Confusion as Jaiz Bank commences process to raise N3.3 billion additional equity

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Confusion as Jaiz Bank commences process to raise N3.3 billion additional equity

Confusion has trailed the commencement of the process by Jaiz Bank Plc to raise additional N3.3 billion equity capital for the bank.
The board and shareholders of the bank recently announced it had commenced the process of raising additional equity through a private placement of 5,076,923,077 ordinary shares of 50 kobo at 65 kobo per share from interested investors.
However, since the announcement, the management has found it difficult to proceed, following a disagreement over the tenure of the incumbent managing director and the appointment of his successor.
The bank has, however, denied that the disagreement revealed the existence of a major rift in its board.
Clarifying the current situation, Jaiz Bank said in a statement in Abuja on Sunday, said that there is no rift whatsoever in the board of the bank over any issue.

“To set the records straight for the attention and benefit of all our regulators, bankers, shareholders, customers, investors, strategic stakeholders and the general public, there is no rift in the board of the bank, other than legitimate exercise of divergent opinions on a matter in the ordinary course of the directors’ duties,” the bank said.
As proof that there is no rift in its board, the bank cited the approval of the proposed placement of ordinary shares at an extraordinary general meeting on October 28, 2020, in Abuja, chaired by the chairperson of the board of directors, Umaru Mutallab.
The bank said the proposed capital raising exercise was an affirmation of the confidence the board and shareholders have reposted in the prospects of the bank, despite the current economic uncertainties occasioned by the COVID-19 pandemic.
On the disagreement over the appointment of a successor to the incumbent managing director, the bank said the issue was considered by the board as the expiration of his contract was approaching.
The bank said that while some directors were of the opinion that a change of the leadership was required to pursue some critical strategic goals, others were of the view that he should continue, given the very impressive performance of the current management.
Regardless, the bank said the board nonetheless went ahead to appoint Muhammad Shaheed Khan as the successor to the outgoing MD.
Mr Khan’s appointment sparked off a controversy in the board, resulting in the decision being reversed at a subsequent meeting.Since Mr Khan’s appointment was subject to the approval by the relevant regulatory authorities, including the Central Bank of Nigeria, the bank said the board’s resolution to reverse its decision and consequently discontinue the appointment process was in line with the terms and conditions of the offer letter issued to him.
The bank said the approval obtained from the relevant regulatory authorities materially modified the intention of the board as expressed in the conditional offer to Mr Khan, necessitating the board’s decision to discontinue the process of his appointment.
The bank, however, assures its customers, shareholders, investing public and other stakeholders of the commitment of the board to continue conducting its affairs within the stipulations of existing corporate governance codes for banks and public companies in Nigeria.

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