President Muhammadu Buhari has been urged to order a probe into the nation’s banking system to weed out the systemic corruption bedevilling it.
This came as the sleaze rocking one of the new generation banks, Sterling Bank, perpetrated by the Managing Director, and the bank’s directors have been uncovered.
Recently, Nigeria’s anti-graft agency, the Economic and Financial Crimes Commission, EFCC, has been on the trail of some of the nation’s bank chiefs over the arms fund scandal.
An authoritative source in Sterling Bank, who wishes not to be mentioned for security reasons alleged that aside the scandal of $88 million illegally collected from the former Petroleum Minister, Mrs Diezani Madueke, the bank’s MD, Yemi Adeola allegedly masterminded the illegal sale of the assets of one of the bank’s clients to his fellow director, Yemi Idowu, after selling the customer’s loan to Asset Management Corporation of Nigeria (AMCON).
The source alleged that Sterling bank needs to have a feel of President Buhari’s anti-graft war, as its MD and directors were self-enriching themselves at the expense of customers.
The source in a statement titled: ”The Sterling Bank Chronicles: Yemi Idowu, Yemi Adeola and Cadogan Estate,” stated that “The world needs to know how the MD and Directors of Sterling Bank are enriching themselves at the expense of their customers. Yemi Adeola is currently embroiled in a crisis over $88 million illegally collected from Mrs Diezani Madueke, but that is not the only scandal concerning Sterling Bank and its directors, and their greed.
“Yemi Adeola masterminded the illegal sale of the assets of one of the bank’s clients to his fellow director, Yemi Idowu, after selling the customer’s loan to AMCON. Rather than transfer the security to the Corporation as required by law, Yemi Adeola sold the assets, 10 hectares of land around Jakande Estate (Circle Mall) in Lekki to Yemi Idowu, a prominent real estate developer and fellow director of the bank.
“The customer was a company called, Grant Properties Limited a real estate company based in Lekki, Lagos, and owner of the popular and exclusive Goshen Beach Estate and Victory Park Estate, both also in Lekki.
“The company took a loan from a group of 4 banks, namely Skye Bank, Wema Bank, Sterling Bank and Unity Bank to finance the development of Victory Park Estate. The company used a 50 hectare piece of land as security for the loans.
“The company also transferred shares in its subsidiary, Knight Rook Ltd, to the banks to hold as security, with the understanding that the banks would return the land and the shares once the loan was settled.
After the project began, one of the directors of the bank started to covet the land which Grant Properties pledged as security. Yemi Idowu, director of Sterling Bank and owner of several estates including Still Waters Gardens, Friends Colony, Bourdillon Court, Milverton Court and Cadogan Estate made an offer to buy 10 hectares of the land but the customer refused to sell to him, because his offer was below the market value of the land. He used his position as a powerful director of the bank to blackmail the client to force them to sell to him.
“As a large shareholder of the bank, Yemi Idowu sat on some of the most powerful committees, including the Credit Committee, the Asset Management Committee, Real Estate Committee among others. He used his position to frustrate the customer’s loan – for instance, after the Board had approved the loan to the customer, he refused to allow the bank disburse to the customer for over a year, just because of his immoral and unethical ambition.
“In one of the meetings, he told the customer, “if you agree to sell to me, I will make sure you get any loan you want from this bank, but if you don’t sell I will make things impossible for you”
“Eventually, the customer was able to draw down their loan and begin their project. The first phase of Victory Park Estate was 100 plots of land and 90 flats, which were oversubscribed. It was a resounding success. Rather than encourage the bank to support the customer, it made the bankers jealous, and they started scheming to take over the project from the owner. The second phase was also over-subscribed.
“The bank’s director Mr. Lanre Adesanya structured a deal to buy over 100 houses in bulk, so that he could resell them later, through a surrogate company called Bena Management Services He claimed that he was representing an unnamed buyer, but he handled all negotiations personally. He bought the houses at 40% discount.
“The customer started construction and everything was going smoothly,until the bank appointed Mr. Yemi Idowu to manage the account. This was a very strange and unusual turn of events, because Yemi Idowu was also a real estate developer, and a direct competitor and rival to Grant Properties. In fact, his Friend’s Colony Estate is located directly opposite Victory Park Estate, which was being developed by Grant Properties.
“It’s also strange that Adeola, MD of the bank, appointed Idowu to manage the customer’s account, even though he knew that Idowu had expressed an interest in acquiring the security of the customer, which could be considered immoral and unethical. Adeola was also aware that Idowu had tried to blackmail the customer to sell their land to him.
