1.0 PREAMBLE
The House of Representatives at its plenary sitting on Tuesday 19th April 2018, received a petition presented by Hon. Amadi Denis on behalf of Victor Inyiama & co. for Von Schools Ltd against the Management of Bankers Committee, Chattered Institute of Bankers and Fidelity Banks plc urging Fidelity Bank to reverse unsolicited credits and refund excess charges made on the account of Von School Ltd. Which was referred to the committee on the above date for further legislative action?
2.0 SUMMARY OF THE PETITIONER’S ORAL AND DOCUMENTED PRESENTATION
The petitioner (Mr Victor inyiama) in his presentation stated that he was contracted by the management of Von schools ltd to conduct a forensic account reconciliation of the school’s bank accounts with the view to uncover and recover any excess charges or short payments of its interest and other dues
2.1 That he concluded the reconciliation and reported the findings to the concerned bank (Fidelity Bank) to explain the infractions noticed.
2.2 That after the demand letter and a reminder without any response from the bank, he levied a petition against Fidelity bank on behalf of Von schools, Bankers subcommittee on ethics and Professionalism (SEP) and the chartered institute of bankers of Nigeria. Bankers House pc 19 Adeola Hopewell Street P.O.Box 72273 Victoria Island Lagos.
2.3 That when they could not come to a compromise with the said bank, the Banker’s Committee then invited the SEP to take over the reconciliation.
2.4 The SEP Committee met on two occasions in regards to the reconciliation but could not gain definite closure on the issue for issues best known to them.
2.5 That despite the fact the aim of the meeting was not achieved, they were asked to pay a non refundable fee of ₦100,000 before the issue could be reviewed again.
2.6 That the result of the reconciliation of account with Fidelity bank was as follows;
2.61 That Fidelity bank had been observed to have passed an unsolicited loan with the sum of ₦95, 899, 557, 56 to Von school ltd.
2.62 That further observation revealed that the bank in question also passed excess charges of ₦233,886,447.97 to the petitioner’s account without non disbursement of the total approved loan.
2.63 That further observation showed that there were several unauthorised transfers of monies and deductions made from the petitioner’s account including loan recoveries which had been fully paid off by the petitioner.
2.64 That there were also levies to the petitioner’s account with charges and interests of naira lodgement into the account.
2.7 That when Fidelity bank was served with the petition, they hurriedly on January 4th 2017, impersonated the customer by forging a letter headed paper and wrote on their stead to the MD fidelity bank and the secretary of SEP of the banker’s Committee claiming that the customer had directed a stoppage to the petition which was later discovered to be false.
3.0 INVESTIGATIVE HEARING
The Investigative hearing was concluded on Tuesday 17th July 2018, after several hearings with all parties involved physically present to make oral and documented presentation.
4.0 PRESENTATION SUMMARY BY FIDELITY BANK.
4.1 According to the documents presented which was signed by Sunday Adebisi and Jude duru in Defence of the petition, it was revealed that;
4.12 The customer was granted a term loan of the sum of ₦40 million for 36months at 22% interest Rate as agreed on the offer letter dated June 24th 2013.
4.13 That the customer requested for an extension to restructure facilities severally in their letter dated January 10th 2014 and February 28th 2016.
4.14 That the restructure was done in line with the customer’s request.
4.15 That the customer did not fund the account to accommodate maturity obligation.
4.16 That the customer forwarded a complaint report through its consultant (Victor Inyiama & co) and demanded for a reversal of ₦195,899,557.56 and ₦233,886,447.97 as excess charges on the account.
4.17 That this was reported at the banker’s committee who accepted to mediate between both Parties.
4.18 That because the consultant to the petitioner refused to dialogue with the with subcommittee on ethics and professionalism who were invited to resolve the matter, the technical Team of the SEP of bankers committee resolved to carry out their independent review and observed that the petitioner was indebted to the bank to the sum of ₦57, 515,973,35.
4.19 That at the end of the independent review of the said account, the customer (Mgt Von schools) approached the bank to work out a repayment plan. While this process was ongoing, the consultant to the petitioner decided to boycott the process and levied a petition against the bank at House Committee on Public Petitions.
4.19 That such action was against the will of the petitioner who had accepted and expressed preference to amicably resolve the matter with the bank in line with the ruling of the Banker’s committee.
4.2 SUMMARY PRESENTATION BY THE BANKERS COMMITTEE
4.21 The bankers committee in their presentation observed that both parties were contesting the outstanding balance on the account .while the consultant claimed that the customer should have a credit balance of ₦84,660,009,37 the bank claimed that the customer was indebted to them.
4.22 That at the meeting held on 28th June 2017, both parties resolved the following;
- To produce two constructed statement considering only ₦40 million facilities granted via offer letter dated 24th June.
- To generate repayment schedules for the ₦40 million taking into consideration the customer’s request for one year extension.
- Return the ₦500,000,000 perfection charge and debit the customer’s account on the date of actual perfection and credit bureau change.
- To return loan of 11.1million to the account and debit the account with ₦5.5million as earlier credited to it.
- To debit the account with other fund transfer (₦5.6million) in the restricted account.
- That both parties exchange positions and forward final position to subcommittee.
4.23 The summary of both parties position shows that the Investigative panel was unable to Open the excel workbook containing the consultant’s restructured statement of accounts.
