The Nation Newspaper

Tag: AMCON

  • ‘Nigeria will face huge scandal if AMCON sells Mainstreet Bank’

    ‘Nigeria will face huge scandal if AMCON sells Mainstreet Bank’

    Jean Missinhoun, Senior Partner, Intangis Holdings, an American financial and investment company was the majority shareholder in former Afribank before it became Mainstreet Bank following its nationalisation by the Assets Management Corporation of Nigeria (AMCON) in August 2011. AMCON is set to sell Mainstreet Bank in September, a move, Missinhoun has argued is counterproductive as other shareholders like Intangis were not carried along in the scheme of things. To protect its vested interests, Intangis last Wednesday filed a suit against AMCON at the Supreme Court of the State of New York, United States. Missinhoun spoke on the genesis of the dispute in an online interview with Ibrahim Apekhade Yusuf 

    Since you set up shop in 2001, could you quantify how much level of investment you have made in Africa thus far?
    Intangis Holdings is an American financial and investment company (with offices in New York and London) established in 2001 and specialised in Emerging Markets. In Africa, Intangis Holdings has been involved in long-term with high potential projects. It participates in the equity and debt securities, credit and derivatives market. Intangis Holdings’ strategic vision and perfect knowledge of the “new frontiers” gives it a unique insight into its investments in Africa. Intangis Holdings is one of the major players contributing to the development and deepening of African financial markets.
    Intangis intervened on several structured finance in Africa (private and public): participation in the development and integration of structured finance and securitisation market in the West African Monetary Union (WAMU) for the mobilisation of savings and access to long term resources.
    Intangis also works to promote integration and cooperation among some African stock markets and thus create liquidity.
    What was the total equity of your investment in former Afribank before and after it metamorphosed to Mainstreet Bank?
    Intangis had exclusive rights to Afribank and an option for majority equity participation interests.
    At the time Amcon invested in Afribank, the bank with a total assets of $3 billion was ranked 16th among West African banks according to the 2009 league table “The top 200 African banks” published by JeuneAfrique magazine. Afribank was also listed in the Dow Jones “Africa Titans 50” index.
    Mainstreet Bank is one of three bridge banks set up by AMCON to takeover some of the toxic debts of banks like Afribank. However, you claimed that AMCON used the vehicle (Mainstreet) to transfer all its assets at former Afribank in total disregard to the rule of law, thus jeopardising shareholders and creditors like Intangis. Could you shed more light on this?
    Created in 2010 to deal with non performing loans held by Nigerian banks directly affected by the 2008 international financial crisis, the Nigerian Bad Bank structure Asset Management Corporation of Nigeria (AMCON) has broadened its mandate to the detriment of transparency and governance requirements that are essential in a global business world.
    After taking participation interests in the share capital of Afribank in 2010, AMCON organised the liquidation of the banking group and subsequent transfer of all its assets to a new structure, MainstreetBank, which it wholly owns. This liquidation, concluded between 5th and 8th August 2011, harmed all Afribank’s shareholders and creditors, including Intangis Holdings.
    You reportedly took the matter to the International Court of Arbitration on 29th April 2011, for which a preliminary decision was given in your favour in September 2013, could you expatiate on your specific prayers and reliefs granted in the ICA’s initial judgement?
    Intangis Holdings referred the matter to the International Court of Arbitration, on 29 April 2011, which issued a preliminary decision in its favour in September 2013 and took the view that MainstreetBank was party to the contract between Intangis Holdings and Afribank. This means that MainstreetBank is party to the contract.
    You claimed that AMCON’s plan to divest its investments did not factor in the liabilities of over $1.4bn. Could you elucidate further on this?
    Since that decision, Amcon has taken steps to divest from MainstreetBank while omitting to make provision as required by the international accounting rules (IFRS) for certain liabilities of the bank, estimated by Intangis Holdings at $1.4 billion. Intangis Holdings calls for compliance with the international accounting rules (IFRS).
    You have hinted of plans to pursue litigation with AMCON. At the risk of preempting you, could you tell us how and when that will be and how much damages you hope to sue for?
    On 1st of July 2014, Intangis Holdings filed a complaint for damages for tortious interference with contract against AMCON in the Supreme Court of the State of New York (United States).
    If all else fails, what other options do you hope to explore? For instance, would you consider diplomatic approach, in this case, the intervention of your home country and Nigeria’s?
    If AMCON manages, with total disregard to the rules of law, to sell MainstreetBank after having organised such a transaction and without ensuring proper reporting of the bank’s books, we would be dealing with a huge scandal. The banking group would be jeopardised, its customers endangered and its historic shareholders and creditors would suffer irreversible damages. Intangis Holdings cannot believe that the Nigerian authorities would tolerate such actions in contradiction to the requirement for transparency and good governance.

