Former Managing Director of Universal Merchant Bank (UMB), Peter Illiasu says the outcome of his suit against the bank should be a wake-up call for board members of local institutions not to interfere in their companies’ day to day operations.   

Mr. Illiasu was accused of not following due procedure in a 66 million dollar credit facility he issued to VRA which led to his dismissal in 2010. He subsequently sued the bank and a high court after four years has ruled that his dismissal is unlawful because it was based on an interim audit report. The bank has also been asked to compensate him with all his due benefits in the last four years.

Mr. Illiasu explains to Joy Business Editor, Emmanuel Agyei he is happy his name has been cleared of the allegations. According to him, the ruling only confirms undue interference from board members in the management of the bank’s operations which provides useful corporate governance lessons for indigenous entities.

“If you go around most of the well run multinational companies, you hardly find a board member having a complementary card. But as soon as board members are appointed to a local institution, that board member wants a complementary card, that board member wants to run the company as part of the executive management. If you look at well run organizations, they meet on quarterly basis and have 2 or 3 committees that also meet on quarterly basis. But local banks meet basically on monthly basis so at the end of the day, there’s a meeting every week and therefore you cannot find the time to go out there and do business or compete with other well run organizations like the Zenith Bank or the Stanbic Bank or the Standard Chartered banks or the Barclays banks of the world” he said.

Universal Merchant Bank was until now, owned by government and therefore had political appointments for its board members like other state-owned institutions.  Mr. Illiasu is worried this has led to political interference unduly working against some government-institutions.

“The interferences are too much. So many interferences that sort of mars the judgment of the Managing Director and members of the team. For instance, if you have a look at the credit portfolio of the local banks, most of them have gone bad because certain people have come out with political influences to influence certain decisions taken by the credit committees which I find to be awfully wrong.

"I don’t dispute that my appointment was politically-motivated but the board interviewed me with two other candidates and I was found to be the preferred choice and I don’t think in Ghana anybody disputes my contribution to the banking industry and for that matter my appointment as Managing Director of Merchant Bank” he concluded.