Union Homes: Shareholders allege asset stripping by Aso Savings

Shareholders of Union Homes Savings & Loans Plc have decried a considerable breach of corporate governance rules and asset stripping in the management of its company that was acquired by Aso Savings in 2013.

The shareholders under the aegis of Independent Shareholders Association of Nigeria, (ISAN) at a press briefing in Lagos disclosed that they (shareholders) have consequently lodged a petition with the Securities & Exchange Commission (SEC), Financial Reporting Council of Nigeria (FRCN) and Corporate Affairs Commission (CAC) pleading for intervention to prevent the imminent loss of their investments.

Briefing newsmen, the National Coordinator, ISAN, Mr Moses Igbrude, said: "The petition, signed by Chunks Nwachuku of Indemnity Partners, lawyers representing ISAN, noted that Union Bank of Nigeria was compelled to divest from Union Homes Savings and Loan Plc in line with the regulation of the scope of Banking Activities and Ancillary Matters No.3 issued on November 2010 by the Central Bank of Nigeria (CBN), which repealed the Universal Banking Guidelines and required banks to divest from their non-banking subsidiaries.

The petition was titled “Re: Disturbing Total Absence of Corporate Governance in Union Homes Savings & Loans Plc and Consequential Rape of the Company.”

He explained that Aso Savings & Loans Plc (ASO) was selected as preferred bidder for the divestment and the parties entered into a Transaction Implementation Agreement together with Union Bank and UH Investment Nigeria Limited (UHNL), a special purpose vehicle set up by ASO to facilitate the transaction.

According to the petition, he said: “significant breaches of clauses in the agreement were committed by Aso Savings. Clause 5.1.3.5 which provides that, “Satisfactory evidence that ASO has escrowed with a Nigeria Commercial Bank acceptable to UBN and CBN, the sum of N5,000,000,000 (Five Billion Naira) only being the fresh capital that is to be injected into UHSL in consequence of the transaction outlined in the Agreement. However, the minority shareholders allege that “ASO never paid the investment amount and has failed to do so”

Corroborating, ISAN’s National Coordonator emeritus, Sir Sunny Nwosu, said: “We are calling on relevant authorities to wade into this petition and make Aso Savings to comply with good corporate governance.

“We believe that Aso Savings committed fraud because without acquiring the requisite Scheme Shares of UHSL, ASO and its managers have continued to control the company and strip it of its assets and income. In particular, (both of ASO) have to account for over N12,000,000,000 (Twelve Billion Naira) of recoveries made from customers of UHSL over the last 10 years which is more than sufficient to recapitalize the bank.”

The shareholders also want ASO to account for the N1,600,000,000 (One Billion Six Hundred Million Naira) recovered from UBN Plc in September 2021 and recovered N2,500,000,000 (Two Billion Five Hundred Million Naira) from the Lagos State Government in two tranches of one billion naira in December 2022 and N1.5 billion in January 2023.