The immediate past governor of the apex bank, Mr. Godwin Emefiele allegedly used proxies to acquire an old generation bank, the Special Investigator on the Central Bank of Nigeria ( CBN), Mr Jim Obaze has said.

In his report , submitted to President Bola Ahmed Tinubu on December 20, Obaze detailed how a second generation bank was acquired in 2019 allegedly by Emefiele and a late businessman in circumstances deemed opaque. He further disclosed that the bank was acquired by the two individuals without evidence of payment

He rated Emefiele as a mysterious shareholder who gave interest- free, long-term loan (with no fixed repayment schedule) to the entities that acquired the old generation bank.

He said the two entities which acquired the bank do not have physical presence in Dubai in the United Arab Emirates where they claim to be domiciled.

He said by Section 3(5) of the Banks and Other Financial Institutions Act they are not supposed to be allowed to operate or acquire a bank in Nigeria.

He said when he wrote the supposed owner of one of the entities and the ultimate acquirer of the bank to submit proof of funds, the said owner claimed to be indisposed. He said since September, he has not heard from him.

Although he said those involved in the transactions are seeking “political solution”, he asked the Federal Government to recover the bank. He also recommended that the second generation bank acquired in 2019 be taken over by the government.

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He said the banks should be strengthened and sold in the nearest future.

He also said the internal loans created in the second generation bank in the process of acquiring it were not being serviced and had gone bad.

He said a former Managing Director of the bank resigned due to consistent pressure from Emefiele and the shareholders to create the loans.

These disclosures were contained in two separate letters to President Bola Ahmed Tinubu on December 20th by Obazee.

On the acquisition of the old generation bank , Obazee said he discovered that some persons were used as proxies by Emefiele to set up the main entity that acquired the bank.

He said his team has completed its investigation on the acquisition and has also held meetings with the relevant parties except an expatriate said to be hospitalized in Switzerland.

The investigator gave the story line of the acquisition to support his findings.

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He said the entity first sought the CBN’s no-objection to its proposed consolidation with the old generation bank, excluding its UK operations via a letter dated October 25, 2021. The entity stated that the consolidation was being contemplated in four phases.

·The acquisition of 91.5% of the issued shares of the bank

·Mandatory Tender Offer (MTO) for the remaining shares of the bank

·Buy out of shares that are not voluntarily sold to it( entity) on the MTO; and

·Merger with the bank, with the bank now the surviving entity.

The entity, in its letter stated that the consolidation was to be funded via a combination of debt and equity. CBN via letters dated March 3 and 9, 2022 granted no objections to the entity’s requests to obtain a $300,000,000 facility from Afrexim Bank as well as capital injection of $175,000,000 from two of its existing shareholders .

Via a letter dated June 3, 2022, it informed the CBN that it had made the payment of the purchase consideration to the selling shareholders on June 1, 2022, and had thus successfully completed the acquisition of 93.41% of the issued shares of the bank.

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It sought approval for the Mandatory Take-Over (MTO) of the remaining 6.59% of the bank’s shares vide a letter dated October 14, 2022. The MTO was triggered by the successful acquisition of 93.41% of the shares in the bank. The entity was granted a no-objection to acquire the remaining 6.59% shares vide a letter dated October 24, 2022.

He said on November 2, 2022, the entity officially launched the MTO, offering to acquire the remaining shares. The MTO concluded with the entity purchasing an additional 0.64% of the issued shares of the bank , thus bringing its total shareholding to 94.05% of the bank’s issued shares. .

Obazee said some of those behind the acquisition of the bank did not meet the requirement in Section 3 (5) of the Banks and Other financial Institutions Act. In particular, he alleged that the two groups behind the entity , both based in Dubai, have no physical presence in that country.

He said he contacted the Nigeria Embassy in UAE to verify the presence of the two groups in UAE as well as their corporate status. It was found that these entities do not have physical presence in Dubai as claimed. This contravenes Section 3 (5) of the Banks and Other financial Institutions Act, 2020. Accordingly, they are not supposed to be allowed to operate or acquire a bank in Nigeria.

He said he looked into the activities of the entity and discovered that there is a mysterious shareholder who has given interest – free , long term loan (with no fixed repayment schedule) to certain companies . This mysterious shareholder is believed to be Mr. Godwin Emefiele.

Concerning the acquisition of the second generation bank, Obazee claimed that Emefiele connived with some proxies.

He said the acquisition of the bank was without evidence of payment.

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His report said: “When we carried out investigation, we discovered that some persons were used as proxies with the connivance and assistance of Mr. Godwin Emefiele and the CBN ” to acquire the bank without evidence of payment.

The facts from the investigation show that :

AMCON moved N20billion to another bank as placement sometime in 2017. On the back of that, the bank granted a loan of N25billion to the promoters of the acquisition group to buy the second generation bank.

The loan was further backed by the shares of the bank . Upon acquisition, the second generation bank returned the N20billion back to the lending bank . Thereafter, the lending bank repaid AMCON from the cash flow so created.

When the loan granted by the lending bank to the acquisition group matured with outstanding balance, the MD of the lending bank (which was then in a serious liquidity crisis) called for repayment. Unfortunately for the shareholders of the bank,the acquisition group could not repay the loan.

Consequently, the MD of the lending bank got his lawyers to write to the bank on two occasions — threatening to take over the second generation bank based on the shares they had pledged as security.

