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How Sterling Bank illegally sold a customer’s collateral to its director — for peanuts

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Sterling Bank, the “one-customer bank”, has one customer giving it sleepless nights over a loan that not only went bad but has now snowballed into a major scandal in the banking industry, TheCable can report.

Grant Properties Limited, a property development company, has accused Sterling Bank of excising 10 hectares — which land it values at N5 billion — from a 50-hectare collateral and illegally selling it for pittance to a front company of a very senior director of the bank.

A Lagos high court has now ruled that the collateral was illegally sold, but there is also suspicion that the Asset Management Company of Nigeria (AMCON) is less than disinterested in the matter.

AMCON is accused of trying to arm-twist Grant Properties into abandoning the court judgment that nullified the sale of the collateral.

The business deal started in 2002 when Grant Properties secured a 50-hectare land in Lekki, Lagos state, to build “Victory Park Estate”.

It approached Unity Bank, Skye Bank, Wema Bank and Sterling Bank for an N8 billion ongoing loan to partly fund the project. Sterling was the lead of the consortium.

Grant Properties transferred the shares in its subsidiary, Knight Rook Limited, to the banks as security for the loan.

LOAN TRANSFERRED TO AMCON

After Grant Properties had secured the loan, it could not meet up with the repayment obligations. This also came at the time banks were experiencing liquidity problems, with many of them taken over by the Central Bank of Nigeria (CBN) which then set up AMCON to buy the bad debts.

The Grant Properties loan, which had gone bad, was transferred to the AMCON in 2011. At the time, the CBN had spent over $6.8 billion of tax payers funds purchasing the non-performing loans from failed banks.

Grant Properties was informed by Skye Bank, one of the banks financing the project, that it had assigned its own share in the project loans to AMCON.

The property company then approached AMCON with a proposal to finance the project and repay the loan. AMCON, however, advised the company to wait for other banks to transfer their share of the loans before entering negotiations with the corporation.

In handing over the debts to AMCON, Sterling Bank and others were required to transfer all Grant Properties’ collateral to the corporation.

ILLEGAL SALE OF LAND

Sterling Bank was expected to transfer, alongside the loan, every part of the land to AMCON, but it was discovered that the bank left out 10 hectares which it had sold to the Real Estate Development (RED) Company — said to be a front for a very senior director of the bank.

Olajide Awosedo, chairman of Grant Properties, said in a recent interview with journalists that a non-executive director of Sterling Bank had called him “face to face, brought out a survey of 10 hectares of my land and said, ‘Sir, sell this portion of land to me, if you want N10bn from my bank. I will make sure you get it. I am the chairman of real estate finance of the bank”.

He refused until AMCON took over the non-performing loan.

“They moved my loan to AMCON, but rather than transfer all my collateral with the loan, the bank (Sterling) withheld the 10 hectares its director had his eyes on and sold it to him through a surrogate company owned by the director and his associates,” Awosedo added.

He alleged that the director initially sold the land to his front company at N18,500/sq. metre, amounting to N1.85b for the 10 hectares — a far cry from the market worth of N5 billion, according to him.

About 2.4 hectares from the land was immediately sold to UAC Properties Development Company (UPDC), another property development company owned by UAC Plc, at a higher rate of N26,000/sq. metre. It was this that became the subject of litigation that ended in favour of Grant Properties.

The remaining 7.6 hectares were developed by Aircom Nigeria Limited, an estate development company, which built the “Cardogan Estate”. A three-bedroom apartment in the estate, TheCable gathered, goes for N48 million.

Curiously, Aircom is owned by Yemi Idowu — the non-executive director of the bank who managed the Grant Properties’ loan before the crisis.

In a seeming disregard for conflict of interest, the bank had appointed Idowu to manage a rival company’s — Grant Properties’ — account.

It appears to be a complicated web of intrigues and interests, which are said to be quite normal in the banking industry in Nigeria.

COURT SAYS SALE OF LAND ‘ILLEGAL’

Meanwhile, Grant Properties filed an action at the Lagos high court to challenge the sale of 2.4 hectares of the 10 hectares to UPDC in 2011. Six years after — precisely on June 2, 2017 — the court ruled that the land was sold by Sterling Bank AFTER the banks had assigned the company’s loan to AMCON.

