How Oba Otudeko Put First Bank In Trouble With CBN
First Bank plc has run into a big trouble with the Central Bank of Nigeria (CBN), information available to highstreet.ng has just revealed.
And the crisis ravaging Nigeria’s premier bank is courtesy financial dealings of billionaire businessman Obafoluke Otudeko who incidentally chairs the board of First Bank Holding Company (FBN Holdco).
Also, First Bank is in the bad book of the industry regulator for not notifying it before announcing Mr. Gbenga Shobo as the new GMD/CEO of the bank.
In a letter signed by Haruna Mustafa its Director of Banking Supervision and titled Re: Audited IFRS Accounts For The Financial Year Ended December 31, 2020 CBN expressly frown at FBN for not complying with regulatory directives to divest its interest in Honey Well Flour Mills despite several reminders.
The letter dated April 26, 2021 reads…
Your letter dated March 30, 2021 on the above subject refers.
We are concerned that the bank has not complied with regulatory directives to divest its interest in Honey Well Flour Mills despite several reminders.
We further noted that after 4 years the bank is yet to perfect its lien on the shares of Mr. Oba Otudeko in FBN Holdco which collaterized the restructured credit facilities for Honey Well Flour Mills contrary to the conditions precedent for the restructuring of the company’s credit facility.
Given the bank’s failure to perfect the pledge and satisfy condition for regulatory approval. the restructuring has thus been invalidated and the credit facilities now payable immediately.
Consequently, the company is required to fully repay its obligations to the bank within 48 hours failing which the CBN will take appropriate regulatory measures against the insider borrower and the bank.
Furthermore, the Bank notes the untenable delay in resolving the long outstanding divestment from Bharti Airtel Nigeria Ltd in line with extant regulations of the CBN.
Accordingly, you are required to divest the equity investments in all non-permissible entities such as Honey Well Flour Mills and Bharti Airtel Nigeria Ltd within 90 days.
Please you are to forward evidence of compliance in accordance with the timelines above to the Director of Banking Supervision.
