BY PRINCE EMEKA OBASI
By 2014, Diamond bank had attained the peak of its meteoric rise. The broad expectation was that it would morph into a major financial power house, right on the heels of the big five – Zenith, GT Bank, FirstBank, UBA and Access. But then, thunder struck and Alex Otti decided to quit.
To many unwary observers, it was Otti’s decision to quit his plum position, despite the renewal of his contract for a second term, a few months before, that laid the foundation for the collapse of the bank. But as compelling as that logic might appear, it masks the real truth. The truth is buried in a complex web of circumstances some of which predate Otti’s appointment. It is deeply rooted in Mr. Dozie’s desperate insistence on the emergence of Uzoma as the GMD/CEO, against all wise counsel by the young man’s colleagues and bosses, most of whom had always felt that “he did not have it in him…”But like the doomed protagonist of a Shakespearean play, Dozie pursued his goal with such single minded resolve that led him to make the costliest bet of his entire entrepreneurial life, in what would rank as “a hail Mary pass,” in American football lingo. Like an aging croupier on a black jack, this last throw of the dice turned belly up and threatened to drown this master mariner.
It started simply enough. A corporate international shareholder, Actis wanted to divest from the bank and offered its 16% share portfolio to Alex Otti. Actis had very little regards for Dozie because their relationship had soured over the years. They had insisted on international best practices in the way the bank was managed and steadfastly refused to countenance the latter’s shenanigans. Thus, when they decided to exit the bank they ignored him totally and instead offered the shares to Otti.
Sources close to Otti confirmed to me that he was surprised at the offer because he was privy to the caveat in the Actis contract which stipulated that Mr. Dozie would be given “the right of first refusal”, in case of such an eventuality. So, he promptly informed Mr. Dozie who subsequently authorized him to prospect for any willing investor to purchase the Actis shares. Mr. Dozie had confessed that he could not muster the funds to exercise his right to buy and was ready to waive those rights if there was a buyer. Otti searched around and was able to locate an Anambra born Oil and Gas magnate, Dr Ernest Azudialu Obiejesi and returned to Mr. Dozie with the proposal. Dozie was reportedly thrilled and met with him to facilitate the transaction. The shares were valued at $120m at N7.50/unit, against the market price of about N9. However, two days before the deal was to be signed off after all agreements had been reached, Mr. Dozie pulled the plug. In a memorable telephone call to Otti he said, “Yes, Alex, on second thoughts I think you should hold action on that matter…. This Actis people want to take me for granted, but I will teach them a lesson. My children and I have decided to raise money and pick up the shares”.
Otti was flabbergasted and protested the deep embarrassment such action would cause the businessman who had worked hard to mobilise the huge resources with the attendant costs. But Mr. Dozie was unmoved. Subsequently, he approached GT Bank and leveraged S125m, pledging his flagship investments in MTN and created a basket of securitization which included even his personal residences. Dr Obiejesi was incensed and threatened a legal action. However, he was persuaded against it by His Royal Majesty, Igwe Nnaemeka Achebe who was the chairman of the bank at the time.
With the new shares in his kitty, Dozie was now at the pole position to install his crown prince as the GMD/CEO of the bank. Then things began to fall apart. The economy plunged, the currency lost value and the bank’s share price plummeted. It was a triple wammy. Dozie was left with the short end of the stick.Exchange rate weakened from the N160 per dollar in 2014 when the transaction was done to about N500 when GT called its loan, before settling at the present N360. The item that the Dozie’s bought shedded weight from the N7.50 they paid to an all time low of N1 and below a few years later. The bad situation was then worsened by the inept leadership of the new management. As the rating agency Moody enumerated in a recent article, “Diamond bank failed because of bad leadership, poor risk management, the board’s lack of independence …….”.
As soon as Otti left in 2014, Uzoma and Paschal purged the board, removing such principled members as Igwe Achebe, Ifueko Omoigu-Okauru (highly respected former chairman of FIRS) and Chief John Edozien (a seasoned professional and former MD of the defunct Afribank) ………. He replaced them with palace hands who were too timid to provide the requisite checks and balances. Recall that as Actis left, it left with two non executive directors who were also replaced by the Dozie’s.Diamond therefore embarked on a death spiral. It could no longer yield any revenues, thus putting in danger Mr. Dozie’s risky investment. He became increasingly unable to service the facility with GT Bank. It was GT Bank’s move to foreclose on Dozie’s assets to recover their money, that opened the gate to the highway which led Diamond bank to Golgotha. Selling the institution was Mr Dozie’s desperate move to preserve his business empire in the twilight of his career.
Besides the board purge was a massive purge at management level which insiders say sparked off victimization. Like someone said, relieving good people of their jobs in the bank showed clearly that Uzoma was ready to shoot himself in the foot. He brought back eye service to the bank and discouraged hard work. The numbers continued to go downhill but no one cared. The board which was then filled with cronies could not ask questions. It came to a point where the bank started selling its assets to show some profitability. The first casualty was the West African franchise in Benin Republic, Togo and Senegal. This was followed by the London Subsidiary opened under the Otti regime. Subsequently, when there were no more assets left to sell, the entire bank had to be sold.
Sometime in 2015, Mr. Dozie told Mr. Clem Owunna, a pioneer shareholder and later director of Diamond bank, that “Emeka hates Diamond bank”. Of course, his views were based on his persistent beef with that story our Newspaper published in 2004, even though we had ostensibly made peace.
However, the truth is that I never hated Diamond bank. I have maintained various accounts with it since 1993 uptill the present day. I was an early subscriber to its initial public offering even in the midst of the dust raised by our controversial story in 2004. I only performed my duty as a reporter in the best way that I understood it.
