CBN sacks mgt. of Union Bank, Titan Trust, two other banks

President Bola Tinubu has started the implementation of the report of the Special Investigator on Central Bank of Nigeria (CBN) and related entities, Jim Obazee with the dissolution of the board and management of Titan Trust Bank and three others.

The others are Union Bank of Nigeria Plc, Polaris Bank, and Keystone Bank.

A report by Insidebusiness Online disclosed that the decision to dissolve the boards was taken after a meeting between Yemi Cardoso, Obazee, and the board and management of the four banks.

It would be recalled that the investors in Titan Trust Bank refused to honour the invitation to a meeting with the Special Investigator.

Obazee, a special investigator, says his team has uncovered how Godwin Emefiele, the former CBN governor, set up Titan Trust Bank (TTB) to acquire Union Bank of Nigeria.

Obazee, the head of the special investigation panel on the CBN and related entities, revealed that  Emefiele used two Dubai-based companies — Luxis International DMCC (Luxis) and Magna International DMCC (MAGNA) — owned by Vink Corporation Middle East FZC, to set up Titan Trust Bank as proxies.

With the help of the Nigerian embassy in UAE, the panel report said the two companies do not have a physical presence in Dubai as claimed in their acquisition documents.

The panel also said such discovery contravenes section 3 subsection 5 of the Banks and Other Financial Institutions Act, 2020, adding that Luxis and Magna are not “supposed to be allowed to operate or acquire a bank in Nigeria”.

During the investigation, according to the panel, it was discovered that there is a mysterious shareholder who has issued interest-free, long-term loans to TTB with no fixed repayment plan.

The report said the mysterious shareholder was traced to be Emefiele.

From one financial scandal to another, Emefiele has been languishing in prison and facing a plethora of court charges concerning corruption since the beginning of Tinubu’s administration.

The former CBN governor was locked in the Kuje correctional facility after he was arraigned on a six-count charge bordering on procurement fraud valued at N1.2 billion from November 22 to December 12 because he failed to meet the N300 million bail granted him by a high court.

The Obazee-led panel said TTB had in a letter of October 25, 2021, sought CBN’s no-objection to its proposed consolidation with Union Bank excluding its UK operations.

This, the letter noted, should be in four phases: the acquisition of 91.5 percent of the issued shares of the UBN; mandatory tender offer (MTO) for the remaining shares of the UBN; buyout of any share not voluntarily sold to TTB on the MTO; and merger of TTB and UBN with UBN as the surviving entity.

According to the panel, the letter also stated that the consolidation was to be funded via a combination of debt and equity, and CBN via letters dated March 3 and 9, 2022, which granted no objections to TTB’s request to obtain a $300,000,000 facility from Afrexim Bank, as well as capital injection of $175,000,000 from two existing shareholders of TTB: Luxis and Magna.

The TTB, via a letter dated June 3, 2022, informed the CBN that it had made the payment of the purchase consideration to the selling shareholders on June 1, 2022, and had, thus, completed the acquisition of 93.4 percent of the issued shares of the Union Bank.

The report said the “ultimate goal of acquiring UBN hinged on the ongoing court-ordered scheme of arrangement between the TTB and the holders of the balance of 5.95%”.

Obazee has asked the federal government to take over the Titan Trust and Union banks by strengthening it for a lucrative future sellout