Investors in the capital market are selling off their shares in Wema Bank to exit their investment in the financial institution amid allegation of illegal practice involving the company, according to Ripples Nigeria.
The alleged illegal banking practices attract a fine of N1.8 billion.
It was alleged that agents of Wema Bank were abusing personal data of Nigerians, in order to profit from it, against the regulation of the National Information Technology Development Agency (NITDA).
The bank had been opening accounts in the names of persons, whose personal information Wema Bank was in possession of, without approval. The data was believed to consist of the firm’s former customers and persons not banking with the lender.
In an email shared with Ripples Nigeria by one of the affected individuals, it was discovered that the unauthorised accounts were opened in a bid to achieve one million new accounts within one day, to celebrate ALAT, its digital platform, which clocked 5 years on May 2, 2022.
Checks showed that NITDA regulation frowns against the abuse of personal information or usage of private data without consent from owners of the information. This action is sanctionable by the deduction of 2% in annual turnover from the firm involved or fine of N10 million, depending on which is higher, and if the data in their possession is above 10,000.
Ripples Nigeria understands from findings, that Wema Bank reported N93.63 billion as revenue for twelve months of last year, which translate to the company risking N1.87 billion, if the NITDA probes the data breach allegation.
The regulation clearly states, “Breach of the privacy rights of any Data Subject under the NITDA Regulation shall, apart from other criminal liability, attract, with respect to Data Controllers dealing with more than 10,000 Data Subjects, payment of a fine of 2% of annual gross revenue of the preceding year or payment of N10 million, whichever is greater, with respect to Data Controllers dealing with less than 10,000 Data Subjects, a fine of 1% of the annual gross revenue of the preceding year or payment of N2 million, whichever is greater.”
Amid this N1.8 billion fine looming, investors are exiting their investment by selling off Wema Bank shares in a massive way that has caused the stock to fall 12.3% within two weeks of the Ripples Nigeria report from N3.65kobo per share to N3.2kobo per share as of Friday.
Demand for the share has dropped, as the capital market’s confidence in Wema Bank turned bearish, reflecting fear of further share depreciation, which has wiped off N5.78 billion from the value of investment held by current shareholders.