Business

Access bank breaches corporate governance, loses N49.48m to contravention

Published

8 years ago

April 10, 2017

Olu Emmanuel

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as shareholders express dissatisfaction

By Chioma Obinagwam

Access bank was caught in the web of contravening good corporate governance after the bank lost a whooping N49.48 million to penalties imposed on the bank for regulatory contraventions for the financial year ended December 31, 2016, which stirred up negative reactions from its shareholders.

Reacting to the issue, shareholders under the aegis the Zonal Shareholders Association at the bank’s 28th Annual General Meeting(AGM) held in Lagos recently, expressed dissatisfaction over the amount of money expended on the penalties.

Corporate governance broadly refers to the mechanisms, relations, and processes by which a corporation is controlled and is directed; involves balancing the many interests of the stakeholders of a corporation.

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Speaking on behalf of the shareholders, Secretary of the association, Mrs. Oludewa Thorpe said that there was need for the board of directors of the bank to make frantic efforts to curtail expenses derived from contravention, which according to her is on the high side.

“We should look at our contradictions. They are a little too many. The board should reduce the amount spent on penalties,” she advised.

A breakdown of the contraventions and penalties include a sum of N24 million charged for the penalties on AML/CFT examination and a sum of N18 million in respect of risk-based supervision examination imposed by the Central Bank of Nigeria(CBN).

Again, the bank paid N6 million to the CBN, for three violations: N2 million penalty with respect to the rendition of reports on Politically Exposed Persons(PEP); N2 million penalty for failure to conduct enhanced due diligence on directors of some customers; as well as N2 million penalty for usage of general/blanket PEP approval for a particular customer.

More so, a sum of N1.475 million penalty was paid to Securities and Exchange Commission(SEC) for late submission of annual report.

Although the bank declared a dividend payout of 65 kobo per share for the year under review, translating to an interim dividend of 25 kobo per share and a final dividend of 40 Kobo per share, she noted that it would have added more dividends to the shareholders had the contradictions been properly managed.

On his part, the Managing Director(MD) of the group Herbert Wigwe, while reacting to the shareholders’ concerns, promised to look for very best ways to reduce the penalty to zero.