The court also held that the documents of the sale were signed by Yemi Adeola, managing director (pictured), and Justina Lewa, company secretary of Sterling Bank. The bank, the court ruled, had acted alone as the other banks were not part of the sale.

A. J. Bashua, the judge, made an order nullifying the sale of the land.

“Justina Lewa who executed Exhibit F or DD2 (Deeds of Assignment) did not have power to do so and any such execution was done after interest had the transferred to AMCON,” the judgment read.

“Having therefore not complied with Exhibit C (Memorandum of Understanding) coupled to the fact that Exhibit DD2 (Deed of Assignment) was executed during the pendency of this suit, the sale to the 1st defendant amount to nullity. The claim of the claimants succeeds.”

UPDC is currently on appeal.

While Grants Properties pursued the case, Idowu and UPDC had continued developing the land — in defiance of two court orders obtained in 2012 ordering all parties to stop construction activities on the disrupted 10 hectares pending determination of the case.

“I hereby order that all the construction work engaged by either of or all the parties be stopped or abate forthwith,” T.A.O. Oyekan-Abdullai of the Lagos high court had ruled in July 2012.

But Idowu went ahead with the construction of Cadogan Estate and UPDC, on the other hand, built Alexander Miller Estate on the land, and over the years, and had apparently made huge profit while Grant Properties has been left to carry the burden of the debt obligations to AMCON.

AMCON COMPLICIT?

When it discovered that Sterling Bank had sold part of the land to its director, Grant Properties reported the inside trading to AMCON.

AMCON had promised to help retrieve the land, but it has done nothing or little to getting things rightly done, fuelling fears that the corporation is in bed with Sterling Bank.

Section 34(1) of the amended AMCON Act says when the corporation acquires an asset, the asset will be vested in the corporation alone and it shall exercise all the rights and powers of the financial institution. It adds that the debtor concerned and the financial institution would cease to have those rights.

In the event that the collateral is termed “restrictive”, section 36(1) of the acts says the financial institution from which the restrictive collateral is acquired shall hold such collateral in trust for and the sole benefit of the corporation.

AMCON did not intervene until an action was filed to challenge the sale. It has now instructed Grant Properties to withdraw the case from the court. Ordinarily, the court victory would be seen as a positive for AMCON — it would take possession of the property and recoup the loan it paid to pay off the bad debt. But it only got curiouser and curiouser.

Meanwhile, terms of settlement were proposed by Lanre Olaoluwa, AMCON’s receiver/manager, that: AMCON would provide N2 billion to help Grant Properties complete the project and settle the loan; the banks would refund the assumed secret profit of N750 million based on the assumption that the 10 hectares were resold at 26,000/sq. metre; Grant Properties would ratify the sale of the land; and that the terms of settlement would be entered in the court as a consent judgment binding all parties.

Before signing the terms of settlement, Grant Properties had been informed of AMCON’s board rejection of the proposal. The company, however, met with AMCON top officials and it was agreed that AMCON’s management would write to Sterling Bank to return the land it illegally took.

Grant Properties was later invited by the CBN to respond to a complaint from AMCON’s board. AMCON had refused to write the agreed letter, and Kola Ayeye, AMCON’s executive director, denied any record of the board intervening in the resolutions reached.

The role of AMCON has come under scrutiny because technically, it owns Knight Rook, the company whose shares served as collateral for the loan to Grant Properties. With a positive court judgment, it means AMCON has enough collateral to settle the loan.

“That is why it is surprising that AMCON is rejecting the judgement,” an insider in the deal told TheCable.

EVICTIONS, TORTURE, HARASSMENT

In a debt recovery action, the AMCON Act gives exercising power to its receiver/manager over all the assets and entire undertaking of the debtor company notwithstanding that only a part of the assets of the debtor was charged, or pledged as security in relation to the asset acquired by the corporation.

This, the act maintains, must be carried out without prejudice.

After securing a judgment in its favour over the land sold by Sterling Bank, Grant Properties, in June 2017, wrote to AMCON, enclosing a certified copy of the judgment, and a proposal to repay its loan. The company, in its letter, asked AMCON to value the land and the developments on it, and then take its payment from the property.

