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L-R: Michiel Herkemij, managing director, Nigerian Breweries plc, with Lance Musa Elakama, deputy director-general, Nigerian Stock Exchange, at the NB Plc facts behind the figures at the floors of the exchange in Lagos, yesterday.
The Nigeria Deposit Insurance Corporation (NDIC) yesterday asked the House of Representatives to prevail on Ebitimi Banigo, Chika Mbonu, Jimoh Ibrahim and Tunji Adeniyi to refund over N2.7 billion belonging to three failed banks in the country.
Banigo, the ex-chairman of Allstates Trust Bank, was asked by the NDIC to account for N2.3 billion share subscribers’ monies his bank failed to remit to the Central Bank of Nigeria (CBN) from its public offer during the bank consolidation exercise, while Chika Mbonu, ex-managing director; Nick Opara-Ndudu, Ex-deputy managing director and Emmanuel Ihemedu, ex-executive director of failed Assurance Bank, are to account for N747.809 million depositors’ monies they failed to remit to the CBN.
The managing director of NDIC, Ganiyu Ogunleye, in a memoranda presented to the joint committee on capital market and banking and currency, also asked the lawmakers to prevail on Jimoh Ibrahim, managing director of NICON Insurance, to refund the irregular payment of N49.3 million by Trade Bank as brokerage fee, bank charges and cost of trip to Nigeria, for N2 billion investment by his company, Global Fleet which had been fully refunded.
“Given the House of Representatives’ concern about wrongdoings in failed banks, the joint committee is kindly asked to call on erstwhile chairman of Allstates Trust Bank, Ebitimi Banigo, to account for the sum of N2,395,650,175.00 paid directly to the defunct bank which was not remitted to the CBN by the bank. Unless he provides the N2.39 billion, the depositors to the failed public offer of Allstates Trust Bank will never recover their monies,” said Ogunleye.
Ogunleye stated further that the committee should request the former managing director of Trade Bank, Tunji Adeniyi, now with UBA plc to explain the basis of the N49.3 million he approved for payment to Jimoh Ibrahim.
But the former deputy managing director of Assurance Bank, Nick Opara-Ndudu in a quick reaction said he had resigned before the consolidation took place.
Opara-Ndudu said he resigned in June 2005 before the bank went to the capital market for capitalisation.
The NDIC drew the attention of the joint committee to the fact that the sum of N747, 809,000.00 realised from the private placement was less than 25 percent of the targeted sum.
Ogunleye noted that since the offer was unsuccessful, the defunct bank and the joint issuing House ought to have cancelled and returned the proceeds to the investors in keeping with the regulation of the Securities and Exchange Commission (SEC) concerning unsuccessful offers.
“Besides, the management of the bank also flouted the directive jointly issued by the SEC and CBN vide a circular dated October 4, 2005 to all market operators to transfer all subscription monies yet to be verified by CBN and the basis of allotment approved by the commission to the Central Bank of Nigeria (Escrow Account) within 48 hours of the circular. It is noteworthy that the attention of the management of the bank was drawn to the circular by Vetiva Capital Management vide a letter dated October 11, 2005,” he said.
On Trade Bank, Ogunleye said efforts by the corporation, including complaints and petition to the Economic and Financial Crimes Commission (EFCC) to get Jimoh Ibrahim refund the sum of N49, 326,712.32 has not been fruitful.
“As far as the corporation is concerned, it is fraudulent for Jmoh Ibrahim to collect two percent brokerage on an aborted investment by his company, Global Fleet Oil and Gas Company Limited. However, pursuant to the House of Representatives concern about wrongdoings in failed banks, the joint committee is kindly requested to assist the corporation in recovering the unquestionable payments totaling N49,326,712.32 made to Jimoh Ibrahim on the subscription of N2 billion by Global Fleet Oil and Gas Limited which was fully refunded to his related company. The recovery will enable the corporation repay the trapped funds of public sector institutions,” he said.
Ogunleye said NDIC petitioned EFCC last year over the N49 million collected by Jimoh Ibrahim from Trade Bank to facilitate his investment of N2 billion in the bank’s aborted public offer.
The petition to EFCC was accompanied with Trade Bank cheques for the N49 million and which were deposited into First Bank, Ikota International Market branch in November 2005.
According to the NDIC boss, Trade Bank’s cheque number 011114251 for N40 million representing two percent commissions for sourcing the N2 billion investments was drawn in Ibrahim’s name and paid to the First Bank, Ikota International Market branch account on November 1, 2005.
Trade Bank cheque number 011114252 for N1,326,712.32 was also drawn in Ibrahim’s name and paid into the First Bank Ikota branch on November 1, 2005. The amount was to defray his trip from London to Nigeria to ensure that the N2 billion cheques were honoured.
To refund bank charges debited to account at Oceanic Bank in respect of the N2 billion cheques issued for the share purchase, another Trade Bank cheque number 011114260 for N8 million was paid into Ibrahim’s account at the same First Bank, Ikota Market branch on November 7, 2005.
It would be recalled that Trade Bank plc in 2005 went to the capital market to raise N7.5 billion in its bid to meet the N25 billion recapitalisation exercise of the banking industry.
But the offer was unsuccessful and was aborted leading to the revocation of its operating licence and eventual sale to UBA plc under purchase and assumption strategy devised by the regulatory authorities to reduce the number of banks to go under.
NDIC said the N2 billion invested by Ibrahim for the share purchase was refunded to Global Fleet Oil and Gas by the CBN early in January 2006.
The NDIC official noted that the N49 million was demanded from Ibrahim because the N2 billion investments have been returned due to the failure of the Trade Bank offer.
