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By NBF News
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UNION Bank of Nigeria Plc said that it would challenge the competency of the suit filed against the management alleging reckless spending by the Managing Director, Mrs. Olufunke Osibodu and others.

Counsel to the defendants, Dr. Ichrushcher Ekwueme said at the Federal High Court recently that objections to the suit would be filed within two weeks.

He urged the court for time to enable him file his processes, a request acceded to by trial judge, Justice B.I Molokwu, who adjourned further hearing on the matter till February 16, 2011.

In the substantive suit, the shareholders led by the National Coordinator of Independent Shareholders Association of Nigeria (ISAN), Mr. Nwosu Nnamdi, alleged that Osibodu and her cohort had continued to expend the funds of Union Bank for their personal benefit and to the detriment of the bank itself and shareholders.

They also alleged that Osibodu and others appointed into the board of the bank by the Governor of Central Bank of Nigeria (CBN), Sanusi Lamido Sanusi had been running the affairs of the bank in an illegal and oppressive manner to the prejudice of shareholders and contrary to the provisions of the Memorandum and Articles of Association of Union Bank.

The shareholders in a suit filed through their counsel, Mr. Onyebuchi Aniakor, also listed Musa Gella Yakubu, Adekunle Adeosun, Philip Ikeazor, Ibrahim Kwargana, Folashodun Shonubi, Mansur Ahmed, Ahmadu Abubakar, Onikepo Akande, Ibrahim Gobir, Onajite Okoloko, Festus Odimegwu, Olusegun Olusanya and Cosmas Udofot, all as co-respondents.

Sanusi had on August 14, 2009, sacked all the former executive directors of the bank and replaced them with the current management under Osibodu's leadership.

The CBN governor had alleged that the former management of the bank under the leadership of Barth Ebong mismanaged the affairs of the bank and that their actions contributed in putting the bank in a grave situation.

But the shareholders in the suit were claiming that Osibodu and her colleagues, instead of nurturing the bank back to its pride of place, had been engaging in reckless spending to the detriment of the shareholders.

They alleged that a total sum of N98 million was recklessly approved for the purchased of exotic cars by the Sanusi-installed management of the bank.

For instance, the shareholders revealed that a Range Rover Jeep valued at N20 million and a Mercedes 'S' Class valued at N19.75 million were purchased for Osibodu alone, while Ikeazor got a Mercedes E350 worth N14.54 million.

Also, the shareholders pointed out that Adeosun got a Landcruiser worth N14.54 million, Kwargana got Mercedes E350 worth N14.54 million, while Shonubi also got a Landcruiser worth N14.54 million, all from the bank they claimed they wanted to rescue from total collapse.

The defendants were also accused of paying medical/leave allowances to themselves from the bank's offshore account without the approval of shareholders as stated in Clause 77 of the bank's Articles of Association.

Those that benefited from the medical/leave allowance included Gobir, $60, 135. 20, Olusanya, $60, 735.20, Abubakar $60, 735.20, Odimegwu, $60, 135. 20, Okoloko, $60, 135. 20, Akande, $60, 735.20 and Yakubu, $72, 452.45.

They further alleged that Yakubu, Gobir and Olusanya were seeking to be re-elected back into the board of the bank after collecting $75, 600 and BPS13, 250. 00 as retirement benefits.

Already, Justice Molokwu has ordered that the respondents should be served through substituted means, while the plaintiffs were asking the court mandate them to render an account of their dealings in the conduct of the bank's affairs, and an order disposing any of the bank's assets.

They are also asking the court to direct that a general meeting of the members of Union Bank should be convened forthwith to consider the account of the respondents' dealings in the bank and the election of directors out of its members.

The shareholders further want the court to appoint an officer of court not below a deputy chief registrar or any other fit and proper person who shall either be a member of the Chartered Institute of Bankers, a chartered accountant or a legal practitioner of not less than 15 years of membership as a receiver and manager of the bank to realise and secure the assets of the bank pending the time the general meeting is held.