There are indications that a serious board room crisis like an inferno is currently razing down Jaiz Bank Plc over the tenure of the current Managing Director and the appointment of a successor.
The two claimants are the current Managing Director, Mallam Hassan Usman and a new candidate, Mr. Mohammed Shaheed Khan, who was appointed by the board to succeed Usman.
It was alleged that due to COVID-19 pandemic which ravaged the bank’s board, the current MD fought back to regain his seat while a new appointment was subsisting.
Reacting to the alleged infighting among directors, a top official of the bank said there was no rift on the board of Jaiz Bank.
“In fact, the board of directors held its 34th board meeting with 100 per cent attendance on the 27th of October 2020. This was followed by a successful Extra Ordinary General Meeting (EGM) the following day which was presided over by the Chairman, Dr. Umaru Mutallab,” the source said.
Regarding the offer of appointment to Khan, the source said the offer was given subject to the approval of the Central Bank of Nigeria (CBN). The apex bank approved terms different from what was offered to Khan and the board consequently decided not to proceed with the process of appointing him as managing director of the bank.
Meanwhile, according to investigation, both the current Managing Director of the bank and the new candidate have been caught in the bitter boardroom politics of Jaiz Bank.
Findings confirmed that some shareholders of the bank have sharp disagreement with some directors and board members.
It was gathered that some board members took advantage of COVID-19 infection of some of their colleagues to gain upper hand to reverse the decision of the bank to hire a new Managing Director/ CEO.
The boardroom crisis may cost the bank about N2 billion being the six-month salaries of Khan at $175,000 per month.
Investigation showed that the new candidate, Khan (who is a foreigner) was offered a letter of appointment on August 3, 2020.
The Central Bank of Nigeria (CBN) also on 17th September 2020 confirmed that it has no objection to Khan’s choice.
A top source, who spoke in confidence, said: “We have a boardroom crisis at hand. The current MD/CEO, Mallam Hassan Usman, was doing well but some directors insisted on change. They asked him to proceed on retirement and set machinery in motion for the recruitment of a new MD/CEO.
“Along the line, some board members who wanted the MD to retire became ill. Some aggrieved shareholders and board members held an Emergency Board meeting to nullify the retirement notice of the current MD/CEO.
“This is the challenge at hand. We are expecting the intervention of the CBN and restoration of peace to the board.
“The new candidate has written the bank to demand N2 billion as salaries for six months at US$175,000 per month. We may be drawn into a prolonged legal battle.”
Another source in the bank said: “I think the problem at hand was borne out of mutual suspicion among board members.
“Some board members are nursing fears that they may be edged out by certain powerful shareholders. We are really in trouble. And this is the first Islamic bank in Nigeria. Business interest is overriding the fear of Allah.”
A letter to the Chairman of the board of Jaiz Bank, Alhaji (Dr) Umaru Mutallab and the CBN by Khan’s counsel, A. U. Mustapha (SAN) gave insights into how Jaiz ran into crisis.
The letter, dated 26th October, 2020, was also copied the President of the Chartered Institute of Bankers of Nigeria (CIBN) and the Secretary of Jaiz Bank.
The letter said: “Khan, who has a Fintech background, strong network and profile, was approached by Jaiz Bank because the current Managing Director was retiring, and the Bank needed transformation (both cultural and digital) to compete with other digital focused Islamic banks and incumbent banks;
”After rigorous and exhaustive interviews, Khan was offered a letter of appointment as managing Director/CEO of Jaiz Bank on the 3rd of August 2020 and the same letter was duly accepted. Thereafter, a Contract of Employment was drawn between Jaiz Bank and Khan.
”On the 7th of August 2020, Jaiz Bank wrote to the Central Bank of Nigeria (CBN) requesting for its approval to appoint Khan as its MD/CEO.
“The CBN replied by its letter dated 14th August requesting for further clarifications.
“On the 21st of August 2020, Jaiz Bank wrote another letter to CBN where it acknowledged CBN’s letter dated 14th august 2020, stating “we will strongly request your kind consideration and approval for the appointment of Muhammed Shaheed Khan as managing Director Designate”.
“In response to the passionate request, CBN, by its letter dated 17th September 2020 CBN formally confirmed that it “has no objection to the appointment of Mohammed Shaheed Khan as Managing Director/CEO for two years from the date of his appointment.
”Following his appointment as the MD/CEO of Jaiz Bank, Khan completed all formalities and resigned from his previous job and his resignation was duly accepted by the board of his former employers.
“He withdrew his children from their current school, donated/sold his furniture, secured a smaller accommodation for his close relations and thereafter, started working remotely for Jaiz Bank.
“On the 3rd and 11th of September, Khan attended to official electronic mail from the Company Secretary “Executive Directors would like to have your input on a proposal to secure some IT infrastructure, details of which will be shared with you shortly”;
”But the current outgoing Managing Director of Jaiz Bank, Mallam Hassan Usman, on the 25th of September 2020, after an emergency board meeting, informed Khan that Jaiz allegedly cannot proceed with the appointment.
“Khan replied by claiming that he had been in contact with the Chairman and Company Secretary as the Chairman had no knowledge of the alleged termination of his appointment and that as an outgoing Managing Director, he lacks the authority to send the correspondence.
“On 30th September 2020, Khan wrote the Chairman, Board of Directors of Jaiz Bank, Alhaji (Dr) Umaru Mutallab CON, FCA, and the Company Secretary that he has completed all the formalities and as per the offer letter and he will be joining Jaiz Bank on October 2nd 2020.
On the same 30th September 2020, Alhaji (Dr) Umaru Mutallab CON, FCA, Chairman; Board of Directors of Jaiz Bank replied back “We look forward to your resumption on the 2nd of October officially as MD designate while the visa formalities are being finalized. On behalf of the Board, we look forward to seeing you soonest in person in Nigeria.”