A day after AMCON received the company’s letter, armed thugs and policemen sent by AMCON’s receiver manager, Olaoluwa, allegedly took over the company’s property in a coordinated attack across the premises. In the process, it was alleged, members of staff of the company were beaten.

“My children and grandchildren have been rendered homeless,” Awosedo said in a statement. “The eviction of my children from their homes is particularly baffling, given the fact that two of the residences are rented accommodations which cannot be attached toward any debt.”

Awosedo and one of his sons suffer from apnea, a condition which affects the breathing system while sleeping, and they had always slept with the aid of continuous positive airway pressure (CPAP) machines which were taken from them.

“We pleaded with them to give us access to our machines, but our requests were denied,” Awosedo said in the statement. The receiver threatened that even if they were going to die of apnea, they would not be allowed access to the CPAP machines, according to him.

In an email exchange between Awosedo and Ayeye, seen by TheCable, Ayeye said that AMCON would advise the receiver/manager to consider releasing properties extraneous to the AMCON loan.

The receiver is harassing consumers who bought property in Victory Park Estate for not having done due diligence before purchasing. He said they bought AMCON land and they must pay AMCON again to regularise their titles.

According to the eeceiver, all titles as far back as 2006 was “AMCON” land, whereas it was only in 2011 that AMCON took over the loan.

THE CURIOUS CASE OF AYEYE

Ayeye, an AMCON executive director, allegedly told Grant Properties that the court judgment in its favor was of no consequence.

“The issue of the land was settled as far as AMCON is concerned,” he reportedly said. Ayeye also reportedly revealed that AMCON had taken N501 million from the bank — profits secretly made from the sale of the land — in order to ratify the title.

When Ayeye was reminded that AMCON cannot ratify an illegal act, or refuse to recognise a court judgment, he said Grant Properties should forget about the judgment and the 10 hectares of land.

AMCON and Ayeye insist that Grant Properties must not refer to the judgment, leading to speculation about the neutrality of AMCON. It had also warned Grant Properties to refrain from making any complaint to the Economic and Financial Crimes Commission (EFCC) or any other law enforcement agency.

The land illegally sold by Sterling Bank and the property on it are worth at least N30 billion today, according to Grant Properties. This is more than enough to settle their loan obligations to the corporation, which might have ballooned to about N20 billion when interests and penalties are factored in.

‘PROCEEDS OF SALE WAS PASSED TO GRANT PROPERTIES’

Responding to TheCable’s enquiry, Sterling Bank said the proceeds of sale of the 10 hectares was passed to Grant Properties.

“It is instructive to note that the proceeds of sale of the 10 hectares was passed to Grant Properties/Chief Awosedo for onward transmission to the subscribers that had demanded for a refund,” Olubukola Adejokun, the bank’s spokesperson, said in the email sent to TheCable.

The bank also said the 10 hectares was sold to RED and not Idowu, althought it was silent on the beneficial owner of RED.

“Sterling Bank could not have singlehandedly sold any part of the land as the security was pledged to the banking consortium that financed the project,” Adejokun explained, adding that “the decision to sell the 10 hectares was a joint decision between the consortium of banks (Wema, Skye, Unity and Sterling) and the developer (Grant Properties/Chief Olajide Awosedo).”

Asked if the sale was is in line with the AMCON Act which states that an eligible financial institution, Sterling Bank and others in this case, must hand over all assets to the corporation, Sterling Bank said “the 10 hectares had been sold before the transfer of loan to AMCON and therefore did not form part of the assets transferred to AMCON by the consortium of banks”.

The bank also said that it is not true that the court pronounced the sale illegal.

“The court ruling related to only 2.4 hectares out of the 10 hectares which the RED Company subsequently sold to UAC Property Development Company (UPDC) and this is now subject of an appeal at the Court of Appeal Lagos,” he added.

Although the case was between Grant Properties and UPDC — with a larger focus on the 2.4 hectares sold to the latter — the judgment, as against Sterling Bank’s claims, declared that the sale to either RED company or UPDC was done after the banks had transferred its right and interest to AMCON. This is against AMCON’s Act.

