Jim Obazee, a special
investigator, says his team has uncovered how Godwin Emefiele, the former
Central Bank of Nigeria(CBN) governor, set up Titan Trust Bank (TTB) to acquire
Union Bank of Nigeria(UBN).
Obazee, the head of the special
investigation panel on the CBN and related entities, revealed this in a report
submitted to President Bola Tinubu on Wednesday.
The report said Emefiele used two
Dubai-based companies — Luxis International DMCC (Luxis) and Magna
International DMCC (MAGNA) — owned by Vink Corporation Middle East FZC, to set
up Titan Trust Bank as proxies.
With the help of the Nigerian
embassy in UAE, the panel report said the two companies do not have a physical
presence in Dubai as claimed in their acquisition documents.
The panel also said such
discovery contravenes section 3 subsection 5 of the Banks and Other Financial
Institutions Act, 2020, adding that Luxis and Magna are not “supposed to be
allowed to operate or acquire a bank in Nigeria”.
‘EMEFIELE, THE MYSTERIOUS SHAREHOLDER ISSUING TTB FREE-INTEREST LOANS’
During the investigation,
according to the panel, it was discovered that there is a mysterious shareholder
who has issued interest-free, long-term loans to TTB with no fixed repayment
plan.
The report said the mysterious
shareholder was traced to be Emefiele.
From one financial scandal to
another, Emefiele has been languishing in prison and facing a plethora of court
charges concerning corruption since the beginning of Tinubu’s administration.
The former CBN governor was
locked in the Kuje correctional facility after he was arraigned on a six-count
charge bordering on procurement fraud valued at N1.2 billion from November 22
to December 12 because he failed to meet the N300 million bail granted him by a
high court.
HOW TTB ACQUIRED UNION BANK
The Obazee-led panel said TTB had
in a letter of October 25, 2021, sought CBN’s no-objection to its proposed
consolidation with Union Bank excluding its UK operations.
This, the letter noted, should be
in four phases: the acquisition of 91.5 percent of the issued shares of the
UBN; mandatory tender offer (MTO) for the remaining shares of the UBN; buyout
of any share not voluntarily sold to TTB on the MTO; and merger of TTB and UBN
with UBN as the surviving entity.
According to the panel, the
letter also stated that the consolidation was to be funded via a combination of
debt and equity, and CBN via letters dated March 3 and 9, 2022, which granted
no objections to TTB’s request to obtain a $300,000,000 facility from Afrexim
Bank, as well as capital injection of $175,000,000 from two existing
shareholders of TTB: Luxis and Magna.
The TTB, via a letter dated June
3, 2022, informed the CBN that it had made the payment of the purchase
consideration to the selling shareholders on June 1, 2022, and had, thus, completed
the acquisition of 93.4 percent of the issued shares of the Union Bank.
The report said the “ultimate
goal of acquiring UBN hinged on the ongoing court-ordered scheme of arrangement
between the TTB and the holders of the balance of 5.95%”.
Obazee has asked the federal
government to take over the Titan Trust and Union banks by strengthening it for
a lucrative future sellout.
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