How Emefiele Used Proxies To ‘Buy’ Union, Keystone, Polaris Banks

How Emefiele Used Proxies To ‘Buy’ Union, Keystone, Polaris Banks

According to a report by Jim Obazee, the special investigator appointed by President Bola Ahmed Tinubu, the ousted governor of the Central Bank of Nigeria (CBN), Godwin Emefiele, is alleged to have utilized intermediaries to acquire Union Bank of Nigeria (UBN).

The late Alhaji Ismaila Isa Funtua, an associate of former President Muhammadu Buhari, was implicated alongside Emefiele in the procurement of Keystone Bank and Polaris Bank.

These acquisitions occurred separately over a period of time, as outlined in the report presented to President Tinubu on December 20, 2023. While the report has not been made public yet, Daily Trust Saturday gained access to some documents through reliable sources.

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President Bola Ahmed Tinubu appointed Jim Obazee, the chief executive officer of the Financial Reporting Council of Nigeria, as the special investigator on July 30, 2023.

The Union Bank acquisition

The report outlines the comprehensive steps taken to acquire Union Bank, one of Nigeria’s earliest financial institutions, in a memorandum to President Tinubu titled, “Report of the Investigation of the Acquisition of Union Bank of Nigeria by Titan Trust Bank.”

The special investigator had sought relevant documents from the Central Bank of Nigeria (CBN), and based on the obtained information, Titan Trust Bank (TTB) emerged as the Special Purpose Vehicle (SPV) for the acquisition.

As per the report, documents from the apex bank revealed that TTB, in a letter dated October 25, 2021, sought CBN’s no-objection to its proposed consolidation with Union Bank, excluding its UK operations. The consolidation was outlined in four phases: acquiring 91.5% of the issued shares of UBN; Mandatory Tender Offer (MTO) for the remaining UBN shares; buyout of any share not voluntarily sold to TTB on the MTO; and merging TTB and UBN, with UBN as the surviving entity.

The report also highlighted that the consolidation would be financed through a combination of debt and equity. CBN, through letters dated March 3 and 9, 2022, granted no objections to TTB’s request to secure a $300,000,000 facility from Afrexim Bank, along with a capital injection of $175,000,000 from two existing shareholders of TTB: Luxis International DMCC and Magna International DMCC, both purportedly operating from Dubai in the United Arab Emirates.

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TTB, through a letter dated June 3, 2022, informed the CBN that it had completed the acquisition by making the payment of the purchase consideration to the selling shareholders on June 1, 2022. As a result, TTB successfully acquired 93.4% of the issued shares of Union Bank.

The investigator stated in his report to the president that, “When carrying out our investigation, we discovered that some persons were used as proxies by Mr Godwin Emefiele to set up Titan Trust Bank 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.

“We have completed our investigation on this acquisition and have also held meetings with relevant parties except for Mr Cornelius Vink (currently hospitalised in Switzerland). We are on the verge of recovering these two banks for the federal government,” the document showed.

Acquisition of Keystone Bank

In another finding titled, “Report of the Investigation of the Acquisition of Keystone Bank,” submitted by the special investigator to President Tinubu, it was stated that after due diligence, it was discovered that some persons were used as proxies with the connivance and assistance of Emefiele and the CBN to acquire the bank without evidence of payment.

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It stated, “AMCON MD moved N20billion to Heritage Bank as placement sometime in 2010. On the back of that, Heritage Bank granted a loan of N25billion to the promoters of Isa Funtua/Emefiele group’s acquisition vehicles to buy Keystone Bank.

“The loan was further backed by the shareholders of the bank. Upon acquisition, Keystone Bank returned the N20bn back to Heritage Bank as placement. Thereafter, Heritage Bank repaid AMCON from the cash flow created.

“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 Isa Funtua/Emefiele Group could not repay.

“Consequently, the MD of Heritage 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 their 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,” it stated.

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