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CBN Probe: TTB shareholders’ companies have no physical presence, corporate status in Dubai –Special Investigator

Photo Collage of Mr. Tunde Lemo, Chairman of Titan Trust Bank and TTB and Union Banks' Logos Credit: Techeconomy

*The Office of the Special Investigator, in the Presidency, probing the activities of the Central Bank of Nigeria, summons Tunde Lemo, Chairman of  Titan Trust Bank, and two other principal shareholders of the financial institution for a ‘follow-up meeting’ slated  for December 28, 2023, in Abuja

Isola Moses | ConsumerConnect

The Office of Mr. Jim Obazee, Special Investigator, in the Presidency, which is probing the activities of Central Bank of Nigeria (CBN), has invited Mr. Tunde Lemo, Chairman of Titan Trust Bank (TTB), and two other shareholders of the commercial bank to a “follow-up meeting” slated for Thursday, December 28, 2023, in Abuja, FCT.

ConsumerConnect reports the latest summons to Lemo and two others is in connection with the reported controversial acquisition of Union Bank of Nigeria, in 2022.

Obazee, in a report he submitted to President Bola Ahmed Tinubu December 20, had stated Mr. Godwin Emefiele, a former Governor of CBN, used “ill-gotten wealth” to establish TTB and used it to acquire Union Bank and Keystone Bank through some persons serving as his proxies.

L-R: President Bola Ahmed Tinubu, GCFR, Ex-CBN Governor Godwin Emefiele and Mr. Jim Obazee, CBN Special Investigator

Obazee, in the report to the President, also recommended that the banks be forfeited to the Federal Government Government because of the alleged financial misappropriation.

The Special Investigator also issued the summons hours after Mr. Lemo, a former Deputy Governor of the CBN, had faulted his findings on the burning national issue.

Lemo, Titan Trust Bank defend acquisition

In his reaction to the submitted report and subsequent summons, Mr Lemo, Sunday, December 24, however, insisted that his bank followed due process and met all regulatory requirements, including that of the Securities and Exchange Commission and the Central Bank of Nigeria, in its acquisition of one of the oldest banks and iconic brands in Nigeria.

In an interview with published in Sunday Punch, the Chairman of TTB said: “The core shareholders and the banks will respond appropriately.

“Due process was followed in the establishment of Titan Trust Bank and every process that led to the acquisition of Union Bank was verified by the CBN, SEC and other regulators. “The core shareholders will respond to the specific allegations against them.”

Further still, a more elaborate, separate statement issued Sunday, the Corporate Communications Department of TTB noted the establishment of the bank and its acquisition of the larger Union Bank complied with Nigerian laws.

The bank stated: “On allegations relating to the ownership of Titan Trust Bank, the Board and Management provided the special investigators with the share ownership structure in TTB, including the holdings of Magna International DMCC and Luxis International DMCC owned by Mr Rahul Savara and Mr Cornelius Vink.

“These individuals are prominent global entrepreneurs, and have thriving businesses in Nigeria and several countries around the world.

“The shareholding structure is also verifiable at the Corporate Affairs Commission.”

Investigators’ reaction to TTB’s statement

Reacting to the bank’s claim in its issued statement, Eloho Okpoziakpo, a Deputy Commissioner of Police (DCP), who is the Head of Operations in the Office of the Special Investigator, in a letter December 24, rather invited Mr. Lemo and the two other major shareholders in TTB for a “follow-up meeting with the Special Investigators” in Abuja.

ConsumerConnect further learnt the two shareholders, Cornelius Vink and Rahul Savara, had failed to honour a previous invitation to a meeting with Mr. Obazee.

The Offices of the Special Investigator said: “Please refer to your discussion with the Special Investigator earlier today regarding the offensive defence that your good self issued in Punch Newspapers, on behalf of TTB which you Chair, as well as the e-mail you sent to the Special Investigator today wherein you tried to provide clarification on your reaction to the report on TTB.

“The defence seems contrary to the statements, made under caution, by the persons connected with these transactions, including your good self, before the Special Investigator at the Department of State Service (DSS) in August 2023.”

Okpoziakpo also said in the letter: “In the said newspapers, you referred to both Cornelius Vink and Rahul Savara as “prominent global entrepreneurs and having thriving businesses in Nigeria….

“In your e-mail as well as your earlier discussion with the Special Investigator, you suggested that both of them be invited to provide clarification on their share ownership and given seven days to make such clarification; failure which they will forfeit their shares to the Federal Government of Nigeria.”

The Office noted: “We are surprised at your request with regard to these two shareholders. They were given this opportunity via a letter to them dated 28th August, 2023 (copy attached as Appendix 1).

“Instead of honouring the invitation and providing the requested documents, we received a letter from the Company Secretary of Union Bank, Somuyiwa Sonubi, dated September 1, 2023, informing the Special Investigator that Mr. Cornelius Vink was out of the country on medical grounds and that both ‘Messrs Vink and Savara will be available for the meeting as soon as they are in Nigeria which will be soon’ (copy attached as Appendix 2).

‘Up until this offensive defence that you put in the public domain, the Special Investigator has neither heard from them nor received the requested documents.

“Accordingly, you are hereby invited to come along with Messrs Cornelius Vink and Mr. Rahul Savara to meet with the Team of Special Investigators by 2 p.m. on 28th December, 2023, at the Department of Force Intelligence (DFI), Opposite Nigeria Police Force Headquarters, Shehu Shagari Way, Area 11, Garki, Abuja, without fail or excuse.

“Please inform them to come along with all the documents/information requested from them by the letter to Mr. Cornelius Vink dated 28th August, 2023 (attached herewith as Appendix 1).”

