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Diamond Bank shareholders rebuke board over N7.99m fine by CBN

24 April 2014, 19:15

Lagos - Shareholders of Diamond Bank on Thursday expressed dissatisfaction over the N7.99 million paid by the bank as penalties to the Central Bank of Nigeria (CBN) in 2013.

The shareholders made their position known at the bank's 23rd Annual general Meeting (AGM) in Lagos.

The bank during the financial year ended December 31, 2013, was penalised by the CBN for several infractions.

A breakdown of the infractions showed that the bank paid a fine of N2 million for the delay in refunding a customer the sum of 827 223 dollars as directed by the CBN.

It was fined N4 million for promoting two senior management personnel without the approval of the CBN.

The bank also paid penalty of N1.99 million for withholding a customer’s funds for 26 days after the promoters of the customer had written to inform the bank that they were no longer interested in a facility.

Speaking at the AGM, Sunny Nwosu, National Coordinator, Independent Shareholders Association of Nigeria (ISAN), urged the bank to “stop working for CBN”.

Nwosu said that the bank should be more careful in the future to avoid waste of shareholders' funds.

"The board should be careful not to waste shareholders' funds in meeting CBN sanctions,” Nwosu said.

He also described as worrisome the N7.4 billion spent by the bank on advertising and promotions during the period under review.

Nwosu said that the bank should be more prudent, stressing that such funds could be converted to dividend payable to shareholders.

The shareholders, however, approved the payment of 30k dividend proposed by the bank.

They also authorised the board and management to float rights issue of $500 million or its naira equivalent to support the bank's operations.

Dr Alex Otti, the bank's Group Managing Director, said that the additional capital would make the bank to be more competitive.


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