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27 Dec 2017

Innoson And GTBank: A Case Of Two Smart Alecs

Nigerian writer, 'Tope Fasua, analyses the controversial fallout between Innocent Chukwuma and Guaranty Trust bank.
I’m totally uninterested in tribal wars. I just can’t stand them. So I naturally stood aloof as Nigerians had their fill of this week’s scandal. I think many Nigerians have developed a Nollywood state of mind. You remember Nollywood? The place where they sometimes cook up some of the blandest plots? Some practitioners there are doing great these days, but maybe the damage done to the minds of Nigerians while we slummed is impossible to correct. Or maybe we were born this way – very superstitious, quick to believe fables, cheaply credulous of magic and ‘miracles’, never having an eye out to find out facts, quick to make up our minds on unproductive ventures, heavily sentimental, always seeking for enemies and traducers, even where they don’t exist; just the very thing the old Nollywood used to portray. God help us.

So long as a story touches a sentimental nerve in us – tribe or religion – we lap it up. We are like the warrior that goes to war with blinding tears dripping from his eyes. Perhaps that is why we often lose. The truth is that we should have by now developed barriers to stories that play up our sentiments and they should be the last that we believe, because they are often designed to mislead. Why would we be willingly misled? On social media for the past number of years, many religious posts have been circulating; especially with Christians pitching against Muslims. One group is allegedly always trying to swallow, or obliterate the other; even when we know that there is a solid divide, tens of millions on both sides who will NEVER budge to the other side. Yet the stories persist – on both sides – about how the other one is on a wipe-out crusade. We have become militant against each other for nothing. God help us.

But today, let us understand Innoson Vs GTBank.

Both parties have told totally different stories. Innoson says the bank overcharged his account by almost N800 mllion – from a single account in Nnewi Branch. He wrote to them. They agreed that it was around N600 million. Having agreed, he then calculated the compounded interest for so many years at 22 percent and what they owed him became N8 billion. He took them to court, got a judgment. GTBank couldn’t pay. He asked them to give him shares instead. Sad story. Anyone will identify with Innoson and feel anger well up against GTB. Let us hold that in our left hand first and then hear GTBank’s story.

The bank says it lent Innoson N2.4 billion in 2009 (remember, it took Pius Adesanmi, a professor in Canada, to remind us that this is YOUR money, everybody’s money; the money of the guy who could not get within 200 metres radius of the MD of GTBank and who would never get audience with the bank for a life-saving loan of N10,000), that was added together and availed to Innoson, just like they do with anyone who is bold enough to cook up a scheme and approach them at the highest level. Only the connected get loans in Nigeria, and they almost always never repay. Anyway, the loan was for the importation of motorcycle parts. That is Innoson’s original business. GTB says the transaction went well up to a point, and they held on to the documents (Bill of lading and the rest), without which Innoson could not clear the goods, except he first made some down payments. In short, GTBank could have cleared the motorcycles from the ports and issued one each to its staff if Innoson could not meet its side of the bargain. The motorcycles technically belonged to GTBank. For such transactions, Innoson will pay down the loan gradually after clearing the goods, under the bank’s supervision.

GTB says they did not know when Innoson cleared the goods, and sold these off, abandoning his account with them. That was between 2011 and 2012. He had left a debit balance of N1.6 billion, which they had been asking him to pay but which he didn’t oblige them on. According to the bank, he was once arrested (I think in 2012), and promised EFCC he would pay in installments. Once out, he reneged.

These two stories have no nexus. No connection. Both sides seem to have polished their stories and are sticking to it. Whose report do we believe?

My Sherlock Holmes Perspective

Here’s what I believe happened. There are smart chaps around who can help you audit your accounts and they will always find scenarios where the bank overcharged you, especially if your account is large enough. These are the guys Innoson employed and they came up with a N800 million overcharge. That is fine. I know that these professional ‘auditors’ have fantastic ways of jerking up what the banks have charged accounts wrongly, and they often rely on old rules of the CBN, which may no longer be in force. There is a lacuna they are exploiting against the banks.

As for GTBank’s story, there is at least one antecedent, and it is between two Nnewi men (oops Innoson is from Nnewi too I reckon!), so this is NOT about tribe or religion or politics, but about BUSINESS or the lack of ethics in business. In the year 2012 we were treated to the salacious tales of woe between Messrs Ifeanyi Uba and Cosmas Maduka – two ‘billionaires’.

Innoson has not availed the world with the letter showing where GT Bank accepted to pay N600 million though. With the allegation of forgery hanging on him, his credibility is in question. That he calculated back after a supposed gentleman’s agreement had allegedly been reached, and N600 million became N8 billion, for which he is demanding shares that will probably make him one of the largest shareholders in the bank means he’s acting in bad faith and is out on a mission against the bank. He is playing hardball. Also, I think his calculation is wrong. The bank did not trade with his N600 million for years. If the bank indeed agreed that he was entitled to a refund of such an amount, it is a buildup. It cannot be that they were owing him N600 million from the day his relationship started with the bank, in the basis of which he is claiming N8 billion accrued interest.

Now I know that type of customer. Trouble! The only problem in Innoson’s case, is that he is no longer an Idumota trader but a national figure and should have since quit such business model. This is a man that we daily write to government about patronising him fully. He is a national icon. My belief is that if he has this mindset of cheap shenanigans with banks, then his business will eventually go down. You need a refined mindset to take that business global because that is his next natural level. You need the goodwill of Nigerians to ensure your products become the only products used by government. You don’t need negative publicity. It is not only GTBank that is vulnerable here. In fact, the integrity of Innoson, the man, is equivalent to the relative integrity of his cars. If he doesn’t show faith in business transactions, he is unlikely to show integrity in putting his cars together without cutting corners or embracing the kind of growth mindset that innovation entails.