After much pressure from him, the bank created internal loans of about N50billion between June and October 2019 and moved the proceeds to repay lending bank on behalf of the shareholders.

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He said before this, Emefiele, as Governor of the Central Bank , had mounted pressure on the bank for these loans to be created within the second generation bank on behalf of their group. However the MD of the bank at that time resigned due to the consistent pressure from him and the shareholders to comply.

He said the next in command – the Deputy Managing Director (DMD) who subsequently became the Ag. Managing Director (Ag. MD} also resigned within three months for the same reason.

He said thereafter an Executive Director who then became Ag. MD took his vacation to avoid pressure for the approval of the loans. Unfortunately, the GM – Risk Management and GM -Corporate Banking approved the loans (about N50billion) while he was away and moved the proceeds to the lending bank for the repayment of the shareholders’ loans.

He said the above loans which are not being repaid currently have a total outstanding balance in excess of N64billion.

“The Credit Approval Memoranda were passed by the two GMs to the Chairman 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. As a reward to the two GMs, they were immediately appointed Executive Directors while one of them became the MD over the Ag. MD who used to supervise him, ” he said.

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

How $6.23m was removed from CBN vault

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In another damning revelation, the Emefiele management team is said to have made a strange payment of $6.23milion from the vault of the apex bank in one day last February.

The beneficiaries are yet to be identified.

Earlier snippets from the probe about 593 foreign bank accounts allegedly operated illegally by Emefiele and others have already left many Nigerians in shock.

It was gathered yesterday the embattled former CBN governor,a former Secretary to the Government of the Federation (SGF) and 12 top officials of the bank may face trial in connection with the payment of the $6.23milion.

Those recommended for trial include directors, Deputy Directors, Assistant Director and Branch Controllers.

Two suspects have been arrested in connection with what was described by the Special Investigator as “forgery, concealment, conspiracy and fraud”.

The alleged withdrawal of the cash was committed at the Abuja branch of the CBN.

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The cash withdrawal was captured on CCTV,according to a document sighted by our correspondent.

The document details how the cash was withdrawn.

It reads: “Around the date, 7th February and 8th February, 2023, the sum of US$6.23 million was unlawfully removed from the vault cash from the Foreign Payments Office, Abuja Branch, of the Central Bank of Nigeria. The physical acts of the unlawful removal of this amount were captured on the CCTV footage which was viewed and preserved.

“Findings show that: A letter dated 23rd January, 2023, with a signature mark, ‘Muhammadu Buhari’, was sent to a government official with caption, ‘ Presidential Directive on Foreign Election Observer Missions’

“The letter referred to in (i), above, trail another letter dated 26th January, 2023, with signature mark, directed to’ Mr. Godwin Emefiele, the Governor, Central Bank of Nigeria’, for payment of the sum of $6.23million as ‘ a contingent logistics advance… in line with Presidential directive.

“A follow-up letter dated 31st January, 2023, was sent to the Governor, Central Bank of Nigeria, requesting for approval to effect payment of the sum of $6.23m.

“The letter referred to in {iii), above, contained a signature mark and approval notation of the Governor, Mr. Godwin Emefiele, and conveying consent to pay the sum of US$6.23m.

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“The letter referred to in (iv) above trailed a letter dated 7th February, 2023 sent to Abuja Branch, furthering process for the payment in cash of the sum of $6.23m to persons yet to be identified.”

The document said an official took steps, procured the dollar cash, and released same to persons yet to be fully identified.

It said another official of the CBN has admitted in a written statement that he “acted in collaboration with, an Assistant Director in the Banking supervision Department of the Central Bank of Nigeria and some persons he is yet to identify, to conceive and carry out the act of stealing the sum of $6.23million out of the vault of the Central Bank of Nigeria.

“A fraudulent cash withdrawal of $6.23million perpetrated since February 8 2023, was not discovered nor taken seriously till the 4th of December, when a Request for Information was issued by the Office of the Special Investigator.

“There is therefore an appearance of concealment by officers who occupied some positions up to, and around the period 7 and 8th February, 2023.”

The Special Investigator said he suspected that the CBN under Emefiele was printing money and converting it for its own use.

He said huge liquidity intervention in the banking sector by the CBN from 2014 to date was not derived from the operational income stream.

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He said he also suspected that the CBN was operating secret reserves which location was known only to itself and not disclosed in the Financial Statements of the years under review.

Another document reads: “There is no provision in any law in Nigeria where the CBN is authorized to print the national currency and convert same to its own use.

“The financial statements of the CBN over the years do not tally with its numerous financial interventions, save as it suggests that the CBN operates secret reserves which location is only known to itself and not disclosed in the Financial Statements of the years under review.

“For instance, the huge liquidity intervention in the banking sector by the CBN from 2014 to date was not derived from the operational income stream of the CBN.

“ On request, the CBN officials could not show the source of this fund. It is observed that the CBN determines its financial reporting standards; it ended up mixing-up cash basis with accrual basis in its accounting system.”

“The Bank’s Statement of Cash Flows in the audited financial statements, fail to show the source and application of the huge banking sector intervention and other 43 intervention programmes in several trillions of Naira from 2014.

“The overflow of this in subsequent years is indicative since the opening balance of one year is logically the ending balance of the preceding year. In situations like this, the only explanation is that money was printed by the CBN, and same was converted to its own use.”

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