Saturday, 11 January 2014

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ACCESS BANK OF FRAUD

The Central bank of Nigeria (CBN), is currently investigating an alleged huge financial malpractice involving Access Bank Plc. The Presidency ordered an investigation into the books of the bank sequel to allegations by Lucratel Nigeria Limited that Access Bank used unconventional means to syphon close to a billion naira of monies deposited into its account with the bank.

Lucratel, an indigenous telecommunications engineering firm, reputed for the building of cell sites having built over 300 of such got a contract from LM Ericsson sometimes back. A tripartite domiciliation agreement between parties was agreed where all monies for the job were to be paid by Ericsson to Access Bank for Lucratel to use in carrying out the job.

To facilitate the delivery of the assigned tasks, as Ericsson paid, Access Bank hid details of all monies paid into the account, gave Lucratel impressions of borrowing the firm monies while Ericsson did not pay thus, consistently making the company to be in permanent debt. Conflicts arose between customer and bank. At a point, the bank went to the Federal High Court in Ikoyi-Lagos and deceived the court into giving her some reliefs.

They used the reliefs to take over the company and needed to go for the collateral of the company. Justice James T. Tsoho then demanded evidence of service of the court processes on the client before he would grant the interlocutory injunction. At this point, they served Lucratel.

For once, the company got details of purported insider of their account. They got a Forensic Chartered Accountant and a law firm whose reports showed insider manipulations of the bank and how the bank had planned from inception how to rip the company of its hard earned monies.

INCEPTION :
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Frank Abayilo, a telecommunications engineer, and the Managing Director of Lucratel specializing in providing Telecommunication Support Service such as construction of Base stations (Cell Sites) in Nigeria and abroad, having built over 300 Base stations or Cell Sites across the geo-political zones of Nigeria for different reputable Network Operators in Nigeria, got a contract awarded her by Messrs LM Ericsson for the Construction of Telecommunications Cell Sites for several locations at over N1,114,166,328.12 (One Billion, One hundred and sixty-six million, three hundred and twenty eight hundred, twelve kobo).

Access Bank Plc approached his company with a proposal to finance the contract through a Credit facility vide Project Financing. The parties settled for the Credit facility of N291 million for a period of 180 days based on the proposal vide an offer letter dated 10 th August 2005. As a result, Access Bank Plc got payment of the proceed of over N2.8 billion from LM Ericsson and other network operator contracts made to Lucratel by virtue of the Tripartite Domiciliation agreement.

Lucratel, on request, submitted all the relevant papers for its verification and due diligence on the proposed financing arrangement to Access Bank Plc. It was on the strength of this that the bank approved the loan facility of N291m and used the proceeds of the facility to open the Account.

The bank used the cash proceed from the LM Ericsson contract, which was secured by the Domiciliation Agreement, as guarantee for the facility. Upon demanding that LM Ericsson Nigeria Limited be made to sign into an irrevocable Tripartite Domiciliation agreement thereby domiciling all payments with respect to the project directly to the Bank, Messrs LM Ericsson had initially expressed reservations entering into a tripartite agreement, not being convinced of the bank's commitment due to the attitude of Nigerian Banks, and their unwillingness to support the development of private companies even in lucrative projects.

Part of the agreements reached between parties is that the loan was to be paid only from the proceeds received from LM Ericsson Nigeria Limited as the contract proceed was enough to repay the interest on the loan, and sufficient to cover the profit of the bank, as guarantee for the loan was the proceed of the contract.

One of the weaknesses of the agreement was that the bank was solely responsible for the financial management, advisory services and administration of the Ericsson contract proceed making the bank receive all payments from LM Ericsson without any recourse to Lucratel.

Thus, the bank kept all records of payment received, and up till date failed and refused to avail their client a report on their account. It is noteworthy that as part of the financial management and advisory responsibility of the bank, she mandated all contractors and suppliers of Lucratel's telecommunication materials to open accounts directly with Access Bank in the same branch as the client, thus, making so much money courtesy of the client's interest.

The bank paid all the suppliers and contractors directly from the client's account without recourse to them. When conflict arose, the bank failed and refused to render all accounts to the client of payments received on the project and the state of its account profile and status.

Our investigations show that Lucratel's loan facility of N291m issued by the bank had an inflow from LM Ericsson within the tenure of the loan in excess of over N500m collected by the bank for that period which ordinarily fully paid back the loan and the interest on the account.

CORPORATE GOVERNANCE :
Lucratel at a point got a statement of account unilaterally compiled by the bank which confirmed receipt of all relevant payments by Pay Advice slip from LM Ericsson to cover the loan facility. The bank was accused by its client that the latter intentionally placed its account in debit using illegal software.

