Transcorp payment raises recovered debt figure to N135.6bn

The Economic and Financial Crimes Commission on Tuesday said it has recovered a total of N135.6 billion from the debtors of the five banks whose chief executives were removed by the CBN in August. This amount was as at the close of work on Friday.

Inclusive in the amount is the latest payment of N21.6billion made by the Transnational Corporation (Transcorp) to Union Bank, after reconciling their account with the bank. The commission’s spokesperson, Femi Babafemi told NEXT they arrived at that figure “after carefully cross checking the bank’s account.” Transcorp was one of the 205 debtors owing the five banks a total of N747billion.

Transcorp had borrowed N30.4 billion from Union Bank as part of the funds for the acquisition of 51 per cent stake in the Nigerian Telecommunications Limited (NITEL) in 2006. The amount had earlier been disputed and after consulting and clearing with the banks, they arrived at a total of N21.6billion.

The debt was part of the funds borrowed from a consortium of banks by Transcorp, including N6.6 billion owed Intercontinental Bank Plc. Thereafter, Transcorp floated an Initial Public Offer (IPO) and raised N22 billion but later offset part of the debt with N19 billion.

Last month, the EFCC invited the chairman of the board of Transcorp, Ndi Okereke-Onyiuke and her directors to the commission’s office in Lagos. The five directors at the meeting, including Nicholas Okoye, Anthony Ofili, N.Okoro, the Managing Director, Adegboyega Olulade and Mohammed Nasir, all pledged to pay the loans obtained by Transcorp as soon as possible.

Mrs Okereke-Onyiuke, who is also the director general of the Nigerian Stock Exchange (NSE), was queried by the Securities and Exchange Commission (SEC) on the propriety of Transcorp owing such a huge amount, giving her position as chairman of the company.

Transcorp has always maintained that the debt was a corporate loan taken for the acquisition of 51 per cent equity in NITEL and that government’s interference in its operations in NITEL and subsequent cancellation of the sale had affected its ability to pay back the loan. The Federal Government recently revoked the sale of NITEL to Transcorp and has called for expression of interest from new investors for the acquisition of the national carrier.

EFCC debt recovery

The debt recovery drive by the EFCC comes barely two months after the Central Bank of Nigeria (CBN) sacked the chief executives of five out of the 10 banks it recently audited.

The five CEOs were accused of poor corporate governance and weak risk management framework.

According to the central bank, the huge non-performing loans in the books of the banks had depleted their operating capital and affected their ability to remain in business. The CBN thereafter injected N420 billion into the five banks namely: Union Bank of Nigeria Plc, Afribank Plc, Intercontinental Bank Plc, Finbank Plc and Oceanic Bank International Plc. The list of beneficiaries of non-performing loans to the five banks were released to the EFCC for a follow up.

The second phase of the stress test was concluded on October 3 on 14 banks out of which five banks were found to be in dire condition. Equatorial Trust Bank Limited, Bank PHB Plc, Spring Bank Plc, Unity Bank Plc and Wema Bank Plc were found to be under-capitalised. The CBN injected an additional N200 billion into four out of the five banks, while sacking the CEOs of three of the banks with a directive to Unity Bank and Wema Bank to recapitalise before June 30 next year.

The CBN has said it will soon release the list of debtors of the last five banks to also be handled by the EFCC.