REPORTS released by the Special Central Bank of Nigeria (CBN) investigator, Mr Jim Obazee, have alleged that the former apex bank governor, Mr Godwin Emefiele, used proxies to acquire three banks in Nigeria.
The reports, which focused on the acquisition of Union Bank, Keystone Bank and Polaris Bank, were submitted to President Bola Tinubu in two separate letters dated December 20, 2023, said Punch.
“Keystone was acquired for free as did Polaris Bank and the special investigator should liaise with the CBN to recover these two banks to the Federal Government of Nigeria,” said a statement in a letter to the president.
A report on the acquisition of Keystone Bank said that the Asset Management Company of Nigeria (AMCON) managing director moved N20 billion to Heritage Bank as placement in 2010. Consequently, Heritage Bank provided “a loan of N25 billion to the promoters of Isa Funtua/Emefiele group’s acquisition vehicles to buy Keystone Bank.”
The report said the loan was further backed by the shareholders of the bank. Upon acquisition, Keystone Bank returned the N20 billion to Heritage Bank as placement. “Thereafter, Heritage Bank repaid AMCON from the cash flow created.”
The report said when the loan granted by Heritage Bank to Isa Funtua/Emefiele’s acquisition vehicles matured with outstanding balance, the MD of Heritage Bank (which was then in serious liquidity crisis), demanded repayment but the Isa Funtua/Emefiele Group could not repay.
The MD of Heritage consequently asked his lawyers to write to Keystone Bank on two occasions, threatening to take over the institution based on the shares they had pledged as security.
After much pressure from him, the report said, Keystone Bank created internal loans of about N50 billion between June and October 2019 and moved the proceeds to repay Heritage Bank on behalf of its group.
“However, the MD of the bank at that time had resigned due to consistent pressure from him and the shareholders to comply. The internal loans so created are not being serviced and have gone bad.
“The special investigator has commenced the interrogation of the MD of AMCON to clarify the situation of the acquisition of both Polaris and Keystone banks beside Arik Air, Aero Contractors and the financial reporting by AMCON,” the report stated.
On the acquisition of Union Bank, one of the letters said that Titan Trust Bank (TTB) was used as the Special Purpose Vehicle (SPV) in the deal, alleging that the bank had sought CBN’s no-objection to its proposed consolidation with Union Bank (excluding its UK operations) in a letter of October 25, 2021, according to Daily Trust.
The investigator stated in one of his reports to the president that he
“discovered that some persons were used as proxies by Mr Godwin Emefiele to set up Titan Trust Bank (TTB) and acquire Union Bank, all from ill-gotten wealth. We were able to secure some documents, and investigation reports will lead to the forfeiture of the two banks by the federal government.”
The report noted that Mr Obazee held meetings with relevant parties involved in the deal, except for one Mr Cornelius Vink, who is hospitalised in Switzerland.
“We are on the verge of recovering these two banks for the federal government.”
The report said TTB considered the consolidation in four phases: acquisition of 91.5 per cent of the issued shares of UBN; mandatory tender offer for the remaining UBN shares; buyout of any share that were not voluntarily sold to TTB on the MTO; and merger of TTB and UBN with UBN as the surviving entity.
The TTB letter also stated that the consolidation was to be funded through a combination of debt and equity.
The CBN in a letter dated March 9, 2022 approved no-objection to TTB’s requests to obtain a $300m facility from Afrexim Bank, including the capital injection of $175m from two existing shareholders of TTB – Luxis International DMCC and Magna International DMCC.
The TTB, via a letter dated June 3, 2022, informed the CBN that it made the payment of the purchase consideration to the selling shareholders on June 1, 2022, and thus completed the acquisition of 93.41 percent of the issued shares of UBN.
TTB sought approval for the mandatory takeover (MTO) of the remaining 6.59 percent of UBN shares vide a letter dated October 14, 2022.
The MTO was triggered by the successful acquisition of 93.41 percent of the UBN shares, Consequently, TTB was granted a no-objection to acquire the remaining 6.59 percent of the shares through a letter dated October 24, 2022.
The investigation report noted, “The process to acquire the remainder of 5.95 per cent of the issued share capital of UBN by TTB is ongoing through a court-ordered scheme of arrangement between itself and the holders of the balance of 5.95 per cent.”
TTB is owned by Luxis International DMCC and Magna International DMCC, said to be based in Dubai, United Arab Emirates, Punch said.
The two firms are reportedly owned by Vink Corporation Middle East FZC, which is controlled by Cornelis Vink.
The report said this contravened Section 3(5) of the Banks and Other Financial Institutions Act, 2020.
“Accordingly, they are not supposed to be allowed to operate or acquire a bank in Nigeria,” the report declared.
The report noted that Mr Obazee had probed the activities of the TTB and discovered that there was a mysterious shareholder who had given interest-free long-term loan to, with no fixed repayment schedule, the entities mentioned above (Luxis International DMCC and Magna International DMCC).
“This mysterious shareholder is believed to be Mr Godwin Emefiele,” the report alleged.
“The special investigator requested the supposed owner of TTB and ultimate acquirer of Union Bank of Nigeria, Mr Cornelis Vink, to submit proof of funds, internationally verifiable bank statements (from incorporation of the entities to date), and the shareholder that gave interest-free loans to the two entities separately, names, nationality, source of fund, proof of fund, 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 that also gave Vink Corporation interest-free loan and your good self.
“A letter came from Union Bank of Nigeria claiming he is sick and can only come to meet with the special investigator or submit the documents requested when he gets well by the end of September 2023. As of today, December 20, 2023, we are yet to hear from him nor receive any of the requested documents.”
“We are informed that they want to seek a political solution. The special investigator is of the view that the TTB and UBN be recovered by the Federal Government, strengthened and sold in the nearest future.”
While Emefiele will be deemed innocent until proven guilty by a competent court, the reports align with some of the Economy Post‘s revelations on Polaris Bank, Wema Bank, Access Bank, GTB, among others.
A financial analyst, Mr Ken Abaribe, noted that the reports were an eye opener and showed that the entire financial system must be sanitised.
“It is an indication that the financial system is rotten. I will advise the current government to also probe how dollars were disbursed under Emefiele through the banks,” he added.
