The Securities and Exchange Commission (SEC) has been urged to nullify the merger between Access Bank Plc and Diamond Bank Plc which took effect in March 2019.
SEC was advised by Chief Don Etiebet, a former Minister of Petroleum, to nullify the consolidation, not because the merger threatens fair play in the banking industry, but because of an on-going court case against Access Bank Plc and its Chief Executive Officer, Herbert Wigwe.
According to Daily Trust, Etiebet made the request in a petition written to Securities and Exchange Commission, notifying the stock market regulator of an impending court case against Access Bank Plc, Mr. Wigwe, and other executive directors.
According to the petition which is dated March 19, 2019, Etiebet said his decision to seek for a nullification of the merger was in pursuant to the provision of Section 124 (3) of the Investment and Securities Act 2007 which ‘empowers any person to voluntarily file any document, affidavit, statement or other relevant information in respect of the merger’.
Etiebet’s argument: Etiebet accused Access Bank Plc and its executives of hiding the criminal charges against them from SEC and other regulators like the Central Bank of Nigeria (CBN). He further argued that if the regulators had knowledge of the case, the merger would not have been approved.
This can affect the Access Bank and Diamond Bank merger
Etiebet’s petition to SEC against the merger can see the approval of the consolidation withdrawn if SEC discovers Access Bank Plc truly hid the fraud case from regulators.
Etiebet based his argument on the provision of Section 127 of the Investment and Securities Act 2007, which states that;
“The Commission may revoke its own decision to approve or conditionally approve a small, intermediate or large merger if the decision was based on incorrect information for which a party to the merger is responsible and the approval was obtained in deceit.”
Access Bank clarified stand in the Fraud case
In March 2019, Access Bank Plc released a statement clarifying the company’s position, including that of its CEO and Directors. The Bank claimed that it actually reported the case first to the Police Special Fraud Unit before a suit was filed against Access Bank.
In the statement, the management said in 2015, the bank made financial provision for a customer — Metal Steel Products Limited — to import billets and other machinery used for the expansion of the customers’ factory. But following the arrival of the imported goods, the company, (i.e, the customer), went ahead to clear imports without first making some necessary payments.
This prompted Access Bank Plc to report the development to the Police Special Fraud Unit, which obtained a court order for Access Bank to take over Metal Steel Products Limited’s business operations.
Adding that the lawsuit was instituted due to the misunderstanding between the Registrar that took charge of the property and Metal Steel Products Limited.