Recession: Top mortgage banks send fake credit alerts to staff, depositors

Recession: Top mortgage banks send fake credit alerts to staff, depositors

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Barely one year after the Central Bank of Nigeria revoked the licences of 21 Primary Mortgage Banks, due to illiquidity, there are strong indications that some PMBs are in fresh crisis.
Some of the banks are battling with several fraud cases due to poor internal control, occasioned by lack of corporate governance and greed on the part of some top managers in the banks.
Investigations by The Point have revealed that both staff and depositors of the banks have been allegedly defrauded by either the banks or their workers.
According to top sources across the sector, many mortgage banks engage in different types of fraudulent activities as a result of mismanagement of funds on the part of some directors of the banks.
A good number of the fraud cases in question, our findings revealed, were also carried out by some marketers of the banks in connivance with their colleagues in the inter control departments. The Point also found that while some of the cases had been reported to the Economic and Financial Crimes Commission and the Consumers Protection Council, other institutions are still living large in the sector, allegedly fleecing ignorant Nigerians.

WE RECEIVE ALERTS BUT CAN’T WITHDRAW OUR ACCOUNTS – STAFF
The assertion by the top executives in the PMB that some frauds are carried out by the management of some banks was confirmed by several employees and former workers of the banks.
A staff of Resort Savings and Loans in its Yaba branch, who pleaded anonymity due to the sensitivity of the issue, told The Point that he had over N700,000 balance in his account with the bank, which is his salary for eight months, but couldn’t withdraw from the fund.
He said all staff received alert of payment of their salaries before the end of every month but each time they tried to withdraw, the teller would indicate that there was no fund in the accounts.
“My rent is due, my children are going back to school in a few weeks and my mother is ill and I have N700,000 in my account that I cannot touch. That is the situation I find myself now. I had made efforts to borrow fund from friends and relatives but the recession made that fruitless,” he said.
Another way some PMBs’ directors/ managers allegedly do fraud in connivance with some marketers in the bank is by diverting depositors’ fund for personal interest. For instance, a former staff of Resort Savings and Loans, (Gbenga), who was among the 100 staff recently sacked by the bank, told The Point that whenever some marketers collected deposits from customers, the funds were usually diverted to pay the directors’ allowances.
He alleged that some printing and certain maintenance checks, especially on company’s vehicles were outsourced to the relatives or contractors recommended by the Chief Financial Officer, Mr. Olayemi Rabiu, who he described as the Chairman’s (Mr. Francis Adefarati’s) favourite. But if the competence of such contractor was challenged or questioned by a junior colleague, the ex-staff of the bank said it might cost him his job.
“When the engine of one of our pool cars almost knocked, one of the human resource managers found that the auto mechanic, who is a relative of Mr. Rabiu, didn’t change the oil when he serviced the vehicle two weeks earlier, as claimed. He reported the case at the police station and almost got him arrested before he was instructed from above to withdraw the case,” he disclosed.
He told The Point that, a few weeks later, the workers were shocked when they discovered that the manager had been suspended while the artisan continued with his contract with the organisation.
He alleged that Rabiu had been a threat to several workers upholding corporate governance in the organisation.
The former assistant manager in the internal control unit in the PMB recalled how the CFO led a move that edged the former managing director out of the bank. “The former MD was forced to embark on terminal leave without specific reasons and Mr. Rabiu, who had collected loans worth over N2 million and failed to refund, had been promoted as the deputy MD,” he added.

