Aigboje Aig-Imoukhuede, former group managing director of
Access Bank, says officials of the Central Bank of Nigeria (CBN) delayed the
approval for the acquisition of the lender in 2001 on account of age.
He and Herbert Wigwe, his friend, had signified their
intention to acquire the bank but were considered “two young” by the banking
regulator.
Both of them were 36 when they made what was regarded as an
audacious bid.
Aig-Imoukhuede gave an account of the acquisition in his new book, ‘Leaving the Tarmac: Buying a Bank in Africa’, to be launched on Friday.
THE QUEST TO BUY A BANK
In achieving of owning a bank, he and Wigwe, both working
with Guaranty Trust Bank (GTB) at the time, had engaged industry experts, key
stakeholders, and shareholders of their target list of banks.
They also appointed a team of advisers consisting of lawyers
and investment bankers for support through the process.
The professional banker said his team of advisers led by
Albert Okumagba, the late chief executive officer of BGL Securities, had tagged
the quest “Project Festival”.
Aig-Imoukhuede said their quest was becoming futile as they
found out that their preferred candidates, which were banks that were doing
fairly well by industry standards, were too expensive for us to be able to afford.
“On the other hand those that were affordable were either in
very bad financial condition and/or operated with values and philosophies which
were inconsistent with those we believed in,” he wrote.
However, despite the setbacks they both encountered, “we
kept on going, refusing to give up, which is quite possibly the most
fundamental rule of true entrepreneurship.”
THE CHOICE OF ACCESS BANK
Aig-Imoukhuede explained that Access Bank was entangled in a
CBN investigation regarding widespread malpractices in foreign exchange, which
involved a number of Nigerian Banks.
He said the opportunity was flung open when the bank
attempted to raise over N1 billion through a public offer for subscription in
the latter part of 2001.
“Despite the fact that we conducted no due diligence, doing
little more than a ‘back of the envelope’ analysis, we found Access attractive
for a number of reasons.
“Firstly, its board of directors included men of integrity
who were well-respected in business circles.
“Secondly, the bank was quoted on the Nigerian Stock
Exchange, which implied some minimum standards of governance, and thirdly, its
financial safety indicators did not point to an institution that was on the
verge of failure.
“While our decision to take up the unsubscribed shares was
in effect a leap of faith, it was our belief that since we would be controlling
the management of the Bank we were recapitalising, the risk of losing our
investment was almost entirely in our own hands.”
Aig-Imoukhuede said to meet up with the N1 billion public
offer, an additional N800 million had to be raised, since he and Wigwe had only
to N200 million as at that period.
“Once we had raised the money, we then had to make sure that
the recapitalisation comply with all relevant laws of the country.
“We ensured that every step we took in consummating the
acquisition was consistent with legal requirements and would meet the
expectations of the Securities and Exchange Commission (SEC), the CBN and the
Nigerian Stock Exchange.”
TERMED TOO YOUNG AND MERE BANK PROFESSIONALS
After the public offer was approved by SEC, rumours had begun to spread across the financial space that the bank had been bought by “two young guys” from GTB.
“If we had hoped to be welcomed with open arms as Access
Bank’s potential saviours, we were soon to be brought back down to earth,” he
said.
“The board and management, though having realised what was
happening, adopted a defensive posture. They did not buy into the idea of our
approach at all, labelling our actions a hostile takeover.
“Never before had there been a case where ‘mere banking
professionals’ could have the temerity to take on established captains of
industry and buy their bank. It was unheard of.
“We did face one regulatory challenge in our move to acquire
Access Bank and this was the issue of control and management. This was an issue
for the Central Bank of Nigeria to determine.”
REFUSAL TO APPROVE BY CBN
Notwithstanding that members of the board of governors at
CBN knew Aig-Imoukhuede and Wigwe personally, yet “we still had to convince
those below them that we were qualified to run a bank, including the Director
of Banking Supervision, Ignatius Imala, who was known for his conservative
thinking and a tendency to be very suspicious of young bankers.
“Nonetheless, though I had acted as CEO of GTB in the
absence of the MD and the DMD, even though both Herbert and I possessed strong
professional track records, Mr. Imala still had his doubts and refused to
approve our appointment as MD and DMD.”
He compared Imala’s refusal to approve the acquisition to
the colonial era where a test was conducted to determine if a child was old
enough to go to school, which involved asking the child to put one hand over
their head and touch the ear on the other side, whether intelligent or not.
“It always seemed to me that Imala adopted a similar thought
process when it came to deciding whether or not to approve our appointment,” he
said.
“He stood alone against everyone else around him resolutely
refusing to give an explanation for his decision and without his approval we
would remain in limbo.
“Luckily for us he didn’t ask us not to run the bank, he
simply said he would not ‘approve it’.
“We were two young men with no godfather behind us and I
think Imala found it hard to believe that we had managed to pull off the
acquisition of Access Bank without some hidden power pulling the strings behind
the scene on our behalf.
“He suspected there was a catch to this seemingly audacious
acquisition and chose to take his time approving our appointments, assuming if
there was a catch it would soon reveal itself. How wrong did we prove Imala to
be.
“Despite this hitch we had become the owners of the bank in
March 2002. At that time I was still only thirty-six years old, but I already
had had ten years of senior management banking experience at GTB.”
Finally, their long quest came to an halt on April 17, 2003
and they assumed control of Access Bank; however, the approval was granted on
the condition that it would be in an acting capacity for two years.
“I knew that I was ready to run my own bank, but the
policies regarding regulatory approval for me to become chief executive were
then rather obtuse and for over a year I ran Access without the stamp of the
Central Bank’s formal blessing,” he said.
“After the approval on an acting basis of April 2003, I was
not confirmed in the post until 2005, at the end of the two-year period.
“Although this delay was enormously frustrating at the time,
it would eventually work to my advantage when the CBN changed the rules and
announced that no one could run a bank as CEO for more than ten years.
“As it was, I had until 2015 to continue growing the bank
and prepare for a smooth succession to Herbert.”
Today, the acquisition process which took almost two years
has birthed one of Nigeria’s biggest banks by deposits and assets with presence
in eight countries across Africa, including the UK.
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