By Ken Afor
The recent inquiry report on the operations of the Central Bank of Nigeria (CBN) has implicated Godwin Emefiele, the former governor of the apex bank, for allegedly utilizing illicitly acquired funds to procure banks under the guise of proxies.
Based on the report, Emefiele allegedly employed intermediaries to obtain Union Bank of Nigeria for Titan Trust Bank (TTB) Limited and Keystone Bank, without providing any substantiated proof of payment.
Consequently, the report suggests that the Federal Government should nullify the banks’ sale and assume control over them.
However, on Wednesday, Jim Obazee, the special investigator, appointed by President Bola Tinubu tendered two separate documents on the report of the acquisition of Union Bank of Nigeria and Keystone Bank.
This follows closely after the investigator discovered that Emefiele unlawfully deposited billions of naira in various foreign currencies across 593 bank accounts in the United States (US), United Kingdom (UK), and China, without obtaining the necessary approval from the apex bank’s board of directors and the CBN Investment Committee.
Also, Obazee discovered that the former governor of the Central Bank of Nigeria illicitly deposited £543,482,213 in fixed accounts exclusively within UK banks, without any form of authorization.
The various findings were captured in the report titled ‘Report of the Special Investigation on CBN and Related Entities (Chargeable Offences)’ and submitted to the President.
It would be recalled, on Friday, Emefiele who had been in and out of the court since his ordeal in June was released on Friday, December 22 after meeting his bail conditions, he still has case to answer following his involvement in a procurement fraud amounting to N1.2 billion.
Obazee, in his report, stated that he has concluded his inquiry into the illicit procurement of Union Bank by Titan Bank and is now on the brink of reclaiming both financial institutions on behalf of the Federal Government.
He stated, “When we carried out the investigation, we discovered that some persons were used as proxies by Mr Godwin Emefiele to set up Titan Trust Bank and acquire Union Bank therefrom, all from ill-gotten wealth.
“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 Cornelis Vink, who is currently hospitalised in Switzerland.
“Otherwise, we are on the verge of recovering these two banks for the Federal Government.”
As part of the investigation into the Union Bank of Nigeria acquisition overseen by the CBN under Emefiele’s leadership, Obazee clarified that he had asked the central bank to provide him with the specifics of the transaction.
According to the findings, Titan Trust Bank sought the CBN’s approval for its planned merger with Union Bank, with the exception of its operations in the United Kingdom. This request was made through a letter dated October 25, 2021.
The TTB letter outlined a four-phase plan for the consolidation, which involved acquiring 91.5% of UBN’s issued shares, making a mandatory tender offer for the remaining UBN shares, buying out any shares not sold to TTB voluntarily, and merging TTB and UBN with UBN as the surviving entity.
Additionally, the letter mentioned that the funding for the consolidation would come from a combination of debt and equity.
In a letter dated March 9, 2022, the CBN approved TTB’s request to secure a $300 million facility from AfreximBank.
Additionally, the CBN granted permission for a capital injection of $175 million from Luxis International DMCC and Magna International DMCC, two existing shareholders of TTB.
On June 3, 2022, TTB notified the CBN via a letter that it had successfully made the payment for the purchase consideration to the selling shareholders on June 1, 2022. As a result, TTB completed the acquisition of 93.41 percent of the issued shares of UBN.
The investigator stated that the TTB submitted a request for authorization to acquire the remaining 6.59 percent of Union Bank shares through a letter dated October 14, 2022.
The MTO was allegedly initiated after the successful purchase of 93.41 percent of Union Bank shares, and the TTB received approval to acquire the remaining 6.59 percent through a letter dated October 24, 2022.
The MTO was officially initiated by the TTB on November 2, 2022, with the aim of acquiring the remaining shares. As a result, the TTB successfully purchased an additional 0.64 per cent of the issued shares of UBN, increasing its total shareholding to 94.05 per cent.
In order to finalize the acquisition of the remaining 5.95 per cent shares, which were not purchased by the TTB as per the order of the Federal High Court, UBN organized a meeting on June 13, 2023 to seek approval for a scheme arrangement between itself and the shareholders.