‘OUR LAWYERS WILL ISSUE A RESPONSE’

When TheCable spoke with Ayeye, he sounded furious on the phone.

“Grant Properties is just throwing wrong news everywhere,” Ayeye said. “You guys should be careful of somebody who was owing banks for about five years before AMCON took over, and for eight years that AMCON has taken over, the company has not paid us one penny.”

He asked TheCable to reach the corporation’s corporate affairs department for details.

Jude Nwauzor, AMCON’s head of corporate affairs, told TheCable that the legal department was working a rejoinder to these allegations.

“It is a running case, it didn’t just start. Our lawyers have looked at all these and they are coming with a response. We have never acted outside the jurisdiction of the law,” he said.

He explained that AMCON, being a creation of the law, is regularly being monitored by committees from the national assembly.

“These committees have an oversight function on AMCON, and from time to time, they invite the management for questioning. So, whatever we do, when we take over properties, we only do that by the order of a court as mandated by the act establishing us,” he said.

Further asked why AMCON has ignored a court order obtained in favor of Grant Properties, Nwazor urged patience as AMCON’s lawyers have been directed to issue a proper response to all allegations.

Idowu, a key player in this matter, was not ready to provide answers to questions thrown at him. “It is a personal corporate matter between two big businessmen and it has nothing to do with public interest,” he told TheCable.

“The case is in court and it is not something I should talk about,” he added.

In its code of conduct, Sterling Bank warns its directors to avoid conflict of interest in the discharge of their duties.

“A conflict of interest can arise when a director or a member of his immediate family receives improper personal benefits as a result of his or her position as a director of the bank,” part of the code of conduct reads.

“Competing with the bank for the purchase or sale of property, products, services or other interests” is listed as an example of situations that may constitute conflict of interest.

In the meantime, Grant Properties has petitioned the President Muhammadu Buhari, the CBN, the senate president, the speaker of the house of representatives and the inspector general of police. There is yet to response or action from any of them, according to the company.

 

Cable

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Jim Ovia: Garlands To ‘Grandfather’ Of Banking

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Thomas Imonikhe

Though of noble birth, Mr. Jim Ovia, the pioneer Managing Director of Zenith Bank Plc and current chairman of its board realized early in life that having blue blood in one’s veins wasn’t enough ticket to guarantee stardom in one’s chosen endeavor and opted for the narrow path? And unlike the present dispensation in the country whereby desperation for materialism has dwarfed the age tested virtues of honesty and dignity in labor, Ovia, apparently due his strict upbringing in the royal court imbibed integrity and hardwork holding the attributes firmly as master keys that will unlock all doors in his life journey.

Little wonder therefore that the topmost banker who will clock 68 on Monday November 4th has attained not only the pinnacle of his chosen career –banking but regarded as an exceptional role model to many upcoming Nigerians especially those with eyes on business.

He is also reputed to be a reference point on philanthropy. Indeed his distinguished attainments also in business, as motivational speaker, writer and in the information technology communication, ICT remains a classic example of someone who waded through life journey from grass to grace.
A prince, Jim Ovia was born on the 4th of November, 1951 to Obi Olihe of Agbor-Obi, one of the most revered royal fathers in Agbor Kingdom, Delta State , attended Ika Grammar School, Bojiboji-Owa for his secondary education before traveling to the United States for the proverbial golden fleece, where he had his tertiary education.

While there, he bagged a B.Sc. degree in Business Administration from Southern University, Baton Rouge, Louisiana, and later Master’s degree in Business Administration from University of Louisiana, Monroe. He is also an alumnus of Harvard Business School.

Ovia admitted that he was encouraged to venture into his course of study by his uncle and thereafter resolved to excel in his chosen career, adding that his golden rule since then has been ‘honesty and integrity’. “Always honour contracts: it is very important to be of tremendous integrity.

Those who try to take shortcuts will always fail’’ he declared in one of his famous quotes. No doubt, his life philosophy above has a fundamental backing of American billionaire Warren Buffet who maintained that three attributes: intelligence, energy and integrity are a must for any one aspiring to be an achiever with integrity not negotiable.

