OPINION: How Alex Otti ruined Diamond bank -Emmanuel Chima
Posted by Admin | 5 years ago | 2,948 times
In October 2014, the Board of Directors of Diamond Bank Plc announced the exit of its then Group Managing Director/CEO, Dr Alex Otti, from the bank as he had indicated intention to contest the Governorship position in his home state of Abia. In an official statement released by the Bank's Corporate Communications Department, Chairman of the Board of Directors, HRM Igwe Nnaemeka Alfred Achebe (the Obi of Onitsha) who announced the changes in management, stated that Mr. Uzoma Dozie who was appointed as his replacement has extensive managerial capabilities and is expected to grow the bank.
Igwe Achebe went on to heap praises on the departing Otti for his supposed managerial acumen and wished him well in his future endeavors.
Shortly after the entrance of Mr Dozie, the misjudgment of the performance of Otti became apparent to those on the board of the bank, including Igwe Achebe who has since regretted his glowing tributes to Otti, as it emerged that what was deemed to be sterling performance was indeed a study in corporate mismanagement, outright failure, manipulation of books and cover up of brazen proportions, the most massive type ever executed in Nigeria banking industry.
The revelations were so damning that the new management of the bank sacked every staff that joined the bank with Otti, especially those in its risk management office who were brought in by Otti from First Bank where he previously worked and was equally eased out.
In due course, the board of the bank realized the full extent of Otti’s mismanagement of the bank and a year later had to declare 78% decline in profit as widely reported by many newspapers including Thisday where Otti later pitched his tent as a columnist, after his resounding Supreme Court-affirmed defeat in the 2015 election by Dr Okezie Ikpeazu of the Peoples Democratic Party (PDP).
According to reports presented on the floor of the Nigeria Stock Exchange where Diamond Bank published its audited financial year 2015 and first quarter 2016 results,
while gross earnings growth slowed to record low, N55.2bn credit, impairment charges also led to a 77.8% decline in net income on account of huge exposure of loan portfolio to Oil & Gas (29.0%) and General Commerce (20.0%).
The report indicated that Profitability of the bank remained pressured by loan impairment provisions which arose from previous bad and non performing loans granted in the Otti era. Industry watchers estimated the bad loans granted by Otti to be in excess of N200bn and the bank had to make provisions for them.
Meanwhile, the flamboyant Private jet-flying Otti had revalued assets of the bank in previous years to cover up its operating losses thereby misleading Igwe Achebe, Chief Paschal Dozie and other directors of the bank while he accumulated massive personal wealth in preparation for running for the Governorship position in Abia State with the prime attraction being the immunity clause in the constitution.
Insiders at the bank recount stories of near bankruptcy of the owners of the bank by the activities of Otti which led to Chief Paschal Dozie selling off his shares in MTN Nigeria to refinance the bank. The bank’s management also laid off hundreds of staff in its employ while Otti stashed away millions of dollars made from his back hand deals in USA with the help of proxies.
Even while running for office of Governor in 2015, Otti whose financial war chest almost overwhelmed the ruling party in Abia State, was a regular guest of Economic and Financial Crimes Commission (EFCC), Abuja, where several of his case files remain open.
One of such cases was used by the EFCC to arm-twist him into agreeing with EFCC to be a witness in the trial of former Ekiti State Governor, Ayodele Fayose, whom the agency considers a bigger political fish, in exchange for suspension of Otti’s trial to a later date.
Meanwhile, available reports also indicate that Otti surreptitiously tried to execute a hostile take over of Diamond bank from Chief Dozie using a South African front. The discovery of the plot led to the negotiated exit arrangement between Otti and the Board to allow him a honorable exit from the bank to avoid a major scandal that would have seen to the collapse of the bank in 2014.
Since then, the bank has been struggling to remain afloat with the owner, Chief Paschal Dozie, throwing in everything he worked hard to acquire in his over 60 years of meritorious service and entrepreneurship to save the bank.
It seems Chief Dozie’s efforts are too little compared to the damage done by the famous Champagne drinking and helicopter flying-Alex Otti.
According to The Nation Newspaper report of November 12, 2018, Access Bank Plc is set to add Diamond Bank’s portfolio to its assets in the next few months. The report published in the usually reliable Business News pages of the newspaper states that negotiations on the complete sale of Diamond Bank has reached advanced stage even while reliable senior officials of the bank refused to deny or confirm the story.
“It was gathered that both financial institutions have reached an agreement in broad terms on the acquisition. What is left is the valuation of assets, with a view to determining the level of compensation and systems’ integration, the sources said, pleading not to be named because they are not allowed to talk to the media on the matter.
“It was learnt that the development leading to the impending acquisition was triggered by Diamond Bank directors who approached Access Bank for intervention in a bid to stave off a possible regulatory intervention that could lead to the withdrawal of the lender’s operating licence in the light of the bank’s depleting capital adequacy ratio on account of a huge Non Performing Loans (NPLs) portfolio put at over N150billion.”
A member of Chief Dozie’s family who spoke with us on the condition of anonymity confirmed the planned sale of Diamond bank and accused Otti of “ruining the life of our patriarch who suffered to build the bank from the scratch”.
The source also referred us to several petitions pending at EFCC against Otti in respect of back hand deals with regards to loans given to an estate company in Port Harcourt and a power generating company in the south east region of the country. He also mentioned various money laundering schemes involving Otti and several politicians including those in the ruling party at the center, APC, as well as a former Governor of a south east state who is currently in Europe for medical treatment.
Readers Comments
comment(s)
No comments yet. Be the first to post comment.
