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South-west Governor In Fixed Deposit Scandal - Investment - Nairaland

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South-west Governor In Fixed Deposit Scandal by Babasessy(m): 11:16am On Jun 23, 2011
South-West gov in fixed deposit scandal

A sitting governor in the South-West has been dragged before an Ibadan High Court by the management of a second generation bank, over what the bank described as “fraudulent withdrawal of monies mistakenly deposited in his account.”

The staffers of the bank in a suit filed at state high court, with Suit No. M/60/10 in a matter of an application for an order for the reinforcement of the applicants fundamental rights in Motion on Notice, sought to enforce their fundamental rights, having been arrested and detained by the police on an allegation brought against them by the governor that they fraudulently deducted the sum of N15 million from his account in the bank.

The statement of fact relied upon by the applicant, it was gathered, revealed that sometimes in the year 2007, the first respondent (the governor) placed the sum of N15,432,860.01 in a fixed deposit in the bank for a period of one month with the instruction that the said amount be paid into his current account upon maturity.

It was also gathered that the said investment matured on 20th February, 2007 and the governor’s account was credited with the sum of N15,432,860.01. The banking process of the governor, it was also learnt, was fully automated while postings of funds into his accounts were done by the computer. Unfortunately, the system at that time was experiencing a disruption in its operation and consequently, the system initially credited the governor’s current account on 20th February 2007 and it again credited the same account with exactly the same amount on 21st February, 2007 which was the next day. After the total sum of N30,865,720.02 was credited into the account of the governor instead of N15,432.860.01, the governor withdrew and utilised the additional sum of N15,432,860.01 even though he was aware it did not belong to him.

The bank was said not to have discovered the double credit until sometimes in October 2008, when the auditors came to audit the account of the bank.

Sunday Tribune reliably gathered that the once booming business relationship between the governor and the bank went sore when the bank management wrote to the governor on October 7, 2008 notifying him of the duplication of credit liquidation into his account.

According to the letter, which was signed by the top management staff of the bank and handed to the governor, “We regret to inform you of an erroneous credit into your account domiciled with our bank on the 21st February 2007. On the said date, your matured investment in commercial paper in the sum of N15,432,860.01 was erroneously credited into your account for the second time apart from the same amount credited to the account the same day. In the light of the above, we humbly request that you provide us with a repayment plan of this fund which was recently discovered by bank examiners.”

It was gathered that rather than refund the N15 million in question, the governor, referred the bank to his lawyers, alleging that his account was being manipulated by the officers of the bank.

Worried that the bank could institute a legal suit against him, he was said to have written the bank on October 14, 2009 alleging fraudulent manipulation of his account with the bank.

According to the letter, “This is to confirm my meeting of Tuesday October 13, 2009 with your General Manager, South West. I am disturbed by the debit alert of 13-10-09 confirming that my account was debited with the sum of N15,432,860.01. On further enquiry, I was told that your bank mistakenly credited same amount twice in February, 2007. I have since concluded three subsequent investments totalling 65 million during the same period and operated the account till November 2008 with a credit balance of N237,548.15 and no mention of any duplicated credit, neither was it reflected in my account balance.

“Based on several visitations by your staff, the account was re-activated in October 2009 with a credit balance of N237,548.15 and a cheque of N2.5 million and a bank draft of N25 million. When I re-activated the account, there was no debit balance on the account. Surprisingly, my account was unilaterally debited with N15,432,860.01 after about 2 (sic) years of statement of account reflecting credit balances and no duplicated credit.”

The bank’s reply to the governor’s submission that his account was being manipulated by the bank and signed by top management staff and dated October 14, 2009 stated that “We refer to your letter dated 14, October, 2009 on the above subject matter and we are by this letter sir, reminding you of our two previous correspondences with respect to duplication of credit to you. Please, find attached the acknowledgement copies and the statement of account reflecting same. One of our officers from the head office also informed that he had a discussion with you on the issue during which you acknowledged receipt of the said letters and also informed that you have refered the case to your legal adviser.

“As already communicated in the two letters, the bank erroneously credited your account domiciled with our bank on 21 February, 2007 with the sum of N15,432,860.1 which had already been credited into the same account in the precious day.

“Sir, we humbly state that as an ethical organisation, we would not do anything unprofessional on our customers’ account. Our not passing the debt entry into your account was to guide against debit interest accruals which would have increased the outstanding balance greatly.”

Sunday Tribune also gathered that the governor, through his counsel, wrote to the state police command asking that the case be investigated. Three bank officials were summoned by the legal department of State CID, where they made their statements on oath.

The statement by one of them read thus, “I received a mail from the Treasury Unit of my bank notifying me of a double credit into the account of a customer. We were reliably informed in the mail that the customer’s investment in the bank had matured on the 20th February, 2007, but the account of the customer had been credited twice, that was on 20th February, 2007 and again on the 21st February, 2007. I was instructed to write a formal letter to the customer notifying him of the error made by the bank and to ask him to inform us of how and when he would repay the money since he had withdrawn everything. The amount credited his account was N15,432,860.1 on the 20th February, 2007 and the same amount credited on the 21st February, 2007 next day.”

“I wrote a formal letter to the customer notifying him and attached his account statements showing these double credits and went to his house. When I got to his house, his personal assistant said he had gone out and asked me to call him. I called him on his mobile and informed him that I had a letter for him. He said I should leave the letter with his P.A. and that he would see it. I made the P.A. to sign an acknowledgement copy for the letter and account statement.”

He stated further that, “In December 2008, I was given a letter by my boss from the Treasury Unit of my bank to deliver to the customer. Again, he was not at home. His P.A. called him and he asked me on phone what I came to do. I told him I was given another letter to give to him. He then asked if my bank had not been contacted by his lawyer and I said I was not aware. He told me to drop the letter with his P.A. who also signed the acknowledgement letter.”

According to him, in October 2009, the customer gave a staff of the bank a cheque to pay into his account and on the 13th October, 2009, the account of the customer was debited with the sum of N15,432,860.1 by the Treasury Unit of his head office. The said money was paid in by his P.A. Corroborating the above statement, another bank staff, who was also arrested on the order of the governor, stated that, “I was in my office on February 1, 2010, when three police officers from the state headquarters and a lawyer to our customer, said I was under arrest on a case brought against me and two others by the customer. The case was on N15 million recovered from the account of our customer sometimes in October 2009, under the condition that the customer was owing the bank on a transaction that dates back to 2007 on which the customer had been informed repeatedly to refund the money which he refused. I heard he was erroneously credited, and had spent the money and was unable to refund it until the money was recouped in this account on the said date the money was erroneously credited to his account in 2007.”

Another staff also had this to say: “He had an investment of fixed deposit in the bank, and when the investment matured, the system mistakenly credited him twice. This error was noticed by the bank during audit period by the head office. This, I heard, was communicated to the customer both verbally and in writing. Later in 2009, I understand that he paid some money into the account and our Treasury Unit deducted the money due to the bank. A senior management team was dispatched from the head office to further explain the situation to him. We were informed by the executive management that he agreed that he was owing the bank, but requested that he should be allowed to pay over a period of 18 months, a request which the bank declined.”

The suit, dated 5th February, 2010, according to investigation, by Sunday Tribune, is still pending in the State High Court.


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