The Head of Operations further stated: “You will also be required to make additional statements to your earlier statement on that day.

“Kindly note that if Messrs Cornelius Vink and Rahul Savara refused to attend this meeting and provide/defend the requested documents/information, it will be construed that they have decided to forfeit their purported shareholdings in TTB and Union Bank of Nigeria; irrespective of which vehicle that they are using to own the purported shares.”

The letter warned Lemo: “Should you also refuse to attend the meeting to provide additional statement to your earlier statement made in August 2023, it will be construed that you misled the Nigerian public with your reaction in The Punch Newspapers today, which has gained wide publicity in both electronic and print media.

“This invitation is to further ensure that it is beyond reasonable doubt that the Federal Government of Nigeria has given you a fair hearing.”

On Special Investigator’s report to President Tinubu

It is recalled that Titan Trust Bank acquired 94.05 percent of Union Bank in three phases between October 2021 and June 2022.

The bank told the Nigerian  banking sector regulators that the acquisition of Union Bank was funded through a $300 million facility it obtained from Afreximbank and a capital injection of $175 million from two of its shareholders, Luxis International DMCC and Magna International DMCC.

TTB shareholders’ entities have no physical addresses in Dubai: Obazee

Obazee, in his report to the Presidency, as well noted that his investigations revealed that those two companies are owned by Mr Vink, who the CBN Special Investigator reported he suspected to be a proxy for Mr. Emefiele, former Governor of CBN.

The two companies gave their locations as Dubai, so the Special Investigator said he contacted the Nigerian Embassy in UAE to verify their physical presence and corporate status as claimed.

However, Obazee stated in the report that his Office “found that these entities do not have physical presence as claimed.”

He said: “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.

“The Special Investigator probed into the activities of the TTB and discovered that there is a mysterious shareholder who has given interest-free long-term loans (with no fixed repayment schedule) to the entities.

“The mysterious shareholder is believed to be Mr. Godwin Emefiele.”

According to him, the Office of the Special Investigator had invited Mr. Vink August 2023 for proof of the funds he used in acquiring Union Bank, but the bank wrote back on 1 September, that he was ill and would submit the documents when he got back.

But the shareholder had not returned to Nigeria as of the time Obazee submitted his report to President Tinubu last week, in Abuja, the report said.

Obazee also disclosed that “we are informed that they want to seek a political solution.

“The Special Investigator is of the view that the Banks ( TTB and UBN) be recovered by the Federal Government, strengthened and sold in the nearest future.”

Union Bank’s acquisition conducted in most professional, transparent bidding process -TTB Management

Referencing the bank’s statement issued last Sunday, the Corporate Communications Department of TTB, disclosed it signed a Share Sale and Purchase Agreement December 18, 2021, with Atlas Mara Limited, Union Global Partners Limited, Emeka Emuwa, Standard Chartered Bank, Montane Partners West Africa Limited, TLG Africa Growth Impact Fund, and Sanlam Life Assurance Limited.

The bulk shareholders, according to the statement, together owned 93.41 percent of Union Bank’s issued Ordinary Share Capital.

“The SPA was the product of a long and tortuous due diligence process that involved leading financial and technical advisers.

“Titan Trust Bank engaged reputable firms like PricewaterhouseCoopers Limited for the financial due diligence; Drey Law Practice for the legal due diligence and Norton Rose Fulbright, UK, as legal advisers; and Citibank London as financial/transaction advisers.

“The bulk shareholders engaged a prominent UK law firm, White & Case, as their legal advisers on the transaction,” the bank said.

It also explained: “The acquisition was conducted in the most professional, open, and transparent bidding process.

“The acquisition was funded by a combination of debt ($300million) and an additional equity injection of about $190m, which was contributed by TTB’s two major shareholders – Magna International DMCC and Luxis International DMCC.

The Certificates of Capital Importation for both the debt and the equity financing evidencing the receipt of these funds into Nigeria by legal means have been made available where requested.

“The $300million acquisition facility is sourced from Afreximbank and is priced on SOFR with a margin of 6.25 percent (all together, almost 12 percent pa) and a moratorium period of 30 months.

“TTB has paid interest on the loan for three interest periods (18 months so far).

“TTB sought and obtained all necessary regulatory approvals from its primary regulator – the Central Bank of Nigeria, the Securities and Exchange Commission, the Nigerian Exchange Limited, and the Federal Inland Revenue Service, among others.”

The bank stated: “Following TTB’s acquisition of 93.41 per cent controlling interest in Union Bank on June 1, 2022, a change in control was effected with the dissolution of the former Board and the reconstitution of a new Board with new leadership.

“TTB proceeded to conduct a Mandatory Takeover Offer, which was legally triggered by the acquisition of 93.41 per cent of Union Bank by TTB, bringing the percentage float of Union Bank shares to less than 20 percent.

“The purpose of the MTO was to give the minority shareholders the opportunity to offer their shares on the same terms as was offered to the bulk shareholders.

“The MTO was conducted after all due regulatory approvals were obtained.”

Allegations bordering on ownership of Titan Trust Bank

TTB said: “On allegations relating to the ownership of Titan Trust Bank, the Board and Management provided the Special Investigators with the share ownership structure in TTB, including the holdings of Magna International DMCC and Luxis International DMCC owned by Mr Rahul Savara and Mr. Cornelius Vink.

“These individuals are prominent global entrepreneurs and have thriving businesses in Nigeria and several countries around the world. The shareholding structure is also verifiable at the Corporate Affairs Commission.”

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