Undoubtedly, Union Bank is one of the very few companies where the workers own controlling shares of the shareholders fund. It may also have been the only company where such feat has received the least respect from the powers that oversee the industry. The development is sending very bad signals to the government on the efficacy of Lamido Sanusi’s banking sector reform gamut. A lot of anxiety is building across he length and breadth of the bank, writes NIK OGBULIE.
IS it possible for an investor to invest in a bank where staff are co-investors without the staff buying into the arrangement ? Is it also possible for the CBN to be the regulator and the manager and still enjoy the confidence of the public ? These questions are, no doubt, tormenting the soul of many who are currently grinning over the level of uncertainty that has beclouded the banking industry which has a good quantity of its value in the pangs of the few banks that are battling for existence since the last ten months. There is no doubt that the federal government, the CBN , Union Bank management and a good number of the top management of the embattled bank may go naked soon as the great battle to possess or repossess the bank beckons.  In fact, the countdown to the battle for the soul of Union Bank has really begun. Unless the federal government wades into it , the result that will come out of it will make any ear that hears the misfortune it will bring to the Nigerian economy o tingle.
The grand-finale may have stated to unfold as very brisk, technical  and illogical background has been seen as very convincing precedence for the result that is being expected. Mathematically, the plot looks sound and clear but logically it is just about figures signifying nothing. The near emergence of a preferred bidder after some secret bids indicate that the bank’s management and the CBN may not care about whatever happens to the majority shares of the over 7000 strong Union Bank staff that own some 30 per cent shares of the bank. But this is the Achilles heel of the entire gamut of the purchase plan. It is like a devil’s alternative. The mathematics from where the picture of a distressed Union Bank was packaged and being sold may be lacking in all theorems and has rather become an eye-opener ..

Imagine this presentation
• That the bank needs as much as N360 billion for it to get back to business and this means that the management is looking for a core investor that can shore up this level of fund.
• That the bank was involved in asset-backed lending to 10 companies valued at N250 billion which the bank and CBN has classified as losses .
• That the bank has made provision for N84 billion for pensions and gratuities for its workers pay-off
• That the bank has made provisions for unbalanced books for N75 billion.
A careful insight into these presentations made by management to the bank’s stakeholders have been seen by members of the organised labour and professional financial analysts as very inarticulate and a poor way of providing a bad name in an  effort to deprive Union Bank workers and other Nigerians the privilege of taking decisions that will enable them forge ahead with their investments in the bank. For instance, the assumption that some N250 billion worth of  assets-backed lending is a loss is quite unimaginable as those borrowers are companies like M.R.S OIL and GAS where Union Bank was a leading member of the financing consortium that provided the fund for the purchase of Chevron downstream operations which is known today as the biggest acquisition deal of the last one year. Today , MRS is cruising well with the investment and CBN has not cared to find out if the investment has collapsed . Some other banks that are part of the MRS deal but are not part of the bailed-out banks do not have their books queried for this transaction. The other company in this group is Arik Airline whose three newest biggest aeroplanes were financed by Union Bank and they are fully registered with Nigerian Civil Aviation Authority (NCAA) in the name of the bank.These aeroplanes are still new , serviceable and are making money for Arik. Another beneficiary of the loan is Capital Oil and Gas which runs one of the most sophisticated tank farms and oil services equipment in West Africa today. There are others which are mostly industry leaders in the Nigerian economy today. The effort by the CBN and Union Bank management to assume that these lending are lost, even when the companies are industry leaders in their sectors, explains the mindset of the CBN management and those of their gatekeepers at Union Bank.
As if that was not enough bungling of all the known technicalities in financial reporting, the bank  also tried to sell to the stakeholders the logic that they have made provision for N84 billion being the cost of the final entitlements of all Union Bank workers as if all the workers will be disengaged the same day. This particular cost paints a picture that indicates that the management may have not really been thinking in line with the criteria on the ground which many see as the main issues that have made Union Bank quite distinct from what obtains in the other bailed-out banks. There is nowhere in the life of any existing corporate body where every active staff is deemed to be retiring at the same time even in situations where there is massive retrenchment. For the management to make such dubious provision vindicates the fears and assumptions of the workers who claim that there has been a grand design to exclude them from all plans o recapitalise the bank. Why N84 Billion, are the workers going to resign en mass ?
There are strong indications to believe that what the shareholders need to raise is just the N120 billion which CBN gave to Union Bank and this can be easily raised by the shareholders at the current share price of the stock in a rights arrangement where only any leftover can be warehoused or underwritten by any advisor. The belief that the bank needs some N360 billion is a part of the blackmail that makes the Union Bank situation quite difficult so that the is shareholders will appear helpless.
This development may not be cheering to the investors ,most of whom are Union Bank staff who have in the last 10 months suffered various degrees of salary cut and denial of access to credits while 13 of the new employees brought in from other banks have their loans worth over N600 million repurchased by the same Union Bank management that has refused any kind of loan to its workers. What would anybody expect in a situation where cousins have been brought in to head very sensitive positions like Information Technology.
Since 93 years of the bank’s existence, there are indications that it has very big assets and nobody is talking about it as a factor in the ongoing recapitalisation debate. What the CBN has so far been doing to justify their claims over the financial health of the bank is to play down the quality of its  fundamentals or hide them from those who can ask questions. Many odds are in favour of Union Bank. Among all the bailed-out banks, it is only Union Bank that its executive directors have been cleared of any infraction or charged for any fraud related offence. This is an indication of the quality of people who are working for themselves as owners and who also know what awaits them when their company does well. This is why it is still good for them to have a say in the future of a  recapitalized Union Bank.
According to leaders of shareholders groups, “the CBN has encouraged lawlessness in the industry. Those who appointed Lamido Sanusi should call him to order before long.”