Lucratel accused Access Bank of having gotten an all time payment from LM Ericsson, MTN, V-Mobile and other jobs of theirs to the tune of N2,459,043,208.18k as against the bank's claim of N1,291,427,742.72k as disclosed by their bank statement. These figures were from Access Bank's statement. From this, it is clear that Lucratel and Access Bank are clearly in dispute.

Legal interpretations from lawyers contacted but who, because the matter is already before a court refused to be named said, “it is trite law that when a bank and a company are in dispute, the issue of receivership cannot arise.”

Access Bank Plc knowing this abandoned the spirit and letters of the law to appoint one Olurotimi Williams, a Receivership firm, to undertake the receivership of Lucratel.

Access Bank Plc had approached the FHC Ikoyi where they misled the court into giving them an interim order. This order was what they used in firming the appointment of Olurotimi Williams whence they invaded Lucratel on the 30 th July 2010, took their files, documents, computers and other allied properties.

Meanwhile, Lucratel had written a petition to the CBN months before this setting asking for investigation of the conducts of the bank. The CBN maintained a studied silence of collaboration.

JUSTICE JAMES TSOHO :
Access Bank Plc returned to the court to seek for the interlocutory injunction. That was where the presiding judge, Justice James Tsoho, demanded to know if the parties in the matter had been served. He ordered they must be served. That was how and when Lucratel got documents the bank took to court on the 3 rd August 2010.

That offered the company insight and appointed a forensic chartered accountant whose reports opened the unethical banking practices of Access Bank Plc in this matter. Lucratel's lawyers responded to Access Bank's 32 paragraph affidavit with a 132 paragraph reply.

When the court resumed on the 15 th October 2010, the bank asked for more time to file their response.

On resumption on the 25 th November 2010, they applied for more time and the judge granted same and adjourned to 26 th January 2011.

As the court day nears, operatives of the Ikoyi office of the Economic and Financial Crimes Commission (EFCC) based on alleged complaints from the bank set net traps for Abayilo and his counsel. Operatives were in court but could not get their targets. Neither could we also get in touch with the clients.

ABAYILO SPOKE FROM EXILE :
According to Lucratel's Managing Director, Frank Abayilo, whose phone numbers were not going through and upon receiving our e-mail called on phone with a number which is obvious he spoke from a foreign country.

The long interview which lasted for about one hour gave us deeper insight and understanding. He said in reply to a question, “Access Bank employed negative internal banking policies through the use of banking software perpetually configured to place our account in debit, including wrong posting, entries and double charges and as such all payment received from Messrs LM Ericsson throughout the duration of the project was made not to be enough at any point to put our account in credit.

He accused Access Bank of “single handedly bringing and introducing Westcon Wireless Limited to the project and imposed her on us as the sole company from where we were to purchase towers, shelters & other cell site materials, for the execution of the LM Ericsson's project. The bank was responsible for paying Westcon Wireless Limited directly from the loan facility with them without recourse to us. The records are there to show.”

FORENSIC ACCOUNT:
The forensic financial consultant, Mr. Edward Adeolu, of Alphabeta Consultants & Management Services, was engaged by Lucratel Limited and Mr Frank Abayilo to carry out a detailed forensic financial analysis of their account No. 0140010016704 with the Access Bank Plc. The final analysis showed the instances of the acts of mismanagement of their account with the bank.

The forensic analysis, already pleaded in court, and made available to us, showed that Access Bank is liable to refund all funds as charged as excess charges, unauthorised charges; deliberate wrong posting and unauthorised withdrawals and entries into Lucratel's accounts and the mismanagement of the contract proceed from LM Ericsson.

Asked why he did not ask the bank for reconciliation, Abayilo said, “on several occasions, we requested a joint meeting to reconcile the accounts with them in order to determine the exact amount of profit due to us from the contract proceeds. The bank consistently and carefully avoided, but I always knew that the loan had been fully paid and we are not indebted to the bank.”

He added, “in 2008 Access Bank strangely refused to oblige giving us full details of the total proceed of the contract or oblige any such reconciliation meeting, but prefer to issue controversial statement of Account which does not in any way explain the issues raised by us, and we had successfully disputed the previous statements on each occasion.

“In response, we carried out a variation of the work we did for Ericsson upon request by them, the payment for the variation work was delayed by Messrs Ericsson for months to the knowledge and understanding of the bank who fervently followed up with the payment from Ericsson.

“Ericsson eventually paid the sum of N74 million as full payments thereof. But as soon as the bank received the payment, it immediately received same and returned our account into debit of less N74m.

RESTRUCTERED FACILITY :
Abayilo in the interview explained that the Bank, through some of its top officials, the Deputy Managing Director, Mr. Herbert Wigwe andMrs. Iyabo Soji-Okusanyacoerced and forced us with subtle threat to sign a restructured facility. Based on false pretence that the facility was being restructured to a term loan of N650m to part-finance the acquisition of minimum stock for 50 cell sites to be maintained in our warehouse.

