Utomi To Court: Bank PHB Board Ratified N25.7b Loan

A Lagos High court, Ikeja, heard on Monday that the loan totalling about N25.7 billion for which the former managing director of the defunct Bank PHB, Mr. Francis Atuche, is facing trial was approved by the board and did not offend the code of corporate governance for banks.

A renowned economist, Prof. Pat Utomi made this declaration at the resumed hearing of the matter before the court presided by Justice Lateefa Okunnu.

Utomi, who was the vice chairman of Bank PHB’s board of directors, in his evidence in chief led by Atuche’s counsel, Chief Anthony Idigbe (SAN), insisted before the court that the loans granted by Atuche, were ratified by the bank’s board of directors. The Economic Financial Crimes Commission had charged Atuche to court for allegedly stealing N25.7 billion belonging to the bank.

Charged alongside Atuche as defendants are his wife, Elizabeth and former Chief Financial Officer of the bank, Ugo Anyanwu. Prof. Utomi read from the minutes of the board meeting where the loans were ratified. He said the loans were ratified during the board of directors meeting of Bank PHB held on July 9, 2008.

He listed the companies that benefitted from the credit facilities to include Extra Oil Limited (N3.9 billion); Tradjeck Limited (N3.5 billion), Future View Securities Limited (N3.5 billion); Petosan Oil and Gas Limited ( N4 billion) and Falcon Securities (N8 billion). Utomi said the ratification of the loans did not offend the code of corporate governance for banks in Nigeria.

He said neither Atuche nor Anyanwu violated the bank’s corporate governance ethics in granting the loans as the bank during its 38th board of directors meeting would not have ratified the loans if they did. He said,” In the business of banking which involves risk, it is the duty of the board to take decisions on the optimal risk that the bank can be exposed to.

“We always ensured that illegality was not pursued but we also recognised that management needed to act and take risk on behalf of the bank.” He also told the court that integrity was the high point of the process, adding that the board did not notice fraudulent practices or illegality from any of the committees during the process.