Home Finance Stench from Access Bank, Afribank, NSITF Deal

Stench from Access Bank, Afribank, NSITF Deal

by Business News Report

By Jonathan Elendu
Saturday, 04 November 2006
Agent denies transactions after billions of naira is paid
In 2004, when the Federal Government wanted to divest from financial institutions, the Delta State Government bought 16% shares in Afribank Nig Plc. Two months ago, Delta State Government advertised, in accordance with the law, the sale of its stake in Afribank. Security Swaps Ltd, a member of the Nigerian Stock Exchange did this on behalf of Delta State Government. Many banks and financial institutions, including, Ecobank, FCMB, and Vetiva Capital Management Ltd bid for the Delta Government shares in Afribank. This was an open bidding.
On the afternoon of Friday, August 11, 2006, Vetiva Capital was informed through a letter signed by Folabi Owolabi, managing director of Security Swaps Ltd, that they had won the bid. Chuka Eseka, the managing director of Vetiva Capital Management Ltd was invited to meet with Owolabi on Monday, August 14th 2006. Owolabi, in the letter, a copy of which we have in our possession, offered Vetiva Capital Management Ltd the seven hundred and seventy-two million shares (772,000,000) at ten naira, fifty kobo (N10.50) per unit. At the meeting Vetiva Capital Management Ltd was given a time frame for the payment of the shares. According to sources close to both companies, this was a trap. They were counting on Vetiva not being able to raise the money within the stipulated time.

Before the end of the next business day, Vetiva Capital Management Ltd paid about eight billion naira, being the value of the seven hundred and seventy-two million (772,000,000) shares into an escrow account at First Bank as requested by Security Swaps Ltd, agents of Delta State Government. The Vetiva executives sat back at their offices to wait for the transfer of the shares. They are still waiting, two months after buying Afribank shares owned by the Delta State Government.
Elendureports.com contacted Security Swaps Ltd and spoke with Folabi Owolabi, the company managing director. We wanted to know why shares bought by Vetiva Capital Management Ltd were yet to be transferred to them two months after they made the necessary payments. Owolabi denied selling any Afribank shares to Vetiva Capital Management Ltd. He said he had never dealt in any Afribank shares. Informed that we have a copy of the letter he wrote to Vetiva Capital Management Ltd dated August 11, 2006, he denied writing the letter. “I am not aware of such a letter,” Owolabi said. “Are you saying the signature on this letter we have in our possession is not yours?” we asked. “I am not aware of this transaction. I have never dealt in Afribank shares,” he insisted. “So what happened to the money paid by Vetiva Capital Management which is in an escrow account at First Bank?” “I am not aware of it,” said Owolabi.
Sources informed Elendureports.com that Gov. James Ibori is claiming that he did not authorize anybody to sell the shares of Afribank belonging to Delta State. Our investigations indicate that this denial is coming for a few reasons. We are reliably informed that Gov. James Ibori wanted these shares to go to Access Bank. He is said to be heavily invested in Access Bank using one D. Otubu as front and had pledged that these shares would be sold to the bank to facilitate its bid to acquire Afribank. The other reason, according to sources, is that Owolabi, allegedly, had been promised some largesse if he disowns the transactions which he initiated and completed. Folabi Owolabi and his company Security Swaps Ltd may also be in trouble for the sale of these shares as the conduct of the transactions may be fraudulent. According to sources, the other banks that participated in the bidding may be planning to make public the letters written to them by Owolabi on behalf of Security Swaps Ltd as the matter has been referred to the Economic and Financial Crimes Commission (EFCC) by an aggrieved party.
However, a senior law enforcement officer, who participates in investigations of the financial sector confirmed to us that Access Bank and their directors were being backed by some people at the Presidency. He confirmed the rumored relationship between Evelyn Brume and the President. Evelyn Broom is the managing director of Bank of Industry and the mother-in-law of Aig-Imoukhuede, the managing director of Access Bank. We spoke to people who have known Ms. Brume for a very long time. They all described her as beautiful, smart and powerful. They also confirmed her close and friendly relationship to the President and her antecedents at another bank. One of the people we spoke to said, “Evelyn is still very pretty, even at her age. She is super smart and would go for, and get whatever she needs. She is not a woman to be played with. She is very powerful in this country.”
A member of the board of directors of Afribank got a very disturbing call one afternoon. He was told that Access Bank had acquired Afribank and that he should prepare his handover notes. This call came from a member of the board of directors of Access bank. What gave them the confidence? They had acquired the 14.7% shares of Afribank which was held by the Nigerian Social Insurance Trust Fund (NSITF) and had been assured of the 16% shares of Delta State Government.
The acquisition of the NSITF shares by Access Bank has raised more questions than anybody, at least those who know, are willing to answer. Also the staff unions of Afribank are angry about the manner the shares were sold and those who bought them. They have publicly voiced their displeasure at the “lack of transparency that attended the sell of the NSITF shares.” They have also petitioned the Presidency and the EFCC.
There is also a whispering campaign going on as to how Access Bank was able to pay for the NSITF shares. Yet these questions do not have easy answers. According to a top intelligence source who discussed the shares acquisition with Elendureports.com, “these are very complicated transactions bothering on illegalities.”
Some Presidency sources suggested to this reporter that the money used in paying for the NSITF shares may have come from NNPC. “We know they got a lot of assistance from here (Presidency) and this is Nigeria. There is nothing anybody can do about it.” We insisted on the name of the person at the Presidency who assisted Access Bank in their acquisition of the NSITF shares. The source responded, “If Atiku or his people had done it, Aig-Imoukhuede would have been smelling rod now. Go and ask Mike Adenuga. Who do you think can give such instructions here?” A former managing director of a bank told Elendureports.com: “Some members of Access Bank top management are known for their business practice. They are known for converting corporate deposits to equity.”
In an open letter to Pres. Olusegun Obasanjo and published as an advertorial in the Guardian, the two labor unions representing Afribank staffers, ASSBIFI and NUBIFIE, implored the President to intervene in the matter of the sale of NSITF shares. Part of the open letter to the President and signed by Comrades Otio Nathaniel and Dayo Afolabi, reads, “…NSITF shares were to be surreptitiously negotiated and purportedly sold to Access Bank in complete violation of section 2d(i) and(ii) of the Banks and Other Financial Institutions ACT (BOFIA,1991) as well as Rules 235(i)a and b and 238(i) of Regulation of Take-over; since by law no bank can acquire controlling shares in another bank without approval of the regulatory authorities.”
The letter also pointed that this “singular regulation by the Government obstructed STB (now fused with UBA Plc) from exercising their intent of acquiring the BIAO shares then warehoused by BPE.” And they asked, “Why then is the case of Access Bank different?” This is the question many people in the financial sector have been asking: Why is Access Bank being treated differently?
A top law enforcement officer who has knowledge of this transaction told Elendureports.com, “It is not fair to say Access Bank and Aig-Imoukhuede are being treated differently. There are a group of Nigerians in the banking, oil and gas sector, trading and other areas of business that are given preferential treatment by this Administration. They can never do wrong as far as this President is concerned. Imoukhuede just happens to be one of them.”
While there may not be an official investigation of Access Bank going on now, Elendureports.com is aware that different groups are scrutinizing Access Bank and their dealings. This, eventually, may form the critical mass that may push the EFCC to act on petitions written to it by several people. “Don’t hold your breathe for this one,” said a source.

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