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How Emefiele used proxies to acquire banks – CBN investigator

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…says ex-CBN gov sold banks without payment evidence, recommends lenders’ forfeiture to FG

Report reveals how former apex bank boss approved interest-free loans for cronies

The report of the special investigation into the activities of the Central Bank of Nigeria has accused the immediate past governor of the apex bank, Godwin Emefiele, of using ill-gotten wealth to acquire banks for himself through proxies.

According to the report, Emefiele used proxies to acquire Union Bank of Nigeria for Titan Trust Bank Limited, as well as Keystone Bank without any evidence of payment.

As a result, it recommends that the Federal Government should reverse the sale of the banks and also take them over.

The special investigator, Jim Obazee, had on Wednesday submitted the report of his investigations into the acquisition of Union Bank and Keystone Bank to President Bola Tinubu in two separate letters dated December 20, 2023.

This is coming on the heels of findings by the investigator that Emefiele illegally lodged billions of naira in public funds in no fewer than 593 bank accounts in the United States, United Kingdom and China without the approval of the apex bank’s board of directors and the CBN Investment Committee.

Obazee found out that the ex-CBN governor lodged £543,482,213 in fixed deposits in UK banks alone without authorisation.

Emefiele, who is currently in the Kuje Custodial Centre, is being prosecuted for N1.2bn procurement fraud.

Obazee, who was appointed special investigator in July, submitted his final report tagged, ‘Report of the Special Investigation on CBN and Related Entities (Chargeable offences)’ to the President on Wednesday.

He had earlier submitted an interim report on the probe of the CBN and related entities on December 9.

In his letters to the President, Obazee said he had completed his investigation into the illegal acquisition of Union Bank by Titan Bank, and was on the verge of recovering 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 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.”

During the probe into the UBN acquisition supervised by the Emefiele-led CBN, Obazee explained that he requested the apex bank to furnish him with the details of the deal.

Findings indicate Titan Trust Bank sought the CBN’s no-objection to its proposed consolidation with UBN, excluding its United Kingdom operations via a letter dated October 25, 2021.

In the letter, TTB stated that the consolidation was being contemplated in four phases via 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 via a combination of debt and equity.

The CBN in a letter dated March 9, 2022 granted no-objection to TTB’s requests to obtain a $300m facility from Afrexim Bank as well as 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 per cent of the issued shares of UBN.

According to the investigator, the TTB sought approval for the mandatory takeover of the remaining 6.59 per cent of UBN shares vide a letter dated October 14, 2022.

The MTO was reportedly triggered by the successful acquisition of 93.41 per cent of the UBN shares and TTB was granted a no-objection to acquire the remaining 6.59 per cent 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 an additional 0.64 per cent of the issued shares of UBN, thus bringing its total shareholding to 94.05 per cent.

To approve a scheme arrangement between itself and the holders of the balance of 5.95 per cent shares not yet bought by the TTB following an order of the Federal High Court, the UBN convened a meeting on June 13, 2023.

This was expected to result in the transfer of the outstanding UBN 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 UBN.”

Further investigation showed that TTB is owned by Luxis International DMCC and Magna International DMCC, said to be based in Dubai, United Arab Emirates.

The two firms were said to 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 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.”

On the alleged acquisition of Keystone by Emefiele through proxies, the investigator explained that sometime in 2017, the Asset Management Corporation of Nigeria moved N20bn to Heritage Bank and on the back of that, the bank granted N25bn loan to the promoters of Isa Funtua/Emefiele Group’s acquisition vehicle to buy Keystone Bank and the loan was further backed by the shares of the bank.

Upon acquisition, Keystone reportedly returned the N20bn to Heritage Bank as placement and Heritage thereafter repaid AMCON from the cash flow so created.

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 investigation also found that the credit approval memoranda were passed by the two GMs to the bank’s chairman, Alhaji Umaru Modibbo, who gave the final approval for disbursement, adding that the process bypassed the Management Credit Committee, Board Credit Committee and full board before 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.

