Boardroom crisis may cost Jaiz Bank N2bn as directors bicker

The ambition of current Managing Director of Nigeria’s first Islamic bank, Jaiz Bank, Mallam Hassan Usman to retain his position, and a new candidate, Mr. Mohammed Shaheed Khan, who was appointed by the board to succeed Usman, is causing serious conflict in the bank.

According to investigation, both the current Managing Director of the bank and the new candidate have been caught in the bitter boardroom politics of Jaiz Bank.

It was alleged that due to COVID-19 pandemic which ravaged the bank’s board, the current MD fought back to regain his seat while a new appointment was subsisting.

It was gathered that some board members took advantage of COVID-19 infection of some of their colleagues to gain upper hand to reverse the decision of the bank to hire a new Managing Director/ CEO.

The boardroom crisis may cost the bank about N2 billion being the six-month salaries of Khan at $175,000 per month.

Investigation showed that the new candidate, Khan (who is a foreigner) was offered a letter of appointment on August 3, 2020.

A top source, who spoke in confidence, said: “We have a boardroom crisis at hand. The current MD/CEO, Mallam Hassan Usman, was doing well but some directors insisted on change. They asked him to proceed on retirement and set machinery in motion for the recruitment of a new MD/CEO.

“This is the challenge at hand. We are expecting the intervention of the CBN and restoration of peace to the board. The new candidate has written the bank to demand N2 billion as salaries for six months at US$175,000 per month. We may be drawn into a prolonged legal battle.”

A letter to the Chairman of the board of Jaiz Bank, Alhaji (Dr) Umaru Mutallab and the CBN by Khan’s counsel, A. U. Mustapha (SAN) gave insights into how Jaiz ran into a crisis.

The letter, dated 26th October, 2020, was also copied by the President of the Chartered Institute of Bankers of Nigeria (CIBN) and the Secretary of Jaiz Bank.

The letter said: “Khan, who has a Fintech background, strong network and profile, was approached by Jaiz Bank because the current Managing Director was retiring, and the Bank needed transformation (both cultural and digital) to compete with other digital focused Islamic banks and incumbent banks;

”Following his appointment as the MD/CEO of Jaiz Bank, Khan completed all formalities and resigned from his previous job and his resignation was duly accepted by the board of his former employers. He withdrew his children from their current school, donated/sold his furniture, secured a smaller accommodation for his close relations and thereafter, started working remotely for Jaiz Bank.

”But the current outgoing Managing Director of Jaiz Bank, Mallam Hassan Usman, on the 25th of September 2020, after an emergency board meeting,   informed Khan that Jaiz allegedly cannot proceed with the appointment.

“Khan replied by claiming that he had been in contact with the Chairman and Company Secretary as the Chairman had no knowledge of the alleged termination of his appointment and that as an outgoing Managing Director, he lacks the authority to send the correspondence.