Emefiele accused of using proxies to buy banks
Jim Obazee, the special investigator appointed by President Bola to investigate the activities of the former Central Bank Governor, Godwin Emefiele, revealed in his report that the former top bank boss used powers of attorney to acquire some banks in the country.
The late Alhaji Ismaila Isa Funtua, an ally of former President Muhammadu Buhari, was also appointed alongside Emefiele in the acquisition of Keystone Bank and Polaris Bank.
According to PunchThis comes in the wake of the investigator's findings that Emefiele illegally deposited billions of naira in foreign currencies into no less than 593 bank accounts in the United States, United Kingdom and China without the approval of the board of directors of the main bank and the Investment Committee of the CBN.
Obazee discovered that the former CBN governor deposited £543,482,213 in fixed deposits only in UK banks without authorization. Emefiele, who is currently at the Kuje Custodial Centre, is being prosecuted for N1.2 billion procurement fraud.
Obazee, who was appointed special investigator in July, submitted his final report titled 'Report of the Special Investigation into CBN and Related Entities (recordable offences)' to the President on Wednesday. He had already submitted an interim report on the investigation of the CBN and related entities on December 9.
In his letters to the President, Obazee said he had concluded his investigation into the illegal acquisition of Union Bank by Titan Bank and was about to reclaim the two banks for the Federal Government.
He stated in his letter to the President: “When we carried out the investigation, we discovered that some people were used as proxies by Mr. Godwin Emefiele to create Titan Trust Bank and acquire Union Bank, all from ill-gotten wealth.
“We managed to obtain some documents and the investigation reports will lead to the confiscation of the two banks from the Federal Government. We have completed our investigation into this acquisition and have also held meetings with the relevant parties, except for Mr. Cornelis Vink, who is currently hospitalized in Switzerland.
“Otherwise, we are on the verge of recovering these two banks for the Federal Government.”
During the investigation into the takeover of UBN supervised by the Emefiele-led CBN, Obazee explained that he requested the apex bank to provide him with details of the deal.
The findings indicate that Titan Trust Bank sought the CBN's non-objection to its consolidation proposal with UBN, excluding its UK operations, through a letter dated October 25, 2021.
In the letter, the TTB stated that the consolidation was being contemplated in four phases through the acquisition of 91.5 percent of the issued shares of UBN; mandatory public offering for the remaining UBN shares; acquisition of any shares that were not voluntarily sold to TTB in the MTO; and merger of TTB and UBN with UBN as the surviving entity.
The TTB letter also stated that the consolidation would be financed through a combination of debt and equity. The CBN, in a letter dated March 9, 2022, did not grant objection to TTB's requests to obtain a US$300 million credit line from Afrexim Bank as well as a US$175 million capital injection from two shareholders existing TTB, Luxis International DMCC and Magna International DMCC.
The TTB, through a letter dated June 3, 2022, informed the CBN that it made payment of the purchase consideration to the selling shareholders on June 1, 2022, thus completing the acquisition of 93.41 percent of the issued shares of the UBN.
According to the investigator, the TTB sought approval for the mandatory acquisition of the remaining 6.59 percent of UBN shares, through a letter dated October 14, 2022.
The MTO was reportedly triggered by the successful acquisition of 93.41 percent of UBN shares and TTB received a no-objection to acquire the remaining 6.59 percent shares through a letter dated October 24, 2022.
On November 2, 2022, the TTB officially launched the MTO, offering to acquire the remaining shares and the MTO concluded with the TTB purchasing a further 0.64 percent of UBN's issued shares, thus bringing its total shareholding to 94.05 percent.
To approve a scheme between itself and the holders of the balance of 5.95 percent shares not yet acquired by the TTB following the order of the Supreme Court, the UBN called a meeting on June 13, 2023. This was expected to result in the transfer of outstanding shares from UBN to TTB.
The investigation report noted: “The process to acquire the remaining 5.95 percent of the issued share capital of UBN by TTB is underway through a court-ordered scheme of arrangement between it and the holders of the balance of 5.95 Percent.
“TTB has stated that its ultimate objective is to acquire 100 percent of the total outstanding shares of UBN.” Further investigation showed that TTB is owned by Luxis International DMCC and Magna International DMCC, based in Dubai, United Arab Emirates.
The two companies would be owned by Vink Corporation Middle East FZC, which is controlled by Cornelis Vink. However, efforts to verify the corporate status of Luxis and Magna in Dubai failed as they did not have a physical presence in the Arab country as claimed.
“This is contrary to Section 3(5) of the Banks and Other Financial Institutions Act, 2020. Consequently, they should not be allowed to operate or acquire a bank in Nigeria,” the report stated.
