With the liquidation of Titan Trust Bank’s board and management, among three other institutions, President Bola Tinubu has begun implementing the recommendations of Jim Obazee, the Special Investigator on the Central Bank of Nigeria (CBN) and connected entities.
Keystone Bank, Polaris Bank, and Union Bank of Nigeria Plc are the others.
The decision to disband the boards was made following a meeting between Yemi Cardoso, Obazee, the board, and the management of the four banks, according to an online report by Insidebusiness.
Recall that the Titan Trust Bank investors declined to accept the invitation to speak with the Special Investigator.
Special investigator Obazee claims that his team has discovered how former CBN governor Godwin Emefiele established Titan Trust Bank (TTB) in order to purchase Union Bank of Nigeria.
The head of the special investigative panel on the CBN and related firms, Obazee, disclosed that Emefiele established Titan Trust Bank as a stand-in using two Dubai-based businesses, Luxis International DMCC (Luxis) and Magna International DMCC (MAGNA), both controlled by Vink Corporation Middle East FZC.
The panel findings stated that the two businesses do not actually have a physical presence in Dubai as stated in their purchase forms, with assistance from the Nigerian embassy in the United Arab Emirates.
The Banks and Other Financial Institutions Act, 2020’s section 3 subsection 5 is also violated, according to the panel, which also stated that Luxis and Magna are not “supposed to be allowed to operate or acquire a bank in Nigeria.”
The panel stated that throughout the examination, it was found that TTB has been given long-term, interest-free loans with no set payback schedule by an unidentified stakeholder.
According to the article, Emefiele was identified as the enigmatic shareholder.
Since the start of Tinubu’s administration, Emefiele has been mired in a series of financial scandals, facing numerous court cases related to corruption while imprisoned.
The former CBN governor was placed under arrest on six counts of procurement fraud involving N1.2 billion between November 22 and December 12 and was kept in the Kuje Correctional Facility after he was unable to pay the N300 million bail set by a high court.
The panel led by Obazee stated that TTB had asked CBN in a letter dated October 25, 2021, to express no objection to its proposed merger with Union Bank, with the exception of its UK businesses.
The letter stated that this should be done in four stages: buying up 91.5 percent of the UBN’s issued shares; launching a mandatory tender offer (MTO) for the company’s remaining shares; purchasing any shares that the UBN does not want to sell to TTB on the MTO; and merging UBN and TTB so that UBN is the remaining company.
The panel further claimed that the letter indicated that the consolidation would be financed by a combination of debt and equity, and that CBN had approved TTB’s request for a $300,000,000 facility from Afrexim Bank in addition to a $175,000,000 capital infusion from Luxis and Magna, two of TTB’s current shareholders, via letters dated March 3 and 9, 2022.
In a letter dated June 3, 2022, the TTB notified the CBN that it had paid the purchase consideration to the selling shareholders on June 1, 2022, completing the purchase of 93.4 percent of the Union Bank’s issued shares.
The acquisition of UBN “ultimately hinged on the ongoing court-ordered scheme of arrangement between the TTB and the holders of the balance of 5.95%,” according to the article.
Obazee has requested that the Union banks and Titan Trust be taken over by the federal government in order to fortify them for a profitable future selling.