One thing is obvious that the restructured loan was signed under duress and on the pretence that we will be given the funds if we get another project, a ploy by the bank to escape CBN and NDIC regulatory checks and supervision. The bank merely used the restructuring as a decoy to repackage their unauthorized charges in the name of part-financing stocksfor cell sites when they knew that we were no longer building cell sites for Ericsson and so stocking cell sites materials was abstract.

The bank lied and never released any sum out of the purported N650m for the purchase of stock to us, and no such stock were ever purchased by the Bank to our knowledge and consent. We also at no time ever bought stock of any value from funds derived from the restructured facility.

Rather some of the Bank staff including Mrs. Iyabo Soji-Okusanyaat several times coerced our store keeper to try to inflate stock review in a bid to shore the value of the alleged stock so as to avoid the query and investigation of the Central Bank.

In addition, the bank ensured and supervised the illegal and unprofessional manipulation of our account and intentionally ensured that we never received all the relevant banking documents and statements of accounts required to carry out an independent financial/Forensic investigation on the account so as to establish the exact financial position of our account.

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BREACHING THE LAW :
The account of Lucratel with Access Bank Plc has been dormant since 2008 when LM Ericsson failed and delayed to pay for certain jobs that had been duly executed and completed. According to Abayilo “the Bank is fully aware of this state of fact, as no further payment was received by them from the contract proceed. Since then, LM Ericsson has not awarded to us any further job and rather than close the Account, curiously however, against Banks and other Financial Institutions Act (BOFIA), Access Bank kept generating interest in expectation on the dormant Account against the policy of the CBN and I think that is economic crime which she is liable to be investigated and sanctioned by the EFCC.”

Access Bank merely used our account as a cover up to its books of account. They use our company account to shore up their share holders funds and misled the CBN to believe that Access Bank have an un recovered debt valued at over N1.2b, even when they knew that the account has been dormant due to mismanagement, manipulation of our accounts and all manners of fraud.

They manufacture artificial figures, imaginary debits and fraudulent postings in the account and flawed finance tactics deployed to frustrate us from deriving any profit or credit from the LM Ericsson contract valued at N2.8 billion. We have suffered severe damages and loss as a result of the breach of banker-customer relationship due to the bank's professional misconduct exhibited in the management of our accounts.

Follow up and refusal of the bank to provide a proper statement of Account to us led us to brief a firm of Chartered Forensic Accountants and Auditors – Abu Adah & Co.who requested for the statement of account, credit advise and all relevant books of account. Access Bank Plc refused to oblige us any of the documents.

After taking a careful analysis of some of the doctored statement of accounts submitted by Access Bank, the firm of auditors, Abu Adah raised an alarm and alerted us on the need to request through them for some crucial documents relating to our account.

The documents include: Interest rate chargeable on the banking finance, tenure of such financial support, Level of approval for the financial support, type of category of financial support, minutes of meetings or details of discussion precedent to the approval of such financial arrangements. Pre-determined or schedule of principal and interest repayment, Relevant assessment of financial risk made by Access Bank Plc. (these should include copies of APG, performance bonds, Insurance covers etc where obtainable), evidences of waivers where granted, any other documents to support bank approvals.

THE CENTRALBANK'S ROLE :
Following the refusal of Access Bank to release the statement of account, credit advise and other relevant books of account, we also briefed the firm of Gaul–Gate Law firm to request for the same documents, the bank again failed and refused to reply any of the letters or release the documents till date.

“Since we got irked by the failure, negligence, refusal and antics of the bank to accede to the request, we sent a petition of financial misconduct to the Central Bank of Nigeria (CBN) for proper investigation of the breach of Banker-customer relationship based on mismanagement of the account, illegal, unauthorised, multiple and excess bank charges, conversion of client's funds for unauthorised purposes and theft perpetrated by Access Bank”.

The delay of the CBN to investigate the grievous allegations against the bank led us in writing another petition to the President of the Federal Republic of Nigeria dated 26 th August 2010. The President through one of his Senior Special Advisers forwarded the petition to the CBN to investigate the issues.

SELF ADMITTANCE OF FRAUD :
However, we eventually discovered that the statement of account issued by the bank which formed the basis of the debt that they seek to recover is different from the other statements of accounts submitted to us in piece meal. The bank in a later statement showed that the previous one they availed us contains very strange and curious figures/transactions in the account hitherto unknown to us including wrong posting, unauthorized payments, double entries and unilateral withdrawals by staff of Access Bank to pay suppliers and some unknown persons.

The deliberate refusal, failure and negligence of Access bank and its staffers to provide all the relevant documents required to audit and ascertain the financial standing of the account is a breach of the Bank/Customer relationship that they owe us.

