‘Process should be transparent’ — Reps ask CBN to suspend proposed Polaris Bank sale

The house of representatives has asked the Central Bank of Nigeria (CBN) to suspend the proposed sale of Polaris Bank Nigeria Limited.

The house made the ruling during a plenary session on Wednesday, following the adoption of a motion of urgent public importance sponsored by Henry Nwabuba, a lawmaker from Imo.

The green chamber said the planned sale of the bank should be put on hold until the CBN, Nigeria Deposit Insurance Corporation (NDIC) and the Asset Management Corporation of Nigeria (AMCON) conclude “all processes for an open, transparent, and competitive bid process in line with best practice and procedure for a divestment of this nature”.

There have been reports that the CBN has commenced plans to “secretly sell” the bank for N40 billion.

But Polaris Bank dismissed the report, describing it as “intending to cause panic”.

Polaris Bank was licenced and established in September, 2018, to assume all assets and liabilities of the defunct Skye Bank.

Leading the debate on the motion, Nwabuba said the divestment process should be transparently done.

“Given the need to ensure that the divestment in the bank does not jeopardise the core reason for the CBN intervention in the bank in the overall public interest, the divestment should be done most transparently following the required due process,” he said.

“This is necessary to avert public outcry and untoward reaction from critical stakeholders in the economy, foreign business partners banking community, depositors, correspondent banks — as it is also crucial to avoid the shortcomings of the previous similar exercise undertaken in the past.

“Polaris Bank is borne out of the bailout of the defunct Skye Bank PIc that failed due to poor corporate governance and non-performing loan for which a whooping sum of close to a trillion naira of public fund was committed to resuscitating the bank.

“The sale of the bank for a purported N40 billion amounts to just about four percent of public funds invested in the bank. The proposed sale is shrouded in secrecy and is opaque and requires that it is done with transparency and accountability to eliminate insinuations of corruption.

“The transited defunct Skye Bank was a systemically important bank with a large pool of employees, customers, and other stakeholders for which the failure of the bank, without a bailout, would have had a serious contagion effect on the economy and global perception/reputation.

“The resuscitation of the entity through the formation of Polaris Bank to acquire the assets and certain liabilities of the defunct Skye Bank was aimed at returning the value that will upset the public fund injected into the bank as capital, protect jobs and continue to contribute to the economic development of Nigeria.”

Nwabuba  further said the performance of the bank in the last three years shows that it has consistently been recording profit, meeting obligations, and improving performance ratios.

“In addition, the brand equity and public confidence have been enhanced with the relative stability of the bank,” he added.

The motion was passed after it was put to a vote by Idris Wase, the presiding officer.

The lawmakers also resolved to set up an ad hoc committee to “within twenty-one days, review the total outlay by the federal government of Nigeria in Polaris Bank and account for the entire financial input in the bank by the federal government of Nigeria.”

The committee will also determine if the “conditions and terms of sale are likely to ensure a positive return on public funds thus far committed to the bank, whether as bailout funds or other investments”.