“From the day that Yemi Idowu started to manage the account despite the conflict of interest – as a real estate developer, it was wrong for him to be appointed to manage the assets of a customer who was his direct competitor. It was also very wrong because he had expressed an interest in buying the asset that the customer pledged to his bank.
Yemi Idowu deliberately frustrated the project, and after a short while he declared that the project was no longer viable, even though more than 160 homes had been sold off-plan.
“He repeatedly offered to buy the land again and he told Grant that he would only allow the project to be completed if they agreed to sell 10 hectares of their land to him. The customer refused, because Yemi Idowu was offering to buy the land at a give-away price – they told him they would sell to him if he offered them the proper market value of the land.
“The other banks grew frustrated that the project was not moving forward, and once AMCON (the Asset Management Corporation of Nigeria) was established, Skye Bank sold its share of the loan to the Corporation and move on. The Chairman and MD of Grant both met with Yemi Adeola, MD of Sterling Bank, and they agreed that Sterling and all the other banks would also transfer all of the liabilities and assets of the Grant Properties to AMCON, along with all of the outstanding loans.
“However, unknown to the management of Grant, instead of transferring the assets, Yemi Idowu sold 10 hectares of the security to himself, using a surrogate company called Real Estate Development Company of Nigeria (RED). He immediately sold 2.4 hectares of the land to UPDC Plc, earning himself a significant secret profit of about N1 billion.
Meanwhile, they received payment from AMCON for all of the assets and liabilities of Grant Properties, some of which they had already sold to themselves. This was an illegal transaction, and a financial crime, which was expressly prohibited by the provisions of the AMCON Act.”
Continuing, the authoritative source said: “When Grant Properties complained to AMCON, the Corporation investigated the matter. Yemi Idowu immediately offered to refund about N500 million of the secret profit to AMCON, rather than return the customer’s land that he had
“Strangely, rather than insist on the return of the collateral that should rightfully have been transferred to AMCON, the management of the Corporation decided to accept the deal, in a show of solidarity and esprit de corps with their colleagues in the bank. When the erstwhile Board of AMCON learned of these facts, they mandated the chairman (the well-respected banker, Alhaji AK Belgore) to write a letter to the CBN to report the illegal act of Sterling Bank, and the complicity of the AMCON management led by Mr. Mustafa Chike-Obi in this immoral act.
“The crimes of Yemi Adeola/Yemi Idowu and Sterling Bank did not end there however. In order to cover their tracks, they paid the proceeds of the secret sale of the land into Grant Properties account, and they immediately moved the money out to cover the deposit of their director, Mr. Lanre Adesanya, who was rumoured to be fronting for Yemi Idowu and Yemi Adeola. They moved the money out of the customer’s account without a mandate, an act that is both illegal, and contrary to every principle of banking practice.
“Aggrieved at the blatant theft of the assets that they pledged to the bank, Grant Properties took their case to the courts, at which point the Chairman and MD were summoned to a meeting in the office of Yemi Adeola. They expected that the matter would be resolved, due to the previously close relationship between Mr. Adeola and the Chairman of Grant Properties, who was a colleague of Yemi’s older brother, Fola Adeola, one of the founders of GTBank.
“Instead, Mr. Yemi Adeola told them to forget their case because they had no hope of winning their case against the vast resources of the banks. He reportedly told the Awosedo, “I am told you went to court. I would advise you to forget that case because you cannot win. I know that what we did is wrong, but I cannot undo it. And you know we are banks, we have deep pockets. We can afford to delay and frustrate your case for the next 20 years.
“We have over 200 cases in court, and we cannot lose. We have deep pockets, you don’t have enough money to fight us. We can hire the best lawyers, and tie you up in court until you are tired. I advise you to move on sir.”
He also boasted that one of the directors of AMCON was
his former colleague from his Citi Bank days, “he’s like my brother, and he will do whatever I ask of him. If you agree to let go of the land, I will tell him to help you. But if you continue fighting us, he will make things extremely difficult for you with AMCON”.
“Immediately after this, Yemi Idowu started building on the land, despite all the court cases. He has since built Cadogan Estate, comprising of more than 200 luxury flats, and duplexes on this land, despite several court injunctions ordering the parties not to build on the land. He is making billions of Naira from developing the land, while AMCON is putting pressure on Grant Properties to repay their loan obligations,” he said.