Investigation Reveals Alleged Proxy Use in Acquisition of Union, Keystone, and Polaris Banks by Sacked CBN Governor

Special Investigator’s Report Points to Godwin Emefiele’s Involvement in Controversial Bank Acquisitions

A recent report by Jim Obazee, the special investigator appointed by President Bola Tinubu, has unearthed controversial details surrounding the alleged use of proxies by the sacked governor of the Central Bank of Nigeria (CBN), Godwin Emefiele, in the acquisition of Union Bank of Nigeria (UBN), Keystone Bank, and Polaris Bank.

The investigative findings, submitted to President Tinubu on December 20, 2023, reveal a web of intricacies involving Emefiele and the late Alhaji Ismaila Isa Funtua in the acquisition of these financial institutions.

The Union Bank Acquisition:

The report sheds light on the detailed stages followed in the acquisition of Union Bank by Titan Trust Bank (TTB), identified as the Special Purpose Vehicle (SPV) for the transaction. The investigation claims that TTB, allegedly set up by Emefiele as a proxy, sought the CBN’s approval for a phased acquisition of Union Bank shares, ultimately consolidating the two entities.

According to the report, Titan Trust Bank received CBN’s no-objection to its funding plan, including a $300,000,000 facility from Afrexim Bank and a capital injection of $175,000,000 from Luxis International DMCC and Magna International DMCC, purportedly operating from Dubai. The investigation alleges that Emefiele used proxies to acquire Union Bank, stating that “documents and investigation reports will lead to the forfeiture of the two banks by the federal government.”

Acquisition of Keystone Bank:

In a separate finding titled “Report of the Investigation of the Acquisition of Keystone Bank,” the investigator details the alleged use of proxies, including a loan scheme involving Heritage Bank. The report claims that Isa Funtua/Emefiele’s acquisition group received a loan from Heritage Bank, backed by shares from Keystone Bank. The internal loans created by Keystone Bank, intended to repay Heritage Bank, are reported to have gone bad.

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The investigator is said to have initiated the interrogation of the Managing Director of the Asset Management Corporation of Nigeria (AMCON) to clarify the circumstances surrounding the acquisitions of Keystone and Polaris banks. Preliminary reports suggest that Keystone Bank was allegedly acquired for free, raising questions about the transparency of the transactions.

Union Bank, Keystone, and Polaris banks are yet to respond to the recent report. Despite efforts to seek clarification from Union Bank earlier this year, no official response was received. The ongoing investigations may bring further scrutiny to the acquisitions and raise pertinent questions about the regulatory oversight of these financial transactions.

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