For him, without integrity the other two attributes are useless. Rather than stay back in the U. S. to savour the vast opportunities, Ovia upon graduating, returned to his fatherland, joined Union Bank for his National Youth Service Corps (NYSC), and worked in Lion Bank where he rose to the position of branch manager in Lagos.

He later joined International Merchant Bank (IMB) in 1980 rising from financial analyst to bank manager from where he moved to Merchant Bank of Africa. And following an unblemished career in the affected banks coupled with the experience garnered, he alongside some investors established Zenith Bank in May 1990 after the administration of former military president Gen. Ibrahim Babangida deregulated the banking sector.
As prime mover of the financial institution, he became the pioneer managing director and chief executive officer of the bank, a position he held for 20 years before resigning his position in July 2010. But four years later and given his track record of service, he was appointed the chairman of the bank. It is on record that under his leadership, Zenith Bank grew in leaps and bounds thus first becoming a Public Limited Company, Plc in 2001 before it got listed on the Nigeria Stock Exchange (NSE) as well as the London Stock Exchange (LSE).

Significantly, on April 27, 2007, Zenith Bank Plc became the first Nigerian bank in 25 years to be licensed by the UK Financial Services Authority (FSA), giving birth to Zenith Bank UK Limited and also with subsidiaries in Ghana, Sierra Leone, Gambia, South Africa and China. Truly and like the biblical mustard seed, the bank which was established with a capital of just N20m some 29 years ago with currently over 500 branches nationwide and thousands of employees announced recently that its total assets stood at N5.97 trillion as at end of September this year.

Perhaps Ovia’s humility and disciplined background has made him to distance himself from public space and one who doesn’t like blowing his own trumpet. For instance he sees the flourishing story of Zenith Bank as not due to his financial wizardry but borne out of vision and a passion to make it a reality. ‘’You can build an app or a company or a product or service, I happened to build a bank’’, he noted while speaking on his business secrets. The foremost banker also has interests in real estate; Information Communication Technology, ICT; founded Cyberspace Network Limited one of the pioneers of internet services in the country as well as Visafone Communications Limited, a Nigerian wireless network provider, a company that has been acquired by MTN.

As an author, Ovia in September 2018 published his first book, an autobiography ‘Africa Rise and Shine’ containing his business success secrets and how he was able to create one of Africa’s largest banks. Recognizing the fundamental role that sound education played in his life success and the need to offer a helping hand to the less privileged members of society, he established Jim Ovia Foundation, a non-profit organization with the aim of investing in the African youth’s ‘unlimited and untapped potential as the key to socio-economic growth’ convinced that such gesture will not only enhance the standard of living of the society but improve the nation’s economy.

Described as the ‘Godfather of Banking’ by Forbes Africa, the philanthropist has similarly invested a fortune on humanitarian work through the Jim Ovia Foundation comprising of four arms: The James Hope College, Jim Ovia Scholarship, Jim Ovia ICT Entrepreneurs Programme and Empower Youth Programme with over 1,500 students said to have benefitted from university scholarships since October 2010, and empowered over 3,500 students and entrepreneurs since its inception. A man of many parts and one who has bagged numerous laurels, Ovia is a recipient of the national honour of Commander of Order of the Federal Republic, OFR.

As a true patriot and in deference to public opinion, Ovia recently withdrew from the World Economic Forum (WEF) that held in South Africa even though he was already at the event, following the uproar that trailed the xenophobic attacks on some Nigerians and other black foreign nationals by rampaging youths. As one analyst noted, Nigeria will attain greater heights in no distant future if most of her prosperous citizens emulate Ovia’s philanthropy especially his passion for developing the human capital through scholarships to youths from less privilege background.

* Imonikhe, former editor Daily Champion, writes from Lagos

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Folake Ani-Mumuney Hits Another Feat, Clinches Lifetime Award In Ghana

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Folake Ani-Mumuney, Chairperson, FBNInsurance Brokers; Group Head, Marketing & Corporate Communications, First Bank of Nigeria Limited and Vice President, World Federation of Advertisers yesterday in faraway Ghana, clinched the Lifetime Achievement awards.

