By Adebayo Adedeji

Same day when the CBN served Bolorunduro a cold breakfast, the state government submitted a petition to the CBN, inadvertently calling for a review of a business transaction that took place in 2013 when Bolorunduro was Commissioner of Finance. In the petition signed by Governor Ademola Adeleke, CBN was accused of bias and a plot to give entire control of the board as well as management of LivingTrust Mortgage Bank to CitiTrust Holdings Plc.

The governor claimed CBN “is on a special mission to give upperhand to CitiTrust.” He alleged CBN officials from the Other Financial Institution Supervision Department (OFIS) committed infractions while regulating the bank.

This piece will focus on two issues raised by Adeleke in his petition, which, to my reasoning, are fundamental to addressing the issues at hand:

That LivingTrust Bank has departed from its socio-economic development roles since 2019 when the SHARES ( “shares” here is capitalized for emphasis) of the state were sold to CitiTrust Holding Plc.

That the Memorandum of Understanding and the Shareholders’ Agreement signed by the two parties in LivingTrust in 2024 should not have been implemented by the apex bank but rather by the parties themselves.

The first allegation that the Osun State’s shares in LivingTrust Bank were sold to CitiTrust is untrue and unfounded. This narrative is part of the propaganda of the state government to soil the reputation of ex-governor Adegboyega Oyetola and project him as an economic ruiner who sold the wealth and legacy of the state for a pittance and pecuniary gains.

If there was any share of the state sold in LivingTrust Mortgage Bank, it was done in 2013 when Oyetola was not yet governor. Oyetola was governor from 2018 to 2022.

The administration preceding Oyetola, in 2013, went to the Nigerian Stock Exchange to raise N1.6 billion in share capital to ensure LivingTrust Bank, which previously was wholly owned by the state, met the N2.5 billion capital baseline set by the CBN for mortgage banks. Bolorunduro, was the finance commissioner who supervised the capital market processes at the time. Following the privatisation, 60 per cent of the bank’s shares were divested to Morgan Capital Securities Limited and UniCapital Limited, while the state government retained 40 per cent.

It was this 40 per cent equity that was inherited by the Oyetola government, which was neither depleted nor sold for the four year Oyetola was in the saddle. However, during the period Oyetola was governor, the private investors in the mortgage bank divested 40 per cent of their 60 per cent to another company, CitiTrust, upon which Adeleke and his men are struggling to tarnish the image of the Minister of Marine and Blue Economy. The readers are invited to answer simple investment questions: could an investor direct another investor whom to divest its equity? The answer is no. Could Osun State Government under Oyetola have stopped Morgan Capital and Unicorn Limited from selling their shares to CitiTrust when the industry regulators had no objection to such an arrangement? NO. So, why should Oyetola be held responsible, as Adeleke is clearly doing now, for a transaction that was long completed before Oyetola assumed governorship?

The second allegation that the CBN should not have “interfered” in the implementation of the MOU signed in 2024, to accommodate governance structure reservations raised by the Osun State Government and other investors in the mortgage bank, is preposterous and disheartening. The suggestion of the state government is no doubt a continuation of the anyhowness that has become the order of the day in Osun.

If not, the governor would not have opined that the CBN should stand aloof while warring parties do whatever they like. Allowing the two parties to implement an MOU would have been an invitation to chaos in the management of the bank.

The rejection of Bolorunduro as chairman of LivingTrust by the CBN appears to be a well considered decision, which would bring back sanity to the bank and engender mutual co-existence. Until his appointment by Adeleke in April 2024 to replace Alhaji Adebayo Jimoh, a seasoned administrator and erstwhile chairman of Oodua Investment Plc, there was relative peace in the bank. Bolorunduro’s coming, which many saw as economic disaster given his recent bad image, distasteful politics and controversy that engulfed his tenure as finance commissioner in the state, was a whirlwind which blew the state no good.

The transparent financial management experienced during the administration of Oyetola, an experience which gave room for nomination of decent and experienced professionals to represent the state, thus duly contributing to the bank’s growth, was truncated when Adeleke assumed office. Under Oyetola, the fortunes of the bank, which was on the path of imminent collapse, were brought back to life, amounting to surge in the bank’s profit to N676.6 million, representing 347 per cent increase, in 2021, and revenue to N1.6 billion, an increase of 149 per cent in relation to the 2020 accruals. LivingTrust’s unaudited 2021 report also showed that total assets grew by 80.2% to N11. 35 billion, up from N6.3 billion. In 2021, the bank, for its stellar performance, earned the prestigious Africa Mortgage Bank of the Year award.

Meanwhile, one would have expected Adeleke to pause and take stock of his relationship with Bolorunduro, particularly following the embarrassment he courted the state government on the wrangling with Segilola mining company, where he advised the state government to demand a humongous N65 billion from the mining company for unpaid taxes and investment returns, a claim which has since been proven misleading and false; but strangely, Adeleke continues to act brazenly against industry regulations, threatening to disobey the directive of the CBN that three directors mandated to seek CBN approval “will continue to be on the Board (of LivingTrust)” in contravention of the CBN’s dictate.

Perhaps Adeleke thinks the CBN is annexation of Osun State. The directives of the CBN are clear: that the state should produce another nominee to replace the rejected Bolorunduro; that the three directors, who are representing Osun on the board of LivingTrust, should seek approval from the apex bank; that the Commissioner for Finance, Osun State, Olusola Ogungbile, who is a non-executive director in the mortgage bank, should execute Code of Conduct form.

The state government should comply with the simple and harmless requests of the regulators. Adeleke should not take to the corporate world where the state risks heavy sanctions and unmitigated consequences.

• Adedeji writes from Osun.