It was anticipated that this would lead to the transfer of the remaining Union Bank shares to TTB.
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 stated that its ultimate objective is to acquire 100 per cent of the total outstanding shares of Union Bank.”
Upon further examination, it was discovered that Luxis International DMCC and Magna International DMCC are the owners of TTB. These companies are reportedly headquartered in Dubai, United Arab Emirates.
Initially, it was believed that Vink Corporation Middle East FZC, under the control of Cornelis Vink, owned both Luxis and Magna.
However, attempts to confirm the corporate existence of Luxis and Magna in Dubai were unsuccessful, as they were unable to provide evidence of a physical presence in the Arab country as they had previously 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,” the report declared.
It stated, “The special investigator probed the activities of the TTB and discovered that there is a mysterious shareholder who has given interest-free long-term loan to (with no fixed repayment schedule) to the entities mentioned above (Luxis International DMCC and Magna International DMCC). This mysterious shareholder is believed to be Mr. Godwin Emefiele.
“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.
“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 close out discussions on this matter. The meeting has been postponed.”
The investigator provided an explanation regarding the purported acquisition of Keystone by Emefiele through intermediaries. In 2017, the Asset Management Corporation of Nigeria transferred N20bn to Heritage Bank.
Subsequently, the bank extended a loan of N25bn to the promoters of Isa Funtua/Emefiele Group’s acquisition entity for the purpose of purchasing Keystone Bank. This loan was secured by the shares of the bank.
After the acquisition, Keystone Bank allegedly returned the N20bn to Heritage Bank as a placement, and Heritage Bank then repaid Asset Management Company of Nigeria (AMCON) using the generated cash flow.
The report read in part, “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, called for repayment. Unfortunately for the shareholders of the bank, the Funtua/Emefiele group could not repay.
“Consequently, the MD of Heritage Bank got his lawyers to write to the bank on two occasions threatening to take over Keystone Bank based on the shares they had pledged as security.
“After much pressure from him, Keystone Bank created internal loans of about N50bn between June and October 2019 and moved the proceeds to repay Heritage Bank on behalf of the shareholders.
“Before this, Godwin Emefiele as governor of the central bank had mounted pressure on the bank for these loans to be created within Keystone Bank on behalf of their group.
“However, the MD of the bank at that time resigned due to the consistent pressure from him and the shareholders to comply.
“The next in command, the deputy managing director, who subsequently became the acting MD, also resigned within three months for the same reason.
“Thereafter, an executive director, who then became the acting MD, took his vacation to avoid pressure for the approval of the loans. Unfortunately, the GM, Risk Management (Mr Tijjani Aliyu) and GM, Corporate Banking (Mr Niran Olayinka) approved the loans (about N50bn) while he was away and moved the proceeds to Heritage Bank for the repayment of the shareholders’ loans. The above loans, which are not being repaid currently, have total outstanding balance in excess of N64bn.”
The inquiry further revealed that the credit approval memoranda were submitted by the two GMs to the bank’s chairman, Alhaji Umaru Modibbo, who granted the ultimate approval for disbursement. It was observed that this procedure circumvented the Management Credit Committee, Board Credit Committee, and the full board prior to disbursement.
“As a reward, the two GMs were immediately appointed executive directors, while one of them became the MD over the acting MD, who used to supervise him. The internal loans so created are not being serviced and have gone bad,” Obazee submitted.
However, the President was notified by the investigator that the interrogation of the AMCON managing director had begun regarding the acquisition of Polaris and Keystone banks, as well as Arik Air, Aero Contractors, and financial reporting by AMCON.
The AMCON MD was said to have told the investigator that “the N898bn liquidity support into Polaris Bank is not part of the SPA, which it should” and that “the N50bn paid for the transaction by the preferred bidder is not received by AMCON.”
Obazee said a preliminary review of the case showed that “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.”
Matthew Bukkaa, SAN, the legal representative for Emefiele, was unavailable for comment regarding the allegations made against his client (Emefiele).