The investigator informed the President that he had commenced the interrogation of the AMCON managing director on the acquisition of both Polaris and Keystone banks besides 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.”

Counsel for Emefiele, Matthew Bukkaa, SAN, could not be reached for comments on the allegations levelled against his client.

He had yet to reply to a message sent to him on the matter as of the time of filing this report.

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Paris-bound bizman arrested with 111 cocaine wraps

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The National Drug Law Enforcement Agency has arrested a 48-year-old businessman, Emmanuel Orjinze, at the Nnamdi Azikiwe International Airport, Abuja, for ingesting 111 wraps of cocaine.

The suspect, who claimed to be a professional footballer in Europe, was arrested on May 21 during the outward clearance of an Air France flight to Paris, France.

This was made known in a statement signed by the agency’s Director of Media and Advocacy, Femi Babafemi, and shared on the agency’s website on Sunday.

The statement read, “Operatives of the National Drug Law Enforcement Agency have arrested a 48-year-old Paris, France-bound businessman, Emmanuel Okechuku Orjinze, for ingesting 111 wraps of cocaine, which he excreted after days of observation in the agency’s custody following his arrest at the Nnamdi Azikiwe International Airport, Abuja.

“Okechukwu, who also claims he is a professional footballer in Europe, was arrested on Tuesday, May 21, during the outward clearance of Air France flight AF 878 from Abuja to Paris, France.

“After a body scan confirmed he ingested illicit drugs, he was taken into custody where he excreted a total of 111 pellets of cocaine that weighed 1.603 kilograms over three days. The suspect claimed he did business in the maritime sector while still scouting for any European football club to engage him. ”

In the same vein, the NDLEA officers operating at the Murtala Muhammed International Airport, Ikeja, Lagos hinted that they had dismantled another drug trafficking syndicate at the airport.

This, they said in a statement, followed the arrest of four members of the network and the seizure of a total of 8kg of methamphetamine and 7.60kg of Loud, a synthetic strain of cannabis imported from South Africa.

The statement added that a drug trafficking syndicate was busted at the airport when an official was caught with illicit substances in their backpack and bag.

On May 21, 2024, the NDLEA officers, supported by aviation security, intercepted the official at Terminal 1 and discovered the drugs during a search, blowing the lid off the syndicate.

“A swift follow-up operation at the Ajao Estate area of Lagos led to the arrest of two other members of the syndicate: Chris Nwadozie and Chinedu Nwaosu. Further investigation led to the arrest of another member of the cartel working within the airport system on Saturday, May 25,” the statement added.

In a related development, the agency also arrested a freight agent, Sonubi Abiodun, for attempting to export eight parcels of cocaine concealed in paint buckets to the United Kingdom.

Additionally, the NDLEA operatives arrested suspects producing and distributing skuchies, a mixture of black currant and illicit drugs, in Lagos, and recovered 2,480 litres of the psychoactive substance.

In Cross River State, a suspect, Ogar Emmanuel, was arrested with 2.5kg of cannabis, while 290kg of cannabis was recovered from the warehouse of Usani Ikpi, who is still at large. Additionally, three suspects – Sa’adu Sule, Mukhtar Nura, and Hamza Nura – were arrested in Katsina State with 70kg of cannabis, which originated from Ogun State.

The statement added, “No fewer than five suspects including Ezekiel Munda, 30; and Sule Mustapha, 21, were arrested by the NDLEA operatives on Thursday, May 23, during raids at the Karu Abattoir, Jikwoyi and Tora Bora hill area of the FCT, Abuja, where 95.01kg of cannabis and different quantities of opioids were recovered from them.

“In Edo State, operatives arrested a physically challenged notorious drug dealer, Zekere Sufianu, 45, at Auchi town on Wednesday, May 22. At the time of his arrest, he was found with 751 grams of Loud, 178 grams of tramadol, and pills of swinol,” the statement concluded.

