For the past month the media have been buzzing with news of the saga ensuing between Dr. Otudeko and CBN over a #75 billion non-performing loan which he took from First Bank for Honeywell Flour Mills a subsidiary of his company, Honeywell Group. 

Several claims have been against Otudeko and his company for trying to dodge fulfilling his part in ensuring that the loan is serviced. 

Here are some of the things he allegedly did to evade his loan repayment.

He did not follow due process.

Otudeko served as a board member of FBN Holdings, a subsidiary of First Bank, before his recent sack. He acquired a loan facility around the sum of N75 billion for Honeywell Flour Mills as the insider borrower. An insider is an executive, director, or principal shareholder of a member bank and loans made to these individuals are known as insider lending. 

This isn’t illegal. The issue is that Dr. Otudeko, using his influence as Chairman of FBN Holdings Plc, tried to get special treatments and benefits that would not be awarded to regular bank customers. This goes against the regulations of insider borrowing/lending.

According to CBN, First Bank does not have a binding document filed with the CBN that will allow it legally claim the collateral if there’s a default on the loan. This is because they, allegedly, did not follow due process to ensure that the collateral for the loan facility is secured. Hence they may not be able to move in on the shares he used as collateral.

They also claim that the loan facility has been non-performing for over three years and FBN has refused to divest its interests in Honeywell Mills and Bharti Airtel (where Otudeko was once Chairman) despite several reminders from CBN.

CBN purports that this negligence is deliberate and is a result of Dr. Otudeko’s influence on other board members.

He used the same collateral for two different loans.

There is an ongoing war at the Supreme Court between Otudeko’s Honeywell Flour Mills and Ecobank over a N5.5 billion credit facility the former got from the latter. 

Reports have it that, the same Airtel shares Otudeko used as collateral for his loan from Ecobank are the same ones he used to get his credit facility from First Bank. First Bank has an equity position, hence now owns the assets which Otudeko pledged to Ecobank. Ecobank on the other hand have a debt position, so both banks are stuck and neither can move in on the shares. 

He tried to use his son to write-off his loan

It is purported that Otudeko installed his son as a non-executive director of First Bank where he used him to cover up his loan and evade regulations regarding servicing of the loan. The claims also say he tried to position his son as Managing Director and CEO of First Bank so he could use him to write-off the loan he got from FBN.

He removed anyone that stood against him

He and his partner in crime spearheaded the events that led to the removal of the Managing Director / CEO of First Bank, Dr. Adeshola Adeduntan. Adeduntan is said to be against the actions of board members like Otudeko, who abused their positions for personal benefits, and tried severally to stop insider lendind among board members. Insiders claim that he, Adedutun, is also the inside man of Governor Emefiele of CBN, an arch rival of Otudeko.

CBN has taken action against Otudeko, firing him along with all board members, with an ultimatum given to Honeywell Flour Mills to pay all debt in 48 hours.

No comments:

Post a Comment