Skye bank and failure of leadership

I have some very good friends in Skye Bank. One of my good friends used to be their Treasurer before he left. So you can imagine my shock when the news of the CBN takeover of the bank hit the news stands. Of course we had been hearing of the liquidity challenges for sometime and the ravaging effect of the Federal Government’s policy of TSA and how it affected its liquidity position especially, the funds it held on behalf of Lagos State Government.

However my relief as more information is being released is the fact that this was not a case of a hostile market environment leading to this particular crisis but that of poor leadership, weak corporate governance and a deliberate destruction of risk management by the powers that be.

You will understand my concern if you had ever worked in a position of leadership with an overbearing Board. A Board with a separate vision and a mission to pillage and feed the selfish interest of its members against the true vision of the founders of the institution and that of the general public. As I read through the resignation statement of the Managing Director, his helplessness cried out to me.

How do you control a board  determined to wreck the bank on the platform of personal aggrandizement. An insider loan exposure in excess of N100bn with no clear plans to address it but instead pushed into continuous restructuring and interest payment not made is pure wickedness and a major affront at the sensibilities of its depositors and responsible citizenry. The CBN should look into this matter especially in other institutions especially that of the Elephant Bank and make sure that all those involved in this banality are kicked out of the Board and made to work out credible repayment plans before they go into the Skye Bank mode.

This is very annoying and remains very painful especially to the members of the public who have labored and kept their deposits in this bank not to talk of the faithful employees who work so hard to earn a daily living and fulfill their promises to their employers only to be sidestepped by greedy corporate hooligans.

I hear and I hope it is not true that funds went towards the Nitel acquisition and Mainstreet Bank acquisition. If this is proven, the acquisitions should be cancelled and asset returned to the shareholders of Skye Bank who would now sell off to realize whatever is remaining of their funds.

Insider credit is a cancer that kills organizations. It is all the more painful especially hen you consider the fact that these people sit on Boards simply to give themselves and their entities bogus loans while legitimate demands for credit that would fuel the economy and lead to its regeneration are refused. I am happy that the CBN is waking up to this reality and remain optimistic that they would stamp out this leprosy.

 

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