Access Bank has sufficiently exhibited the highest level of bad faith, poor management skill, lack of vision, non-existing risk management strategies and flawed financial tactics all pre-arranged to defraud us of our hard-earned resources from the LM Ericsson contract.

Access Bank Plc from the onset clearly worked out a scheme to defraud and have indeed, defrauded our company to the tune of over N1,112,074,057.97k by the statement of Account and pay slip advise provided by them.

It is very clear that from the bank statement presented eventually by the bank, shows that a total sum of N1, 168,067,325.04k meant for project execution was used for operations, payment to contractors, staff salaries and interest. While we generated cash inflow of N2,459,043,208.18k as revenue and advances to the account between the periods under review (1 st January 2006 - 9 th June 2009) shown in the statement of Account, we received only one loan facility of N291, 000,000.00k in 2005 which was covered by the debenture and has been repaid in full with interest.

Now, the total loan and advances given to us by Access Bank Plc as captured in the bank statement subject to verification is N1,164,000,000.00k. (Inclusive of revolving) and the interest paid by our company on the loan is N796,431,000.00k.

Asked how much the bank can be said to be owing his company, Abayilo said, “thebank is owing us thesum of N1,112,074,057.97k as at the close of the account under review based on the statement of account as shown in the independent financial report and statement or reconciliation. I also know that we are also entitled to a credit of N548,834,070.82k as the difference between the amounts posted as debit as at 30 th January 2010 as opposed to the sum of N742, 593,673.90k which is the purported sum in the enclosed statement on the date.

Contacted on phone, Access Bank Plc's Corporate Affairs Manager, Mr. Segun Fafore said, “I am aware that the matter is already before a competent court of the land and it is only fair and professional for us not to make any comment on the matter.”

On the side of the Economic and Financial Crimes Commission (EFCC), the spokesman, Mr. Femi Babafemi said, “I am not in the picture of the case. From the environment of the case, it is obvious. That a matter is before a court of law does not mean we cannot invite or arrest the client for further interrogation that can help in properly deciding the case.”

Efforts to reach the officials of the CBN's Corporate Affairs department before going to press did not yield result as their phones were seemingly permanently switched off.

QUESTIONS FOR CBN AND GOVERNANCE :
1. From our investigations so far, it is clear that Access Bank Plc got over N500m payment from LM Ericsson within the first 6months of the tenure of facility they gave Lucratel. So why did the bank not use same monies to liquidate the facility? Yet, the bank was taking commission on the loan while having Lucratel's money (as paid in by LM Ericsson). This is a case of criminal fleecing of the client and double taxing;

2. If the issue of refusal of Access Bank Plc to release details, documents and accounts for forensic investigation is true, then, it establishes a premeditated dilution of the company's profit;

3. Given (1) and (2) above, the corporate governance ethics of Access Bank Plc is embedded in a scheme of sham by the directors of the Bank showcasing false profits, carefully deceiving their shareholders with such practices like this, assuming that several other companies and individuals would have been destroyed in like manners;

4. Where then comes the CBN quarterly audit checks on Banks? Independent sources revealed that most of the Directors in the CBN are actually directors in these commercial banks which is why they protect and cover the banks when there are such reports like Lucratel. They will usually advise such complainants to go and find an arbitrative middle point, such that the client will still end up paying a substantial portion of such monies to the banks;

5. Upon getting an interim order from Justice James Tsoho's court, the bank moved in to take over Lucratel's office, documents and computers which were allegedly destroyed. These were probably in the bid to destroy the evidences of the client in prosecuting their case in court. No wonder they deliberately misled the court in the first instance to wrongly give them the order. The judge was just meticulous in asking to be given evidence of service on the client;

6. Is the law, in this case, BOFIA, meant for the ledges? This question is pertinent in the face of Access Bank Plc keeping a non-performing account for more than two years and charging 45% interest. There should be more than meet the eye in this instance;

7. How and why did the CBN ignored for more than six months the petition of Lucratel's counsel thereby allowing Access Bank Plc to “kill” a Nigerian company whose annual salary account runs in the region of N200m per annum? Those workers and their families would have become social fodders today;

8. How on earth did Access Bank Plc using a tripartite domiciliation agreement employ to herself the sole right to collect proceeds into the account, stole the inflow of cash, collected commissions and interests severally on a facility of N291m and still doctored a “fake” N297m loan into the accounts of the company?

9. For Access Bank Plc to have resorted to a professional excuse of “erroneous charges” which they claimed to have compiled but CANNOT find the client who is represented by a legal firm and a chartered accounting firm tells a story that is conscripted to end well.

10. Is this not how Access Bank Plc and their other ilks in the industry have been inputing “erroneous charges” into the accounts of their clients especially the big bag clients? Yet, they come round tripping accounts and declaring profits without investing or supporting real economic functions that will make giants out of our economy;

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