Get Latest Tori News Alert!
Enter your email below.

Delivered by FeedBurner





Hot Stories
Recent Stories

Oba Otudeko Speaks On Controversial Loans After Being Sacked As Chairman of FBN Holdings

Posted by Thandiubani on Mon 03rd May, 2021 - tori.ng

After being removed as the chairman of FBN Holdings by the Central Bank, Oba Otudeko has reacted.

Oba Otudeko
Oba Otudeko
 
Oba Otudeko has reacted after being removed by the Central Bank of Nigeria as Chairman of the FBN Holding over insider controversial loans.
 
Offering his response through Honeywell Group, Otudeko said loans obtained by his company from First Bank and other financial institutions are being serviced.
 
CBN Governor Godwin Emefiele in sacking the First Bank and holding company’s boards last week, had highlighted insider loans as a bane of the nation’s premier bank.
 
Emefiele said that before the 2016 intervention by the CBN, “the problems at the bank were attributed to bad credit decisions, significant and non-performing insider loans and poor corporate governance practices.”
 
The shareholders of the bank and FBN Holding Plc, he said, “also lacked the capacity to recapitalise the bank to minimum requirements.”
 
He said that despite CBN’s support for the bank from 2016 to 2020, “the insiders who took loans in the bank, with controlling influence on the board of directors, failed to adhere to the terms for the restructuring of their credit facilities which contributed to the poor financial state of the bank.”
 
Oba Otudeko’s Honeywell Group came for specific mention as CBN gave the Honeywell Group 48 hours to settle its debt, said to be about N100 billion.
 
Emefiele expressed shock that “after four years, the bank is yet to perfect its lien on the shares of Mr. Oba Otudeko in FBN Holdco which collaterised the restructured credit facilities for Honeywell Flour Mills contrary to the conditions precedent for the restructuring of the company’s credit facility.”
 
CBN also dismissed First Bank’s excuse for the delay “in resolving the long outstanding divestment from Bharti Airtel Nigeria Ltd in line with extant regulations of the CBN.”
 
Accordingly, the CBN ordered First Bank “to divest the equity investments in all non-permissible entities such as Honeywell Flour Mills and Bharti Airtel Nigeria Ltd within 90 days and forward evidence of compliance in accordance with the timelines above to the CBN.”
 
After several days of silence, Oba Otudeko’s Honeywell Group responded.
 
The company, in a statement released in Lagos, said like most companies, it utilises its own equity and borrows from banks and other financial institutions to carry out its operations. It added that it has a strong track record of mutually beneficial successes with its local and international financiers based on honouring obligations and delivering returns to all stakeholders.
 
The statement said since 1972, Honeywell Group and First Bank of Nigeria have had a professional business relationship that preceded its investment in the bank over a decade later.
 
It said the company’s relationship with First Bank has always been professional, at arm’s length and in accordance with all regulatory and industry practices and norms. The credit facilities accessed from First Bank and other banks were granted after due negotiations, with the necessary documentation and in line with regulatory policies and industry standards, the statement said.
 
It added that the Honeywell Group has serviced all its credit facilities in line with the terms agreed with First Bank and at no point has any of these facilities been non-performing.
 
The company said in 2015, First Bank under the directive of the Central Bank of Nigeria (CBN), drew its attention to a 2004 circular (BSD/9/2004) which required that insider related facilities must not exceed 10 percent of paid-up share capital.
 
It said based on this directive, the Honeywell Group subsequently entered negotiations with the bank to agree an appropriate repayment structure and the final negotiated position was duly approved by the CBN, adding that it is important to note that the facilities have been performing from inception and to-date.
 
The company said in accordance with agreed terms, its facilities with First Bank are adequately secured with collaterals in place at over 170 percent of Forced Sales Value and 230 percent at Open Market Value.
 
The statement said in addition to this, First Bank, on the directive of CBN, requested additional security in the form of FBN Holdings Plc shares held by the Chairman of Honeywell Group, Dr. Oba Otudeko citing a 2001 circular and this was duly provided through an authorisation to place a lien on the shares.
 
It said the Honeywell Group has continued to meet all its obligations on its facilities with First Bank according to agreed terms and has reduced its exposure by nearly 30 percent in 2.5 years. The facilities were charged at market rates and the lender continues to earn significant interest therefrom, the statement said.
 
The Honeywell Group said it has positively impacted the communities in which it operates over the last five decades of its existence.
 
Also, the company has been at the forefront of the development of key sectors in the Nigerian economy, including telecommunications, real estate and financial services through its investments and involvement in food manufacturing and processing companies and has contributed to feeding Nigerians for over 50 years with staples such as flour, noodles, pasta, dairy and fish.
 
The statement asserted that the Honeywell Group is a law-abiding, responsible corporate citizen, providing employment to thousands of Nigerians, supporting its communities, delivering value to its stakeholders and complying with regulatory requirements while remaining committed to delivering enduring value and improving lives.
 
The Honeywell Group is a Nigerian investment holding company deeply vested in critical sectors of the economy such as financial services, hospitality, energy, infrastructure and foods. It directly employs over 10,000 men and women while also supporting thousands more through its partnerships and community programmes.
 
With nearly 50 years of operations, the Honeywell Group has continued to positively impact communities and the lives of millions of Nigerians from connecting communities to the national power grid, to providing nourishment to over four million households annually and it is also a longstanding positive contributor to its communities and the overall growth and development of the country.
 


Top Stories
Popular Stories


Stories from this Category
Recent Stories