23rd December, 2023
By Ayorinde Oluokun/Abuja
A Special Investigator appointed by President Bola Ahmed Tinubu, Jim Obazee, has busted the alleged maze of cobwebs woven around acquisition of the Union Bank of Nigeria Keystone and Polaris Banks by former CBN Governor, Godwin Emefiele.
Obazee revealed this in two letters he forwarded to the President on his findings over the acquisition of the banks.
The Special Investigator noted that the purported owners of the banks are already seeking a political solution to the problems identified with their acquisition, but he told the President not to give in, but to instead direct reacquisition of the financial institutions by the government.
The Special Investigator noted that its findings revealed Titan Trust Bank, the purported entity that acquired Union Bank was a front set up Emefiele.
“We were able to secure some documents and investigation reports will lead to the forfeiture of the two banks to the Federal Government. We have completed our investigation on this acquisition and have also held meetings with the relevant parties except for Mr. Cornelius Vink (that is currently hospitalized in Switzerland). Otherwise, we are on the verge of recovering these two banks for the Federal Government,” Obazee said in the report.
He traced the history of Titan Trust Bank Limited, TTB’s acquisition of Union Bank of Nigeria Plc (UBN) to October 25, 2021. TTB had in a letter to the apex bank expressed interest in acquisition of UBN excluding its UK operations via a letter dated October 25, 2021. TB explained how it will acquire UBN one hundred per cent in four phases in the letter, resulting in eventual merger of its own operations as a surviving entity with the older bank .
The company also said it will fund the acquisition with a combination of debt and equity. Consequently, TTB on in tters dated March 3 and 9, 2022 requested the permission of the CBN to obtain a $300,000,000 facility from Afrexim Bank as well as capital injection of $175,000,000 from two of its shareholders Messrs. Luxis International DMCC and Magna International DMCC for the purpose of the acquisition.
On June, 3, 2022, TTB told that it had made the payment of the purchase consideration to the selling shareholders on June 1, 2022, and had thus, successfully completed the acquisition of 93.41% of the issued shares of UBN. TTB followed up with the acquisition of the remaining 6.59% and acquisition of additional 0.64% of the issued shares of UBN, thus bringing its total shareholding to 94.05% of UBN’s issued shares while the process to acquire the remainder of 5.95% of the Issued share capital of UBN by TTB is ongoing through a court-ordered Scheme of Arrangement.
But the Special Investigator said its probe revealed that the acquisition of UBN was being done against the stipulations of Section 3 (5) of the Banks and Other financial Institutions Act. For one, he noted in the report that the two alleged owners of TTB, Luxis International DMCC (Luxis) and MAGNA International DMCC (MAGNA) operating in Dubai, UAE are allegedly owned by Vink Corporation Middle East FZC which in itself is owned by one Mr. Vink Cornelis.
But the Special Investigator said his investigations revealed that the entities do not have physical presence in Dubai as claimed. “This contravenes 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.”
He added that his findings revealed that a mysterious shareholder has given interest free long term loan (with no fixed repayment schedule) to the entities alleged to be the new owners of UBN. “This mysterious shareholder is believed to be Mr. Godwin Emefiele,” he said.
The report indicated that his request to the supposed owner of TTB to submit proof of funds by Mr. Vink Cornelis has not been responded to. “A letter came from Union Bank of Nigeria claiming that he is sick and can only come to meet with the Special Investigator and/or submit the documents requested when he gets well be the end of September 2023. As at today, 20th December 2023, we are yet to hear from him or receive any of the requested documents,” he said.
In the Keystone Bank, Obazee alleged that Emefiele said his investigations discovered that some persons were used as proxies with the connivance and assistance of Godwin Emefiele and the CBN to acquire Keystone Bank without evidence of payment. According to the report, the process began with movement of the sum of N20billion to Heritage Bank as placement by the Asset Management Company of Nigeria, AMCON sometime in 2017.
Based on the placement, Heritage Bank granted a loan of N25billion to the promoters of ISA FUNTUA/EMEFIELE GROUP’S acquisition vehicles to buy Keystone Bank. Shares of the Keystone Bank were also pledged as security for the loan. However, Keystone Bank returned the N20 billion back to Heritage Bank as placement, thus enabling Heritage bank to pay AMCON its N20 billion placement. But when 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) called for repayment.
Unfortunately for the shareholders of the bank (ISA FUNTUA/EMEFIELE GROUP) could not repay. Thus, the Special Investigator said his finding revealed that lawyers of Heritage Bank wrote Keystone on two occasions — threatening to take over the shares they had pledged as security. Consequently, Keystone Bank created internal loans of about N50billion between June and October 2019 and moved the proceeds to repay Heritage Bank on behalf of the shareholders.
But Obazee in his report said Emefiele had mounted pressure for the creation of the loan within Keystone Bank on behalf of their Group. The report indicated that the pressure led to resignation of the MD of the bank and his successor within three months of his appointment.
“Thereafter an Executive Director who then became Ag. MD took his vacation to avoid pressure for the approval of the loans. Unfortunately, the GM – Risk Management and GM -Corporate Banking (Mr. approved the loans (about N50billion) while he was away and moved the proceeds to Heritage Bank for the repayment of the shareholders loans,” he said.
The Special Investigator said the loans which are not being serviced have ballooned to N64 billion. 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 besides Arik Air, AERO Contractors Airline and the financial reporting by AMCON.
The Special Investigator said the MD of AMCON revealed that the source of the 25 billion for acquisition of Keystone was not revealed in the communication confirming the payment from the CBN.
“With regard to Keystone Bank, The MD of AMCON stated that, “The acquisition of Keystone Bank was paid by Sigma Golf — Ruis Bank Consortium, the preferred bidder based on my knowledge. Two payments were received into the account with CBN; N5.0billion and N20.08 Billion in June 2016 and March 2017 from Sigma Golf Consortium. The Statement we received from CBN confirming these payments did not reflect from which banks the money came from in both cases,” the Special Investigator said.
From the preliminary review of the case, it showed that Keystone Bank was acquired for free as do Polaris. The Special Investigator should liaise with the CBN to recover these two banks to the Federal Government of Nigeria.”