The Marketing World Awards (MWA) recognizes outstanding performances by individuals and corporate bodies across the marketing communications industry in Africa that have delivered superior product values to the market and exhibited excellence in upholding concrete marketing strategies, display uniqueness and among offerings, convey clear message to its consumers and stand out from the competition will be rewarded and celebrated.

Folake is widely admired for her wit and intelligence which she brings to bear in her well over 25 years career in the world of marketing communications across various industries, having worked in different geographies globally.

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IWEC Foundation Appoints FirstBank’s Ibukun Awosika As New President Of It’s Board Of Directors

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November 8, 2019.  New York, NY.

The International Women’s Entrepreneurial Challenge Foundation (IWEC)  has announced the appointment of Ibukun Awosika to their Board of Directors as its New President. Awosika is the Chairman of First Bank of Nigeria Limited, Nigeria’s Premier and Leading financial services provider.

Mrs. Awosika was elected to replace Miguel Valls, former president of the Barcelona Chamber of Commerce and president of the IWEC Foundation, who passed away last month. “The Foundation is very excited to announce the appointment of our new president,” stated Ruth A. Davis, IWEC Chairwoman and distinguished former U.S. Ambassador. “Ibukun Awosika has been a solid, steady presence at IWEC since its inception, and she is also a past IWEC awardee.  Ibukun has not missed one IWEC Conference since 2008 and has lent her voice and experience not only to our conferences, but to our meetings after joining our Board in 2017.  We are delighted that our Board of Directors voted on her appointment, and we’ll introduce her as our president at our upcoming 12th Annual IWEC Foundation Conference in New Delhi, on November 10th.”

The Foundation’s 2019 Conference will focus on “Connecting Women Businesses Globally: Leading the Way to Innovation and Integration”. The event would be hosted locally by the FICCI Ladies Organization (FLO) of the Federation of Indian Chambers of Commerce & Industry (FICCI), which represents over 5000 women entrepreneurs and professionals across India. This year, IWEC welcomes 39 awardees from 18 countries, with a combined revenue of over US$5.7 billion among all awardees to date.

IWEC Foundation Vice Chair, Carmen Castillo, CEO of SDI International, adds: “Ibukun has demonstrated a significant commitment to IWEC over the years.  Her breadth of knowledge extends from being an entrepreneur running ?SOKOA Chair Centre Limited, to overseeing the board of directors for the renowned First Bank of Nigeria Limited.  We are looking forward to her wise counsel and to continuously drive IWEC globally as a source of support, connection and impact for women business owners all over the world.”

Ibukun Awosika heads Nigeria’s premier bank, and she is also the founder and CEO of the Chair Centre Group, an association of large companies in the manufacturing, retail, and financial security services.  Mrs. Awosika further holds seats in the corporate boards of Cadbury Nigeria, Digital Jewel Limited and the Convention on Business Integrity, and she is a former chair of several other enterprise boards.   

Ibukun is a graduate of Chemistry from University of Ife (now Obafemi Awolowo University), Nigeria, an alumna of the Chief Executive Program of Lagos Business School, the Global Executive MBA of IESE Business School, Wharton’s Global CEO Program, and the IESE and China European International Business School (CEIBS). Ibukun is a multiple award-winning entrepreneur and the first Nigerian recipient of the prestigious International Women Entrepreneurial Challenge (IWEC) Award as a nominee of the US Department of State in 2008.  Ibukun is also a best-selling author and motivational speaker.

Ibukun was just honoured last month with the International Friendship Award presented at the IESE Business School by the Queen of Spain.

About the IWEC Foundation

IWEC is a New York-based international economic empowerment organization exclusively for women business owners, formed in 2007 with the assistance of the U.S. Department of State.  In addition to the State Department, its founders include the Barcelona Chamber of Commerce, Manhattan Chamber of Commerce (MCC), FICCI/FLO Chamber in New Delhi.  IWEC’s mission is to develop a global business network for successful women entrepreneurs, helping them gain and expand access to international markets by presenting a platform to exchange knowledge, experience and connections, and to promote dialogue among women entrepreneurs and business leaders throughout the world.

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