It stated: “The special investigator investigated the activities of the TTB and discovered that there is a mysterious shareholder who has granted interest-free long-term loans (without fixed repayment schedule) to the above-mentioned entities (Luxis International DMCC and Magna DMCC International). This mysterious shareholder is believed to be Mr. Godwin Emefiele.
“The special investigator requested the purported owner of TTB and ultimate acquirer of Union Bank of Nigeria, Mr. Cornelis Vink, to produce proof of funds, internationally verifiable bank statements (from the formation of the entities to date) and the shareholder who gave interest- free loans to the two entities separately, names, nationality, source of funds, proof of funds, bank statements) as well as relationship of the entities with Mr. Andrew Ojei, Jerome Shogbon, Rahul Savara, Winston Odeh, Adaeze Udensi , Ekene Louis, Godwin Emefiele, Macombe Omoile, Tunde Lemo, Mudassir Amry, Faruk Gumel, Oluremi Oni and Vink Corporation Middle East FCZ together with the details of the shareholder who also gave an interest free loan to Vink Corporation and yourself.
“A letter has arrived from the Union Bank of Nigeria claiming that he is ill and will only be able to meet the special investigator or submit the requested documents when he improves by the end of September 2023. From today, December 20, 2023, we are I haven't heard from him yet nor have I received any of the requested documents.
“We were informed that they want to seek a political solution. The special investigator understands that the TTB and UBN will be recovered by the Federal Government, reinforced and sold in the near future.
“A meeting was initially scheduled for December 5, 2023, with the Board of Directors of the two banks by the CBN Deputy Governor for Financial System Stability to conclude discussions on this matter. The meeting has been postponed.”
On the alleged acquisition of Keystone by Emefiele through proxies, the investigator explained that sometime in 2017, the Asset Management Corporation of Nigeria transferred N20 billion to Heritage Bank and based on this, the bank granted a loan of N25 thousand million to Isa Funtua/Emefiele promoters The Group's acquisition vehicle to purchase Keystone Bank and the loan were further secured by shares in the bank.
Following the acquisition, Keystone reportedly returned N20 billion to Heritage Bank as placement and Heritage subsequently repaid AMCON with the cash flow thus created.
The report read in part: “When the loan granted by Heritage Bank to the Isa Funtua/Emefiele acquisition vehicles matured with outstanding balance, the MD of Heritage Bank, which was then in severe liquidity crisis, asked for repayment. Unfortunately for the bank's shareholders, the Funtua/Emefiele group was unable to pay.
“Consequently, the director of Heritage Bank had his lawyers write to the bank on two occasions, threatening to acquire Keystone Bank based on the shares they had pledged as collateral.
“After much pressure from him, Keystone Bank created internal loans of about N50 billion between June and October 2019 and transferred the funds to repay Heritage Bank on behalf of shareholders.
“Before this, Godwin Emefiele, as governor of the central bank, had pressured the bank to have these loans created within Keystone Bank on behalf of his group.
“However, the bank director at the time resigned due to consistent pressure from him and shareholders to comply. The next in command, the deputy managing director, who later became the acting MD, also resigned within three months for the same reason.
“From then on, an executive director, who became interim general director, took a vacation to avoid pressure to approve the loans. Unfortunately, the GM, Risk Management (Mr. Tijjani Aliyu) and the GM, Corporate Banking (Mr. Niran Olayinka) approved the loans (about N50 billion) while he was away and transferred the funds to Heritage Bank for the repayment of shareholder loans. The aforementioned loans, which are not currently being repaid, have a total outstanding balance of over N64 billion.”
The investigation also discovered that the credit approval memoranda were passed on by the two GMs to the chairman of the bank, Alhaji Umaru Modibbo, who gave final approval for the disbursement, adding that the process bypassed the Credit Management Committee, the Committee Credit Board and full advice prior to disbursement. .
“As a reward, the two GMs were immediately appointed CEOs, while one of them became the MD of the acting MD, who supervised him. The domestic loans thus created are not being repaid and have deteriorated,” Obazee said.
The investigator informed the President that he had begun interrogating the AMCON managing director regarding the acquisition of Polaris and Keystone banks, as well as Arik Air, Aero Contractors and AMCON's financial reports.
The MD of AMCON reportedly told the investigator that “the liquidity support of N898 billion to Polaris Bank is not part of the SPA, which it should” and that “the N50 billion paid for the transaction by the preferred bidder is not received by AMCON”.
Obazee said a preliminary analysis of the case showed that “Keystone was acquired free of charge, as was Polaris Bank, and the special investigator should liaise with the CBN to recover these two banks for the Federal Government of Nigeria.”
Source: www.lindaikejisblog.com