Shareholders have petitioned the Securities and Exchange Commission (SEC), Financial Reporting Council of Nigeria (FRCN) and Corporate Affairs Commission (CAC) to investigate Aso Savings and Loans over alleged breach of corporate governance rules and asset stripping in its management of Union Homes which it acquired in 2013.
The shareholders, under the aegis of the Independent Shareholders Association of Nigeria (ISAN), representing minority shareholders in Union Homes Savings & Loans (UHSL), said Aso should also account for over N12bn of recoveries it made from customers of UHSL.
The National Coordinator of ISAN, Moses Igbrude, who spoke at a press conference held yesterday in Lagos, said the association petitioned the regulatory authorities because “Aso Savings has breached corporate governance rules and has failed to act in the best interests of Union Homes and its shareholders.”
The petition, signed by Chuks Nwachuku of Indemnity Partners, lawyers representing ISAN, noted that Union Bank of Nigeria was compelled to divest from Union Homes Savings and Loan Plc in line with the regulation of the scope of Banking Activities and Ancillary Matters No 3 issued on November, 2010, by the Central Bank of Nigeria (CBN) which repealed the Universal Banking Guidelines and required banks to divest from their non-banking subsidiaries.
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Titled: “Re: Disturbing Total Absence of Corporate Governance in Union Homes Savings & Loans Plc and Consequential Rape of the Company”, the petition explained that Aso Savings & Loans Plc was selected as preferred bidder for the divestment and the parties entered into a “Transaction Implementation Agreement together with Union Bank and UH Investment Nigeria Limited (UHNL), a special purpose vehicle set up by Aso to facilitate the transaction.”
According to the petition, significant breaches of clauses in the agreement were committed by Aso Savings. It cited clause 5.1.3.5 which provides that, “Satisfactory evidence that ASO has escrowed with a Nigeria Commercial Bank acceptable to UBN and CBN, the sum of N5,000,000,000 only being the fresh capital that is to be injected into UHSL in consequence of the transaction outlined in the agreement. However, the minority shareholders allege that “ASO never paid the investment amount and has failed to do so.”
The petition also alleged that Aso Savings committed fraud because, “Without acquiring the requisite Scheme Shares of UHSL, ASO and its managers have continued to control the company and strip it of its assets and income. In particular (both of ASO) have to account for over N12,000,000,000 of recoveries made from customers of UHSL over the last 10 years, which is more than sufficient to recapitalise the bank.”
The minority shareholders also want ASO to account for the N1.6bn recovered from UBN Plc in September, 2021, and the recovered N2.5bn from the Lagos State Government in two tranches of N1bn in December, 2022, and N1.5bn in January, 2023.
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