4.24 That the bank in question presented two restructured statements to the subcommittee, made the customer’s debt amount to ₦44,767,930.12 for scenario 1 and ₦59,298,857.64 for Scenario 2 as at 31st January 2017.
4.25 That the summary of the initial findings of the Investigative panel in scenario 1 shows that the panel did not understand the basis for the two different reconstructions as the bank failed to provide documentary evidence that withdrawal amounting to ₦5.6 million was authorized by the customer.
4.26 That the consultant had already contested that the customer was not aware of the second account.
4.27 That the panel also observed that the customer’s request for loan extension was dated 10th of January 2014, whereas the bank documents showed that the extension was granted in march 2014 and an adjustment of extension date was made to be January 2014, in their independent reconstruction.
4.28 Further investigation also revealed that the bank claimed that actual perfection cost of ₦160,150 incurred on the account was debited on 24th February 2014 after reversing the initial debit of 500,000 .that in line with the agreement reached at the meeting, the SEP disallowed ₦160,150 as the bank failed to provide evidence to support the cost.
4.29 More so, in scenario 2, the investigative panel carried out an independent account in line with the agreement reached, this further revealed that the customer was indebted to the bank to the sum of ₦57,515,973.31 as at 31st January 2017.
4.291 That in their findings, Fidelity bank had agreed to change perfection fee if and when the properties are perfected. Hence the position to reverse the entire ₦500,000 earlier charged as the perfection fees.
4.292 That the bank was able to provide evidence that the withdrawal from the second was done by the customer therefore, transactions in the account were considered in their revised reconstruction statement of account.
4.293 That since the investigative panel recapitalized interest in the reconstructed statement which was invariably omitted in their earlier position, the reversed position showed that the customer was indebted to the bank to the sum of ₦57,515,973.85 as at 31st January 2017.
4.294 That the decision of the subcommittee after due consideration of the case recommends that the petitioner should refund the sum of ₦44,767,930.12 already admitted by the bank.
4.295 That the recommendation of the Investigative panel showed that the customer’s net debt to the bank as at 31st January 2017 was ₦57,515,973.85 and urged that the petitioner refunds the sum of ₦44,767,930.12 already admitted by the committee.
4.30 PRESENTATION BY VON SCHOOL LTD
Von school in their presentation stated that they have amicably resolved all disagreements with fidelity bank and accepted the decision reached by the subcommittee on ethics and privileges of the banker’s committee on the matter.
4.31 That the Management of Von school did not authorize the consultant to file any petition against the bank and requested that all deliberation as regards to the case in question be stopped.
4.32 That von schools has since discontinued services rendered by the consultant.
5.0 COMMITTEE FINDINGS
The committee after series of investigation on the above petition came up with the following issues for determination;
5.1 Whether there are unsolicited charges credits and excess charges made on the account of von schools ltd by the Management of fidelity bank.
5.2 The outcome of the forensic account reconciliation carried out by Mr Victor Inyiama on Fidelity bank for Von schools ltd.
5.3 The role of banker’s committee and subcommittee on ethics and professionalism in resolving the matter
5.4 Whether there is amicable resolution between the management of fidelity bank and Von schools ltd.
5.5 Arising from the affirmations, the committee came up with the following findings;
5.51 That the forensic account report carried out by Victor Inyiama during the reconciliation of the account of both parties shows that the management of fidelity bank had been observed to had passed an unsolicited loan with an amount of ₦195,899,557.56 to Von schools ltd with excess charges of ₦233,886,447.97 to the petitioner’s account without none disbursement of the total approved loan.
5.52 that fidelity bank in its defence argued that the passage of unsolicited loans amounted to the customer’s account was due to customer’s request that the bank should extend and restructure the facilities and ensure that it is done in line with customer’s request and that such request did not find the customer’s account to accommodate maturity obligation.
5.6 That the summary of the resolution reached at the mediation meeting held on 28th June 2017, shows that both parties are contesting the outstanding balance on the account while the consultant claimed that the customer should have a credit balance of ₦84,660,009.37 the bank claimed that the customer is indebted to them.
5.61 That the investigative panel did not understand the basis for the two different reconstruction as the bank failed to provide documented evidence that withdrawals totalling ₦5.6million on account by the customer.
5.62 That the result of the investigation carried out on the independent account as agreed by both parties showed that the customer was indebted to fidelity bank with the sum of ₦57,515,973.85 as at 31st of January 2017.
5.63 That the subcommittee after due considerations of the case recommended that the petition refunds the sum of ₦44,767,930.12 to the bank.
5.7 That at the end of the investigation both parties (Von schools ltd and fidelity bank) amicably resolved all disagreements with the bank and accepted the decisions reached by the subcommittee on ethics and privileges of the bankers committee as stated above.
6.0 COMMITTEE RECOMMENDATIONS AND CONCLUSION
The committee in view of the findings above urge the House to discontinue the matter as both parties (Von schools and fidelity bank) had agreed to settle their differences amicably.
6.1 That the petitioner pays Mr Victor Inyiama all expenses incurred while carrying out forensic audit in the process of reconciling the issue at stake as agreed in their contract before it was terminated.
Rep. Uzoma Nkem Abonta Pastor.Yilji Yakubu
Committee Chairman Committee Clerk