CBN, Honeywell differ on loan process from First Bank
relationship which preceded the Group’s investment in First Bank over a decade later.
“The credit facilities which we have accessed from First Bank and indeed other banks, were granted after due negotiations, with the necessary documentation and in line with regulatory policies and industry standards.”
Recall that First Bank Holding Chairman, Mr Otudeko, and the Chairman of First Bank Limited, Mrs Ibukun Awosika and the board of the entities were replaced by CBN on Thursday after they removed the MD of First Bank, Mr Sola Adeduntan last Wednesday.
CBN had restated the MD with First Bank confirming in a statement on Friday that Mr Adeduntan had resumed work after his reinstatement.
In 2013, a N5.5 billion loan facility was reportedly granted to Oba Otudeko’s Honeywell Group by Ecobank.
The loan facility has since become a subject of litigation as the case is still pending at the Supreme Court.
According to reports, Otudeko’s Airtel shares were said to have been used as collateral for Honeywell’s Ecobank loan. In an alleged breach of corporate governance, Otudeko again used the same Airtel shares as well as some Honeywell assets he secured Ecobank’s loan with, to also get credit facility from First Bank.
Experts lend voices
The loan issue between First Bank and Honeywell Group has drawn comments from experts in the financial and economic sector. An economist and a former presidential candidate of the Abundant Nigeria Renewal Party (ANRP), ‘Tope Fasua said a study of First Bank’s books reveal that the bank may have provisioned over N1 trillion in the last six years for bad loans! With these kinds of numbers, no director of the bank has any moral ground to hold forth.
The Chief Executive Officer/MD of Cowry Assets Management, Johnson Chukwu, said CBN ought to have taken action since.
“Even if this infringement were not the issues, the issues brought up earlier such as liquidity issues, solvency issues, capital adequacy issues and high non-performing loans were enough bases for the central bank to wield the big stick.”