Extend Wema’s recapitalization deadline, shareholders urge CBN
By OMODELE ADIGUN
Monday, February 8, 2010

Wema Bank Plc’s shareholders have called on the Central Bank of Nigeria (CBN) to extend the June deadline handed down to the bank to raise its capital base to N200 billion.
The shareholders, who made the plea at the bank’s Annual General Meeting (AGM) in Lagos on Friday, based their arguments on the prevailing economic situation in the country and the short notice given to it by the apex bank to raise the colossal sum.

According to Mr Adebayo Adeleke, secretary of Independent Shareholders Association of Nigeria (ISAN), the apex bank should take into consideration the illiquidity situation in the economy and should not stampede the bank into taking the road it has not traveled before.

His words: “CBN should not overstretch our efforts at a time like this. Everybody knows the financial situation in the country right now. And suddenly, you want to stampede the us into bring an amount we never raised in the over 60 years of our existence [as a bank]. CBN should give us enough time to do whatever needed to be done to bring the bank back to where it should be.”

Speaking in the same vein, the Chairman of Ibadan Zone Shareholders Association, Chief Aderemi Oyepeju, said that the June 30 recapitalization deadline for Unity Bank and Wema Bank is not enough. “Give us up to December to recapitalize. Even during consolidation period when banks were required to raise just N25 billion, enough time, about 18 months, was given to them. Five months from now is not enough for us to raise such a huge amount,” he added.

However, the Chairman of the bank, Chief Samuel Bolarinde, assured the investors of his readiness to convey the message to the CBN boss, Mallam Sanusi Lamido Sanusi, saying “If we can’t meet the June 30 deadline, we will all march to the CBN to ask for an extension of time.”
It would be recalled that Wema Bank was on the list of four banks found to be in grave situations, as far as liquidity is concerned after the conclusion of the special examination of the 24 banks in the country as announced on October 2, 2009.

The rest are Bank PHB Plc, Equatorial Trust Bank and Spring Bank Plc.
After a careful consideration of the matter, Sanusi said that he decided to take a number of measures aimed at arresting the grave situation of the four banks. Among them was his “order to the board of Wema Bank Plc to recapitalize by June 30, 2010 to the tune of N200 billion.”

Giving reason for not taking over the bank like the other eight in that category, he explained that “Wema Bank Plc came under new ownership and management in June 2009, who took over a bank already in a grave situation and should not be held responsible for the present condition of the bank.”
He promised that CBN would work with the bank to ensure a successful completion of the recapitalization exercise.