to “their accounts will be shocked by the time they demand for it.

Considering what has happened, I think shareholders of the bank should begin to demand from their stockbrokers to constantly furnish them with day-to-day information about their shares.

Don’t be surprised that Wema Bank could be rocked by serious scam by the time shareholders start demanding records concerning their portfolios. The bank has shown clearly that it does not keep good record about shareholders.

By this whole thing is over, Wema bank may never remain the same again,” he said.

All efforts to get the bank respond to the allegation were unsuccessful. Its spokesman, Adedeji Layade promised to get back to the reporter, he never did.

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