Osun State Governor Ademola Adeleke has appointed a chairperson for Living Trust Mortgage Bank, a publicly quoted company listed on the Nigerian Exchange, in which institutional and individual Nigerian shareholders hold stakes.
The governor made the decision in what appears a contravention of Nigerian corporate governance law for such companies, which requires the members of such companies’ boards of directors to recommend a nominee for election by shareholders, after which the industry regulator, the Central Bank of Nigeria (CBN) in this case, will then review and approve as appropriate.
Based in Osogbo, Living Trust Mortgage lends for home purchase and other real estate ownership purposes, and has been listed on the Nigerian Exchange since 1970.
“I’m not sure you’ve heard it before that a political authority appointed the chairman of a bank. It’s not about the governor, it’s not about political power,” Timothy Gbadeyan, the company secretary and head of corporate strategy, told PREMIUM TIMES.
A letter dated 8 April, signed by Olawale Rasheed, the chief press secretary to Osun State governor, named Wale Bolorunduro, a former commissioner of finance, budget and economic planning on Osun State as “a director and chairman designate on the board of Living Trust Mortgage Bank Plc.”
Governor Adeleke approved the appointment, while Teslim Igbalaye, the secretary to the state government, endorsed it, the document further revealed.
The chairmanship role is not yet vacant, and no announcement of resignation or retirement has been made in respect of Adebayo Jimoh, a former CEO at Oodua Investment Company Limited, who currently holds the position.
“It’s by voting. So you have to nominate. Directors have different regimes. So after the tenure of let’s say someone that is already existing before, so after the person’s tenure has elapsed, whoever is eligible or someone they are trying to nominate,” David Adu, senior advisor at the investment bank Meristem Securities, said.
“Once the nominations are made, they bring it to the shareholders at the AGM, and you vote and if the vote is successful, they now tender that to the CBN for the approval.”
The top hierarchy of the mortgage institution continues to face disruption from political interference after the state government, which previously owned the controlling stake in the entity sold a huge portion of its shares, clearing the path for Citi Trust Holdings to become the new majority owner in 2021, when the investor held as much as 60 per cent of the company.
The 2023 audited annual report of Living Trust Mortgage Bank shows Citi Trust Holdings now holds 40.82 per cent, while Osun State Government owns 39.83 per cent.
Members of the investing public hold 11.96 per cent of the remaining shares, the document states.
“Why these things are scary is because if we breathe here, we tell CBN. It is the most regulated sector of the economy,” Mr Gbadeyan said.
“At the end of the day, the real appointment is going to emerge from the Bank, not from an outside forced power or authority.”
Osun State Government sold the shares that turned Citi Trust Holdings into the foremost shareholder of Living Trust Mortgage under the administration of Gboyega Oyetola, former Osun governor and now minister of Blue economy, after which the board changed the name of the institution from Omoluabi Mortgage Bank.
To expand its capital base, Living Trust Mortgage is holding talks with international and domestic investors, the company said in a regulatory filing in March.
“Osun State and Citi Trust have shareholders agreement in place since 2019 that recognises Osun “seed investment” and as a founder. Both parties share board position by that agreement with Osun producing chairman, while Citi Trust produces MD,” Mr Rasheed told PREMIUM TIMES on Thursday.
“Since 2019, Citi Trust has produced 2 MDs while the outgoing Chairman was produced by Osun state under Oyetola,” the governor’s spokesperson added, referring to Mr Oyetola, the immediate-past governor of Osun State.
An investment group owned by institutional and private investors, Citi Trust Holdings, has assets worth N45.6 billion, according to its latest earnings report, with interest in commercial banking, wealth management, investment bank, pension management among others.
“There are a number of factors that govern these things because they are not always very clear-cut and straightforward. It could be that you have a situation where, in the agreement, there is a structure between” both parties, Mr Adu said.
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