CBN Defends Sale of Polaris Bank to IBB's Son-in-Law, Anwul, After Accusation of Favouritism
- The Central Bank of Nigeria has finally replied to the accusations that have trailed the sale of Polaris bank
- The bank was sold to Auwal Lawan Abdullahi who is the investor behind Strategic Capital Investment Limited (SCIL)
- Lawal's total investment is N1.35 trillion but made an initial front payment of N50 billion
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The Central Bank of Nigeria (CBN) has denied any wrongdoing in the recent sale of Polaris Bank.
It also described claims that a higher offer was made during the bidding process to buy the Bank as spurious, malicious, and misleading.
The apex bank stated this in a press release by its Director of Corporate Communications, Osita Nwanisobi on Wednesday, January 4, 2023.
Source: Twitter
The release is in response to an online publication that claimed that another party made a higher purchase offer during the sale of the bank compared to the offer that was eventually accepted by the central bank.
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The CBN said contrary to claims, the divestment from Polaris Bank was supervised by a Divestment Committee (Committee) comprising senior representatives of AMCON & CBN and supported by reputable legal and financial advisers. In addition, the divestment mode, process, and decision received requisite board and regulatory approvals.
The Punch reports that before selling the bank 25 firms were invited to participate in the sale process of Polaris Bank Limited via the execution of a non-disclosure agreement.
Legit.ng had earlier reported that the Central Bank of Nigeria and AMCON announced the completion of the sale of Polaris Bank’s entire shares to Strategic Capital Investment Limited (SCIL).
SCIL paid the upfront transaction fee of N50 billion, and in accepting the terms will repay fully the sum of N1.305 trillion being the consideration bonds injected by the CBN over 25 years.
Daily Trust reports that Auwal Lawan Abdullahi, the son-in-law of Ibrahim Babangida is the investor behind Strategic Capital Investment Limited (SCIL), the firm which acquired Polaris Bank.
CBN replies critics
Since the deal was finalized and announced it has attracted several criticisms from stakeholders who believe the deal was not transparent enough.
Nwanisobi in a long statement explains that has been constrained to correct these inaccuracies given the potentially grave implications for the stability of the bank, financial sector and the Nigerian economy.
The release read:
“The attention of the Central Bank of Nigeria (CBN) has been drawn to a spurious, malicious, and misleading online publication, which made several false claims concerning the recent sale of the Federal Government’s interest in Polaris Bank Ltd. Given the potentially grave implications for the stability of the bank, financial sector and the Nigerian economy, the CBN is constrained to correct these inaccuracies.
“For the records, the public is referred to the statement dated October 20, 2022 by CBN & AMCON announcing the sale of 100% equity in Polaris Bank to a new core investor, Strategic Capital Investment Limited (SCIL), wherein it provided copious details of the process by which the sale was conducted.
“At no time did any other party make a higher purchase offer as falsely claimed by the online publication. The entity in question, Fairview Acquisition Partners, had indicated an interest in acquiring two banks, including Polaris Bank, for a total sum of N1.2 trillion, an indicative offer which significantly discounted the existing N1.305 trillion debt owed by Polaris Bank to AMCON and so represented a material loss to the Federal Government.
The press release also addressed accusations that it did not consider the application of other potential bidders.
It continued:
“Notwithstanding, along with twenty-four (24) other parties, Fairview Acquisition Partners was invited by the financial advisors to participate in the sale process via the execution of a Non-Disclosure Agreement (NDA), the first stage of the process. The financial advisors informed the Committee that Fairview Acquisition Partners neither executed nor returned the NDA despite verbally confirming receipt of the agreement and after follow-up from the financial advisors. Therefore, Fairview Acquisition Partners did not take the opportunity to update their offer by participating in the divestment process and thus did not make a binding purchase offer for Polaris Bank.
“The divestment was executed based on the relevant laws, global best practices for bank resolutions, and requisite regulatory approvals. The Committee, along with its legal and financial advisers, conducted a rigorous technical and financial evaluation of the purchase proposals, assessing promoters’ fitness and propriety, offer price received vs. reserve price, funding structure and financial capacity, strategy and growth plans, amongst others.”
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Source: Legit.ng