OUR FUNDS TRAPPED IN THE BANKS – DEPOSITORS
Though RSL’s staff are lamenting over the outstanding salaries owed them by the company hoping they would be paid someday, the depositors of the bank, on the other hand, are also complaining about their trapped funds. One of them, Alhaja Risi Ojo, who is a textile materials merchant, is confused about her next move after her N400,000 was trapped in the bank. According to her, every time she made deposits in the account through her account officer, she received alert of the transaction. But to her dismay, she almost fainted when she wanted to withdraw N100,000 from her account and one of the marketers told her in confidence that the bank had financial crisis and that depositors’ funds had been diverted by the directors. “I saved the money in the bank in order to stock my store after they had promised me high interest rate if I did not withdraw for six months. Now, my store is almost empty as the bank had refused to pay after one year. I was forced to borrow money from friends and relatives, who had been on my neck to refund,” she lamented.
While the poor trader and hundreds of others lick the wounds of their investments that had gone awry, some subscribers to the several housing schemes introduced by RSL are set to engage the financial institution in a legal battle. For instance, OG Consulting had petitioned the Economic and Financial Crimes Commission over an alleged N750million unpaid deposit by RSL against one of its clients.
The firm alleged that after several meetings with the management of the firm, it paid about N200 million, leaving a balance of N550 million with interest.
The managing consultant of the firm, Mr. Oladimeji Abolaji, said, “The finance house has several times reneged on its promise to pay up the balance on the different dates it promised to do so, thereby lending credence to the possibility that it may be facing liquidity crises. We expect EFCC and other relevant authorities to compel the firm to pay back our client’s outstanding balance.”
RSL is not alone in the fraud allegation saga. Another PMB involved is Centage Savings and Loans. Findings revealed that its branch in Imepe area of Ijebu-Ode, Ogun State, had been involved in alleged scandals about the sale of lands, which had been dragging on since 2009.
The PMB collected N240,000 from 40 of its depositors for a plot of land each at Eruwon, in Ijebu North East and failed to allocate the said land to them. While some had been lucky to get their land five years later, especially the military men among them, others are still waiting endlessly.
“We have been asked to exercise patience as they were not through with the proper documentation of the land. It has always been the same promises that the case would soon be sorted out,’’ Mr. Toye Bello told The Point.

PMBs SHOWING SIGNS OF DISTRESS – EXPERTS
Some economic experts, who spoke with The Point in separate interviews, disclosed that the development was a sign that the MFBs were in distress, attributing the development to lack of focus on the part of the mortgage institutions.
They blamed the firms for their inability to manage their resources effectively without living above their incomes.
The Director-General, West African Institute for Financial and Economic Management, Prof. Akpan Ekpo, explained that most of the banks had bitten much more than they could chew by operating like commercial banks and employing large staff without considering their financial strength.
“They do these in order to stay above competition and claim to be the leader of the sector. They do not necessarily need to employ an Army of youth or open branches in highbrow areas or major cities across the country before they succeed,” he explained.
Like Ekpo, a fellow of the Chartered Institute of Taxation, Dr. Ayodele Esho, urged the PMBs to emulate developing countries like Malaysia in their operations.
Esho said that the financial institutions should drastically trim their cost by reducing their full staff strength and engaging contractbased workers to do the job.
“Mobilise such workforce with basic tools across rural areas in the country. Now that most Nigerians have smartphones, technology and creativity will help them reduce their cost in order to be able to function for the purpose of which they were established.

‘OUR ACTIONS NOT DELIBERATE’
Efforts to get the response of the Head, Legal and HR, Mr. Joseph Jibunoh, were frustrated as the front desk officer at RSL head office in Ikeja refused to disclose his contact details.
But a top source in the organisation, who preferred anonymity due to the sensitivity of the issue, told The Point that RSL’s inability to keep its side of the bargain on the deposit was not deliberate.
“Though the bank is facing some internal crisis, the depositors’ funds are not diverted. We are committed to best practices and we will like to appeal to our clients to be patient as we are working at ensuring that we keep our own side of the deal,” he disclosed.

EFCC may invite directors soon
Efforts to get an update on the Economic and Financial Crimes Commission’s investigations on the cases mentioned above from the spokesperson of the anti-graft agency, Mr. Wilson Uwujaren, were abortive as he failed to respond to the text messages our correspondent sent to him.
However, a source in the antigraft agency told The Point that the body had already launched investigations into the alleged fraud cases levelled against the PMBs
The source added that the EFCC would soon invite some of the directors of the financial institutions for interrogation on the matter.

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