However if indeed GTBank accepted to pay him that much, then they are bound by their promise. GTB then has to negotiate the N8 billion part with Innoson – because he has them by the balls (whether wrongly or rightly).

As for GTBank’s story, there is at least one antecedent, and it is between two Nnewi men (oops Innoson is from Nnewi too I reckon!), so this is NOT about tribe or religion or politics, but about BUSINESS or the lack of ethics in business. In the year 2012 we were treated to the salacious tales of woe between Messrs Ifeanyi Uba and Cosmas Maduka – two ‘billionaires’. Cosmas had been convinced by Uba, whom he alleged no bank will do business with, to enter into the oil and gas business. Cosmas said he agreed to ‘help’ Uba because he was his ‘brother’. Uba (being very close to the Jonathan family), purportedly had insider information that the president will remove subsidies and the price of petrol will skyrocket (that sure happened on January 1, 2012). Now, Maduka said Uba ‘jobbed’ him. It was a classic case of 419. Their two companies went into a joint venture. Cosmas, being a director at Access Bank, obtained loans which Uba could not get access to because of his reputation. That was what Maduka said. He even said that the MD of Access Bank at the time of this deal, Aig Imokhuede swore he could never stand in the same room as Uba. Find the video on Youtube.

Anyway, Cosmas brought the money. Uba owned the tank farm. They were to import petrol, and Cosmas had his men at the depot, to keep an eagle eye as the petrol was discharged for sale to poor you and me. Cosmas’ men made sure no money was lost. The business was fantastic; much better than selling Range Rover and Ford SUVs to government agencies! So Ifeanyi went for the kill. The last set of importation never arrived in Nigeria. If you check Youtube, you will hear Maduka saying on Channels that in 40 years of doing business he had never seen where someone will clear goods and sell while another person (he) is holding the original bill of lading. While he was holding on to the bill of lading for the petrol armada that he and Ifeanyi had planned, smart boy Ifeanyi allegedly managed to divert the products. Till today, the Coscharis man is probably still holding on to the documents. As at that time, he said he was in the hole for N21 billion at Access Bank. CBN removed him as a director of the bank.

So GTB’s story sounds plausible. Even I didn’t know some of the tricks of international trade until 2011 when I sat in a training conducted by Captain Moh’d Rosdi, a Singaporean, at the Emirates Maritime Institute in Dubai. My mouth was agape when he said a bill of lading could actually be negotiated at sea four times; that means on the high sea, a captain can sell your goods to someone else four times over. The loopholes of international trade are just too many and the high seas are a different world entirely. Many conventions are also reached that tilt the balance against countries like ours and for which we have no answer. That is why we recently lost an election at the IMO (International Maritime Organisation) recently. Nigeria is a pariah nation in international trade. So, in short, it is possible for Innoson to clear the goods without GTBank knowing; more so in a corrupt country such as ours. The largest industry in Nigeria today seems to be the industry of forgery. The motorcycles could even be diverted to Benin Republic, or Ivory Coast, and sold off for cash, as officials in some of those countries are equally corrupt. Documentary credit in Nigeria has become a huge joke.

Lessons

1. Yes, it is always good to ensure your bank doesn’t overcharge you and when they do, seek redress to any limit – even if you have to become their largest shareholder.

Many Nigerian businessmen are nasty jobs, trying to undo every bank they do business with. This is often the case with very famous ones who are tanked to the limit on credit. Nigeria believes only BIG is worth it, so some people have developed a business model of borrowing big from banks, showing a big façade and never repaying their loans.

2. Banks should cooperate and see what they can do to close the loopholes that make them so vulnerable to the smart auditors who whip up expired rules and pin them against the wall for exploitation.

3. Banks must also check their own excesses and stop competing on the basis of who makes the largest profit – even in a recession. That is why they get no pity from members of the public. Banks need to be more responsible to society or we will all come after them eventually.

4. Many Nigerian businessmen are nasty jobs, trying to undo every bank they do business with. This is often the case with very famous ones who are tanked to the limit on credit. Nigeria believes only BIG is worth it, so some people have developed a business model of borrowing big from banks, showing a big façade and never repaying their loans. Some even tell the banks to stop disturbing them and transfer their loans to AMCON – where the common man will have to pay on their behalf. We are being eaten for lunch by these people.

5. Banks are naturally greedy, that is why they lend big to a few of their friends, and many of the loans are compromised anyway. We hear that the bank directors collect a percentage of these loans. This is partly why these big customers are ready to tell them to go to Hell. The banks need to change their business model.

6. When you lend big, you lose big. It is the same problem President Buhari is having with his ‘large projects’ which he may never conclude (chiefly because there will always be funding mismatch), while people are owed salaries for months on end. He seems set to lose big too, as the projects are financed with loans.

7. Banks should by now be wise enough not to lend on some documents that can be easily replicated. There needs to be a review of DOCUMENTARY CREDIT and the need for further safeguards in Nigeria. Banks seem not to be learning from past mistakes. The CBN must also be proactive. We cannot wait for the press to leak these salacious tales of heavy losses of DEPOSITORS’ FUNDS to us, before we know what is going on.

8. There is no tribal, religious or political issue in this one. Innoson is trying to outsmart the bank, simple. There may be some compromises on the part of the bank and its officers though.

9. Add your own lessons.

Merry Christmas even if you’re struggling at the pumps somewhere.

‘Tope Fasua, an Economist, author, blogger and entrepreneur, can be reached through topsyfash@yahoo.com.

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