Proxies connived with Emefiele, CBN to acquire Keystone Bank without payment evidence, says probe panel

A report by the special investigation panel on the Central Bank of Nigeria (CBN) and related entities, says Keystone bank was acquired without payment evidence.

The panel, led by Jim Obazee, a special investigator, said some persons were used as proxies with the “connivance and assistance” of Godwin Emefiele, the ex-CBN governor, and the central bank, to acquire the bank.

The report, which was submitted to President Bola Tinubu on Wednesday, comes after nearly six months of a probe on the activities of the CBN under Emefiele

The document details serious acts of corruption and theft in the CBN, perpetrated by senior officials of the bank, including Emefiele who regained freedom on Saturday after spending a month in the Kuje correctional facility for procurement fraud.

HOW THE BANK WAS ‘ACQUIRED’

Providing facts leading to the acquisition of Keystone Bank, the panel said the managing director (MD) of the Asset Management Corporation of Nigeria (AMCOM) moved “N20 billion to Heritage Bank as placement sometime in 2017”.

On the back of that, the report said, Heritage Bank granted a loan of “N25 billion to the promoters of ISA FUNTUA/EMEFIELE GROUP’S acquisition vehicles to buy Keystone Bank”.

The loan was further backed by the shares of the bank, the panel stated.

“Upon acquisition, Keystone Bank returned the N20billion back to Heritage Bank as placement. Thereafter, Heritage bank repaid AMCON from the cash flow so created,” the report partly reads.

“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 (ISA FUNTUA/EMEFIELE GROUP) could not repay.”

According to the report, when the group defaulted on the repayment, the managing director 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.

It was learnt that Keystone Bank, after much pressure from him, “created internal loans of about N5Obillion” between June and October 2019 and moved the proceeds to repay Heritage Bank on behalf of the shareholders.

Before this, the panel said Emefiele had used his position to mount pressure on the bank for the loans to be created within Keystone Bank on behalf of their group.

“However, the MD of the bank [Keystone] at that time resigned due to the consistent pressure from him [Emefiele] and the shareholders to comply,” the panel said.

Two other managing directors also avoided pressure to approve the loans through resignation and vacation.

Nonetheless, the loan (about N50 billion) was later approved by “the GM – Risk Management (Mr. Tijjani Aliyu) and GM -Corporate Banking (Mr. Niran Olayinka)”, with the proceeds moved to Heritage Bank for the repayment of the shareholders’ loans.

‘LOANS HAVE GONE BAD’

Meanwhile, the report said the concerned loan accounts in Keystone Bank are Bifem Global Ventures Limited, Bela Associates Limited, Ceder Embrace Limited, DV Hub Limited, Jinzel Aut Intenational Limited, Emerald Global Foods Limited (the two accounts).

The panel also found that the loans, which are not being repaid currently, have a total outstanding balance in excess of N64 billion.

The report also disclosed that the credit approval memoranda was passed by the “two GMs to the Chairman (Alhaji Umaru Modibbo) who gave final approval for disbursement.

“All through that process, they bypassed the Management Credit Committee, Board Credit Committee and Full Board before disbursement. However, they were subsequently ratified,” the panel said.

“The internal loans so created are not being serviced and have gone bad.”

AMCON MD UNDER INVESTIGATION

The report said the special investigator has commenced the interrogation of the MD of AMCON to clarify the acquisition of both Polaris and Keystone banks.

So far, the panel said the MD of AMCON stated in writing that the acquisition of Keystone Bank was paid by Sigma Golf – RuisBank Consortium, the preferred bidder.

He said two payments were received into the account with CBN; “N5.0 Billion and N20.08 Billion in June 2016 and March 2017 from Sigma Golf Consortium”.

However, the panel said the statement it received from the CBN confirming AMCON MD’s claims did not reflect the banks from which the money.

The probe panel, therefore, said “Keystone Bank was acquired for free”, based on a preliminary review of the case.