“With the failure of the Trade Bank’s public offer, and full refund of N2 billion to Global Fleet, there was no basis for the total sum of N49.3 million paid to Jimoh Ibrahim. He was asked to refund the money but to date he failed to do so and ignored all demand letters and invitation to discuss the issue.
“Given that he is the major owner of Global Fleet, it is also irregular (may be fraudulent) to have collected commission on his company’s aborted investment from Trade Bank plc (now in liquidation),” the NDIC official concluded.
The managing director of NDIC, Ganiyu Ogunleye, in a memoranda presented to the joint committee on capital market and banking and currency, also asked the lawmakers to prevail on Jimoh Ibrahim, managing director of NICON Insurance, to refund the irregular payment of N49.3 million by Trade Bank as brokerage fee, bank charges and cost of trip to Nigeria, for N2 billion investment by his company, Global Fleet which had been fully refunded.
“Given the House of Representatives’ concern about wrongdoings in failed banks, the joint committee is kindly asked to call on erstwhile chairman of Allstates Trust Bank, Ebitimi Banigo, to account for the sum of N2,395,650,175.00 paid directly to the defunct bank which was not remitted to the CBN by the bank. Unless he provides the N2.39 billion, the depositors to the failed public offer of Allstates Trust Bank will never recover their monies,” said Ogunleye.
Ogunleye stated further that the committee should request the former managing director of Trade Bank, Tunji Adeniyi, now with UBA plc to explain the basis of the N49.3 million he approved for payment to Jimoh Ibrahim.
But the former deputy managing director of Assurance Bank, Nick Opara-Ndudu in a quick reaction said he had resigned before the consolidation took place.
Opara-Ndudu said he resigned in June 2005 before the bank went to the capital market for capitalisation.
The NDIC drew the attention of the joint committee to the fact that the sum of N747, 809,000.00 realised from the private placement was less than 25 percent of the targeted sum.
Ogunleye noted that since the offer was unsuccessful, the defunct bank and the joint issuing House ought to have cancelled and returned the proceeds to the investors in keeping with the regulation of the Securities and Exchange Commission (SEC) concerning unsuccessful offers.
“Besides, the management of the bank also flouted the directive jointly issued by the SEC and CBN vide a circular dated October 4, 2005 to all market operators to transfer all subscription monies yet to be verified by CBN and the basis of allotment approved by the commission to the Central Bank of Nigeria (Escrow Account) within 48 hours of the circular. It is noteworthy that the attention of the management of the bank was drawn to the circular by Vetiva Capital Management vide a letter dated October 11, 2005,” he said.
On Trade Bank, Ogunleye said efforts by the corporation, including complaints and petition to the Economic and Financial Crimes Commission (EFCC) to get Jimoh Ibrahim refund the sum of N49, 326,712.32 has not been fruitful.
“As far as the corporation is concerned, it is fraudulent for Jmoh Ibrahim to collect two percent brokerage on an aborted investment by his company, Global Fleet Oil and Gas Company Limited. However, pursuant to the House of Representatives concern about wrongdoings in failed banks, the joint committee is kindly requested to assist the corporation in recovering the unquestionable payments totaling N49,326,712.32 made to Jimoh Ibrahim on the subscription of N2 billion by Global Fleet Oil and Gas Limited which was fully refunded to his related company. The recovery will enable the corporation repay the trapped funds of public sector institutions,” he said.
Ogunleye said NDIC petitioned EFCC last year over the N49 million collected by Jimoh Ibrahim from Trade Bank to facilitate his investment of N2 billion in the bank’s aborted public offer.
The petition to EFCC was accompanied with Trade Bank cheques for the N49 million and which were deposited into First Bank, Ikota International Market branch in November 2005.
According to the NDIC boss, Trade Bank’s cheque number 011114251 for N40 million representing two percent commissions for sourcing the N2 billion investments was drawn in Ibrahim’s name and paid to the First Bank, Ikota International Market branch account on November 1, 2005.
Trade Bank cheque number 011114252 for N1,326,712.32 was also drawn in Ibrahim’s name and paid into the First Bank Ikota branch on November 1, 2005. The amount was to defray his trip from London to Nigeria to ensure that the N2 billion cheques were honoured.
To refund bank charges debited to account at Oceanic Bank in respect of the N2 billion cheques issued for the share purchase, another Trade Bank cheque number 011114260 for N8 million was paid into Ibrahim’s account at the same First Bank, Ikota Market branch on November 7, 2005.
It would be recalled that Trade Bank plc in 2005 went to the capital market to raise N7.5 billion in its bid to meet the N25 billion recapitalisation exercise of the banking industry.
But the offer was unsuccessful and was aborted leading to the revocation of its operating licence and eventual sale to UBA plc under purchase and assumption strategy devised by the regulatory authorities to reduce the number of banks to go under.
NDIC said the N2 billion invested by Ibrahim for the share purchase was refunded to Global Fleet Oil and Gas by the CBN early in January 2006.
The NDIC official noted that the N49 million was demanded from Ibrahim because the N2 billion investments have been returned due to the failure of the Trade Bank offer.
“With the failure of the Trade Bank’s public offer, and full refund of N2 billion to Global Fleet, there was no basis for the total sum of N49.3 million paid to Jimoh Ibrahim. He was asked to refund the money but to date he failed to do so and ignored all demand letters and invitation to discuss the issue.
“Given that he is the major owner of Global Fleet, it is also irregular (may be fraudulent) to have collected commission on his company’s aborted investment from Trade Bank plc (now in liquidation),” the NDIC official concluded.
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