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FG suit against 36 govs over LG funds begins

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The Federal Government has approached the Supreme Court with a suit seeking to compel governors of the 36 states of the federation to grant full autonomy to the local governments in their domains.

The suit, marked SC/CV/343/2024, was filed by the Attorney-General of the Federation and Minister of Justice, Lateef Fagbemi (SAN), on behalf of the Federal Government.

The Federal Government is urging the apex court to issue “an order prohibiting state governors from unilateral, arbitrary and unlawful dissolution of democratically elected local government leaders for local governments.”

In the suit predicted on 27 grounds, the Federal Government accused the state governors of gross misconduct and abuse of power.

The FG, in the originating summons, prayed the Supreme Court to make an order expressly stating that funds standing to the credit of local governments from the Federation Account should be paid directly to the local governments rather than through the state governments.

The justice minister also prayed for “an order of injunction restraining the governors, their agents and privies from receiving, spending or tampering with funds released from the Federation Account for the benefits of local governments when no democratically elected local government system is put in place in the states.”

The Federal Government further sought “an order stopping governors from constituting caretaker committees to run the affairs of local governments as against the Constitutionally recognised and guaranteed democratically system.”

The originating summons was backed by a 13-paragraph affidavit deposed to by one Kelechi Ohaeri of the Federal Ministry of Justice.

Ohaeri, in the affidavit, averred that the AGF instituted the suit against the governors under the original jurisdiction of the Supreme Court on behalf of the Federal Government.

He said,“The Constitution of Nigeria recognises federal, states and local governments as three tiers of government and the three recognised tiers of government draw funds for their operation and functioning from the Federation Account created by the Constitution.

“By the provisions of the Constitution, there must be a democratically elected local government system and the Constitution has not made provisions for any other systems of governance at the local government level other than a democratically elected local government system.

“In the face of the clear provisions of the Constitution, the governors have failed and refused to put in place a democratically elected local government system even where no state of emergency has been declared to warrant the suspension of democratic institutions in the state.

“The failure of the governors to put democratically elected local government system in place is a deliberate subversion of the 1999 Constitution which they and the President have sworn to uphold.

“All efforts to make the governors comply with the dictates of the 1999 Constitution in terms of putting in place a democratically elected local government system has not yielded any result and to continue to disburse funds from the Federation Account to governors for non-existing democratically elected local government is to undermine the sanctity of the 1999 Constitution.

“In the face of the violations of the 1999 Constitution, the Federal Government is not obligated under Section 162 of the Constitution to pay any state, funds standing to the credit of local governments where no democratically elected local government is in place.”

The AGF, therefore, urged the apex court to invoke sections 1, 4, 5, 7 and 14 of the Constitution to declare that the state governors and state Houses of Assembly are under obligation to ensure a democratic system at the third tier of government in Nigeria and to also invoke the same sections to hold that the governors cannot lawfully dissolve democratically elected local government councils.

Furthermore, he urged to invoke sections 1, 4, 5, 7 and 14 of the Constitution to declare that “the dissolution of democratically elected local government councils by the governors or anyone using the state powers derivable from laws enacted by the state Houses of Assembly or any Executive Order is unlawful, unconstitutional, null and void.”

The apex court has fixed Thursday, May 30 for hearing.

Meanwhile, the Nigerian Union of Local Government Employees hailed the move by the Federal Government, saying it would join the lawsuit as a concerned party.

 

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JUST IN: Tribunal affirms Diri as Bayelsa governor

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The Bayelsa State Governorship Election Petition Tribunal sitting in Abuja, on Monday, upheld the election that produced Governor Douye Diri of Bayelsa State.

A three-man panel led by Justice Adekunle Adeleye dismissed the petition filed by the candidate of the All Progressives Congress, Timipre Sylva, and the party for lacking in merit.

In a unanimous decision, the tribunal held that the petitioners failed to prove any credible evidence to back up any of the allegations they raised against the re-election victory of Diri.

Details shortly…

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