Why FHA Mortgage Bank boss is on suspension, by board’s chairman

bank-greeneuropeanjournalone of the allegations against me is correct, says MD

CONTRARY to allegation of unfairness in the suspension of the Managing Director/Chief Executive Officer of Federal Housing Authority Mortgage Bank, Mr. Roland Igbinoba, the Chairman of the Board of the bank, Prof. Mohammed Al-Amin has said the decision to suspend Igbinoba was taken by the Board because of the evidence of “mismanagement,” “corruption” and “abuse of office” against him.

That claim has, however, been debunked by Igbinoba who stoutly defended himself, saying that none of the allegations against him is true.”

In a telephone conversation with The Guardian at the weekend, Al-Amin said the suspension became necessary in order to save the bank from going under due to “the CEO’s operational and administrative inconsistency with regulations as well as his failure to take corrections or implement directives from the Board of Directors despite verbal and written admonitions.”

One of the key allegations against Igbinoba, according to Al-Amin, is precipitated by the queries arising from 2014 Central Bank of Nigeria(CBN)’s Risk-Rating evaluation.

“The CBN reports raised red flag in the operation.

He said it was therefore necessary to suspend the Igbinoba for a period while an independent assessor examines the status of the operations of the bank in order to provide a true state of the bank’s financial standing.

“This will enable a quick action desperately needed to salvage the bank from impending risks,” he told The Guardian.
But Igbinoba dismissed charges of misconduct, saying, “None of the allegations against me is correct.”

According to a report obtained by The Guardian from Federal Housing
Authority (FHA), the parent- body of FHA Mortgage Bank, there is a huge difference between the N226.4 million profit declared by the bank in 2014 with the actual cumulative profit of N64.9 million as at November 31, 2014, a development the board described as “worrisome.”

The report noted further that the managing director granted loans without Board’s approval, and this includes the loan of N35 million to himself in 2014 at a reduced interest rate of three per cent per annum; while staff are charged at 14 per cent. “Yet, the loans are not performing,” the report stated.

The report listed other 10 beneficiaries of the loans granted by the Igbinoba, which failed to meet bank regulations. Names of the beneficiaries are withheld because The Guardian is yet to verify the claim.

A document obtained by The Guardian listed concerns raised by CBN ‘s Risk-Rating evaluation. One of such concerns is that the current composite Risk Rating for FHA Mortgage Bank Ltd is high.

The apex bank also discovered that some loans were being disbursed without proper approvals e.g. account numbers 104/1001319/210 and 104/10068011 and that the bank exceeds the single obligator limit of 5 per cent and 20 per cent of its shareholder fund, thereby contravening Section 5.1(k) of the revised guidelines for PMBs in Nigeria.

Other violations of FHA Mortgage Bank under the leadership of Mr. Igbinoba as revealed by the document are that the bank did not have an approval limit for the various grades of its services despite the board’s Credit Committee recommendation of September 2014; that the bank reportedly lacks credit manual to be used in daily activities, that neither does it have contingency funding plan nor documented business continuity plan, which will guide it on the way forward in case of unforeseen events.

In spite of the seriousness of the issue raised in the CBN supervisory report, the managing director failed to call for an emergency board meeting to discuss the report until a query was issued to him, the chairman said.

“Aside from the CBN report, the Board of FHA Mortgage Bank also finds it curious that the managing director failed to return the properties given to the bank by the parent company to help it meet up with the CBN requirement for recapitalisation towards the issuance of a national licence for the Mortgage Bank.

In 2013, CBN demanded that all Primary Mortgage Banks (PMBs) must recapitalise to a minimum of N2.5 billion for state licence and the sum of N5 billion for national licence.

The FHA Mortgage Bank was caught unprepared as its share capital was in negative position of N269 million then. Therefore, the FHA had to intervene by giving the bank landed properties worth N11 billion and injected cash of N500 million in order to enable the bank meet up with the CBN requirement. Though the bank could not attain to the national licence level, the properties helped it to secure a state Licence.

Since then, FHA has been seeking to reclaim its un-utilised assets given to the bank without success, because the managing director ignored instructions given to him directly or through the Board of Directors. Efforts to get Mr. Igbinoba clarify issues raised in the report were futile.

But, he declared that none of the allegation is correct. “I don’t want to comment on it. All I can say is that none of the allegations against me is correct. But I don’t want to discuss further on it,” he said.

Asked if he knew what the Ministry of Lands is doing to resolve the matter, he said: “I don’t know. It is three weeks now. If they are doing anything about it they would have resolved it. But I don’t want to get into all of that. I prefer to decline comments on this issue because the relevant authorities are already looking into it. The only thing I can categorically tell you is that none of the allegations against me is correct,” he said.

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