Yet I never, ever hated the institution or even wished it harm. If anything, I supported it greatly, especially during the leadership of Emeka Onwuka, U.K Eke and most notably, under Alex Otti.
As a member of the South East catchment market of the bank who came of age in the post war years and has been witness, as a reporter, to the systemic marginalization against that market segment and its strategic interests, I took particular notice of certain factors, some of which sadly may not weigh much in Mr. Dozie’s scale of preference.
Perhaps, unknown to some people, the Igbo as an ethnic nationality suffer multiple disabilities as a result of the lingering fall out of the sad civil war. The distorted federal structure it has created and the burden of being Igbo in Nigeria, is rather overwhelming. The situation has been worsened by the perplexing challenges of the Igboman whose natural proclivity for competition has sorely affected his abilities for concerted action, at various levels. As a result, the Igbo, despite their glaring successes in various areas, have found it difficult to build enduring national and even international institutions. So, the various Igbo owned – businesses are often a little more than a motley collection of individualistic enterprises; Pop and Mum outfits, whose capacity to transform into global brands are thus hobbled.
For those who may be quick to react, please consider this anomaly; Igbos are reputed to be Nigeria’s most enterprising people, often trading from coast to coast. But how many Igbo owned businesses are publicly quoted and enjoy broad based national appeal? How many Igbo owned brands can be ranked among the top 50 brands in the country? Another point which some people may have overlooked is the phenomenon of the rise of the Pentecostal churches as an index of socio-economic and even political influence. The Igbo boast of the largest population of Christians in Nigeria, but how many Igbo owned churches are flourishing, nationally and internationally? Where are the Igbo “churchpreneurs?” The pastors who build mega churches and buy private jets, how many of them are Igbo? Indeed, how many Igbo owned brands can be rightly regarded as national brands?
By the time he left his position as GMD/CEO of Diamond bank in 2014, Alex Otti had built it into an iconic institution. The central bank of Nigeria officially designated it as “one of the seven Systemically Important Banks that are too big to fail”. It had become, to all intents and purposes, the most successful Igbo owned business brand in the world. I don’t know about other people, but I was immensely proud of it. I believe that millions of its rapidly growing customer base, especially from its catchment market, also were. It’s rapidly spreading branch network, housed in classic Avant Garde buildings, together with sexed up logo and emblem, infused deep feelings of joy. As you drive through the streets of Lagos and other parts of the country, the branches called out to the world, “Yes, we too can do it, we too can tango with the big players – FirstBank, Zenith bank, GT bank, UBA etc.” As Shakespeare once wondered aloud, “Who is so knave that he cannot love his country?” Indeed, who is so surly, that he cannot appreciate sublime achievements and supreme excellence? Well, maybe let us ask Mr. Paschal Dozie, he might well know!
There are some people who argue in a conventional, but twisted logic, that Mr. Dozie reserves the right to sell his bank, or in fact, do anything he wished with it. Of course, that position is manifestly untenable and even tendentious. The unassailable logic is that the bank did not belong to him. He was merely the lead founder and for a season, its largest shareholder. A bank belongs to all its relevant stakeholders – shareholders, depositors, customers and staff- forming the most critical segment of the ownership loop. However, even if the privilege of ownership can be extended to Diamond bank founding members, it still does not make a bank any one person’s sole concern to do as they please. Don’t also forget that as a publicly quoted bank, the public that subscribed to the shares are a major part of ownership.
Indeed, a bank is in the mould of the cock captured poignantly in the African proverb which was given global resonance by former American Secretary of state, Senator Hilary Clinton in her famous book, “It takes a Village”. Whereas, one person usually owns the cock in Africa, the whole community owns its voice. Usually, in African’s rural communities, the golden voice of the cock is the most reliable time keeper which the communities know. So, if the presumptive owner decides to do away with the cock without paying heed to the sensibilities of the community, such an individual would be deemed to have erred grievously and be guilty of committing an abomination, an “nso ani”. In Igbo cosmology, individuals who commit abomination, like the famous Okonkwo, lead protagonist in Chinua Achebe’s iconic novel, Things fall Apart, or the late infamous Col Ifeajuna of the Biafran war notoriety, usually pay a heavy price. Of course, some may consider such punishment as harsh, but seen within the context of the Igbo world view, with heavy emphasis on honour and integrity, it is quite understandable. The simple truth is that Diamond bank was not a family heirloom to be subjected to the idiosyncratic whims of a disgruntled and vengeful patriarch. It had become the priceless symbol of a people challenged by severe socio-political circumstances, and yet resolved to survive, thrive and even excel. Its failure is cataclysmic. The strident refusal of Mr. Dozie to consider other viable options to save it, worsens his case. Denying his people, the satisfaction of this sublime achievement and turning his back on their feelings of deep hurt, is treacherous. The betrayal is his albatross solely and should remain his cross to bear for now, and for all time.
Whereas it is his right to plead self-interest as justification, I insist, without prejudice, on my reportorial rights; the sacred duty of the journalist to answer to the demands of that higher calling, the inalienable duty of telling truth to power and the responsibility of recording the first drafts of history. As reporters, we play this role consciously, with an eye on posterity in other to serve Mr. Dozie’s children, children’s children and indeed, all our children, with the accurate rendition of facts and figures of the true story surrounding the rise and fall of the bank whose sparkle once illuminated the Nigerian skyline. –O Diamond Bank! Concluded
The Presidency: Prince Emeka Obasi. [email protected]