Governor Ademola Adeleke of Osun State has emphasized the need for the nation’s apex bank, the Central Bank of Nigeria (CBN) to launch an inquiry and seek necessary information about the history of the Cititrust Holding PLC noting that the firm getting declared as an illegal company alongside 57 others by the Economic and Financial Crimes Commission (EFCC), a few days ago, has made him fear for the future of the Living Trust Mortgage Bank Plc.
He said it has become important to know the company’s past, and its reputation while also taking time to weigh the implications of allowing Cititrust Holding PLC to maintain its business deals with the Living Trust Mortgage Bank plc.
The governor in a petition dated March 19, 2025, which was sent to the Governor of Central Bank of Nigeria (CBN) and had the Director General of Securities Exchange Commission (SEC), the Executive Commissioner, Operations (SEC) and two others cc’d, noted that it is important to seek required information about the history of the company in question.
Recall that Alhaji Adebayo Jimoh, a former group Managing Director of Oodua Investment Company Ltd, had while in charge of the Living Trust Mortgage Bank Plc supervised the sale of its shares to Cititrust Holdings Plc in 2019,
Citi Trust Holdings Plc owns 41% ownership of the financial institution while Osun State government owns 40% ownership, the remaining 19 % is owned by diverse individuals with no single person having up to 10 % ownership.
Also, based on the shareholders’ agreement, Citi Trust Holdings Plc produces the Managing Director, while the state government nominates the chairman.
Governor Adeleke in the petition sent to CBN and others asked if it will be reasonable to allow such sale of shares to remain valid without subjecting it to review given that the declaration of Cititrust Holding PLC as an illegal company by the EFCC has blackened its image.
‘Meanwhile, CitiTrust Holding Plc has been declared as one (1) of the fifty-eight (58) Ponzi schemes by the Economic and Financial Crime Commission (EFCC), with their names and schemes published on the official website of EFCC. There are allegations that the proceeds of the scheme must have been used to buy Osun shares, which will possibly expose Livingtrust Bank. Hence, there is a need for unbiased recertification of CitiTrust’s ownership of Livingtrust shares and to determine, if the entity, called CitiTrust is ‘fit and proper’ in line with various regulatory requirements’ the governor submitted.
Like other state-licensed mortgage entities, he noted that the LivingTrust Mortgage Bank plc was established by the Isiaka Adeleke administration in 1993, to play a significant role in the socio-economic development of Osun State through housing needs and mortgage activities while it had however departed from its socio-economic developmental roles since 2019,
What stood as causative factor for this, he added, is the sales of shares to CitiTrust Holding Plc while also picking holes in the decision taken by the CBN in respect of the implementation of the Memorandum of Understanding and the Shareholders’ Agreement
‘Unfortunately, Livingtrust has departed from its socio-economic developmental roles, since 2019, when the shares of the state were sold to CitiTrust Holding Plc. Rather than increasing the share capital; the sales were to ‘cash out’ and didn’t translate to capacity enhancement or the development of the finance institution. Currently, the shareholding of the state remains at 39.83 percent while that of Cititrust Holdings Plc remains at 40.8% and the rest is held by other individuals (mostly Osun indigenes). The bank lacks a good corporate governance culture and its executive management backed by CitiTrust has always been unfair to Osun State. This led to disputes last year, which were later resolved out of court with the undertaking that each party will be fair and equitable to each other, henceforth. The Memorandum of Understanding and the Shareholders’ Agreement were signed to this effect at the end of last year.
The CBN officials from the Other Financial Institutions Supervision Department (OFIs) have chosen to implement the MOU rather than allowing the two parties to implement it by themselves. We had thought the restoration of governance structure should be the priority until we noticed certain infractions by these CBN officials, many of which are offensive to the Companies and Allied Matters Act (CAMA 2020). Although the MOU has increased the minimum number of directors to 11 from 7 directors, the increase is subject to approvals as stated in the MOU, which include amending the Memorandum and Article of Association (MEMART) and filing with the Corporate Affairs Commission (CAC).
However, the most insensitive infraction is asking the already approved directors, who have not resigned or who have not been withdrawn from the board by the state to go through another approval of CBN. Our existing three (3) directors, who are on the Board, do not need new approval and they will continue to be on the Board under the new dispensation when the MOU becomes fully operational. We have had several official communications with the CBN officials (from OFIIs) on this position so we cannot understand why they are adamant.
Also, the increase in the number of directors, from 7 to 11, should create only four additional vacancies (2 directors for each party) but what the CBN officials did was to declare six (6) vacancies for CitiTrust. I have been reliably informed that none of the existing (2) directors of CitiTrust has resigned. Even if they are to do so, what CitiTrust should have as vacant positions will be four (4).
Invariably, what your officials have done by giving six (6) vacancies to CitiTrust was to declare by fiat the filling of the positions of the two (2) current and sitting Independent Directors, who have not resigned from the board of directors and who have not been sacked by any court. This is against the Companies and Allied Matters Act.
Moreover, the Annual General Meeting (AGM) has not been held, and these current/sitting independent directors have not been rejected by the AGM to create a higher number of vacancies in line with Section 273 of CAMA 2020. The current two (2) Independent Directors were not nominated by Osun State but by CitiTrust. There are allegations that the CBN official are determined to give control of the Board to CitiTrust in addition to the control of executive management and to exceed the new minimum number of directors in favour of CitiTrust.
The filling of a casual vacancy arising from the resignation of directors or withdrawal by shareholders requires informing the Board and passing such a resolution to fill the vacancy in line with Section 274 of CAMA. The board of Livingtrust is yet to meet, while the CBN officials for whatever reason have been muzzling their ways as if they are on a special mission to make CitiTrust, who is also the party managing the bank, gain the upper hand’ he added.
Governor Ademola Adeleke who said he is worried that the actions and inactions of the CBN officials (from Other Financial Institutions) are capable of creating ‘a new set of lacuna that can destabilize the board of directors which will continue to perpetuate the corporate tyranny of the Executive Management against my state’, noted that the financial institution can restore a good corporate governance structure with commitment and bipartisan implementation of the MoU.
‘The MOU and the Shareholder’s Agreement signed by Osun State and CitiTrust have dispute-resolution mechanisms covered by specific clauses and to the best of my knowledge, none of the parties has made known of any dispute, which should normally trigger the clauses and resolution. In addition, our Memorandum and Article of Association (MEMART), currently recognizes seven (7) directors and stipulates that a quorum (stated as 3 directors) can carry on the business of the board to declare the filling of vacancies.
The newly signed MOU did not make our MEMART subservient, rather the MOU recognized the MEMART and yielded to it. With commitment and bipartisan implementation, the bank can restore a good corporate governance structure that will deliver efficient, independent executive management and a functional board of directors. It will be enduring, if it is the internal mechanism that has produced it. Also, the MOU was deposed at the Federal High Court as Consent Judgment and if any party has an issue with its interpretation, it can approach the court for clarity’ he added.
The governor also noted that in response to his petition, he expects the CBN to take immediate and prompt action ‘to stop the unholy and biased interference on the corporate governance structure and internal affairs of Livingtrust PMB Plc’ and to ‘stop the assault on the various sections of the Companies and Allied Matters Acts (CAMA 2020) by the staff of CBN, who are from Other Financial Institutions Supervision Department’-Team@orientactualmags.com Do you have any information you wish to share with us? Do you want us to cover your event or programme? Kindly send SMS to 08059100286, 09094171980 or get in touch via orientactualmag@gmail.com. Thank you