    ‘Intangis claim to Mainstreet is misplaced’

    In a statement obtained by The Nation, AMCON, while giving an overview of what led to crisis of identity between both parties, stressed that Intangis’ claim to MainstreetBank is null and void. Excerpts :

    THe background to the issue is that Intangis Holdings Limited (Intangis) recently wrote to AMCON’s advisers on the ongoing divestment by AMCON of its equity in MainstreetBank Limited (Mainstreet), stating that AMCON is procuring a breach of Intangis’ rights under a Confidentiality and Non-Circumvention Agreement, CNCA, dated 2 November 2009 between Afribank Plc (“Afribank”) and Intangis.

    “Intangis is claiming in a current proceeding at the International Court of Arbitration that Afribank contravened the provisions of the CNCA as follows: Not to enter into discussions, or negotiations with any potential investor in relation to acquisition of a portfolio of non-performing loans of Afribank; and The acquisition of a minority stake in the share capital of Afribank.

    “Intangis is further claiming that the CNCA was breached on at least two occasions by Afribank. It is clear from the above that Intangis is pursuing a frivolous claim because;

    AMCON is not a party to any agreement with Intangis; and Mainstreet did not even exist at the time Intangis signed the CNCA with Afribank.

    “Mainstreet was established following a ‘special’ audit of the Nigerian Banking sector in which Afribank was found to be in a grave situation along with 9 other banks. Afribank’s Board and Management was then replaced by the Central Bank of Nigeria, CBN, with a view to, cleaning up the bank and repositioning it by September 2011.”

    However, when it became apparent that Afribank lacked the capacity and ability to recapitalize before the September 2011 deadline, CBN revoked Afribank’s license.

    Consequently, pursuant to Section 39 of the NDIC Act, the Nigerian Deposit Insurance Corporation (NDIC) in consultation with CBN organised and incorporated three (3) “bridge banks” including Mainstreet. A Purchase and Assumption Agreement was executed by NDIC (as the statutory transferor of Afribank) and Mainstreet, who purchased assets and assumed certain liabilities of Afribank. AMCON subsequently subscribed for shares of Mainstreet in 2011.

    “Given that Intangis’ claim is anchored on the ongoing divestment of AMCON’s interest in Mainstreet, it is important to note the following:

    Neither Amcon nor Mainstreet are parties to the CNCA and neither party assumed Afribank’s obligations under the CNCA.

    “Further, the said CNCA expired on 2 November 2011 and as such there is no subsisting existing contract of which AMCON can be said to be breaching or inducing its breach. Even if the CNCA had not expired, the ongoing transaction relating to the divestment of AMCON’s shareholding in Mainstreet does not constitute a prohibited transaction under its expired terms.”

  • CBN stops AMCON debtors from taking loans

    CBN stops AMCON debtors from taking loans

    The Central Bank of Nigeria (CBN) yesterday banned debtors with delinquent facility taken over by the Asset Management Corporation of Nigeria (AMCON) from taking fresh loans.

    CBN Director, Banking Supervision, Mrs Tokunbo Martins, said in a letter to banks, Development Finance Institutions and AMCON, that any fresh loans to bad debtors must be approved by the apex bank.

    She said, the CBN has ordered that no institution, shall without its prior written approval, grant a facility to a potential borrower who is in default of any existing facility to the tune of N500 million and above in the case of deposit money banks; and N250 million in the case of development banks and banks in liquidation.

    She said the prohibition threshold may be reviewed by the CBN from time to time with the aim of inculcating responsible and appropriate credit culture in borrowers.

    The policy, which takes immediate effect, applies, in case of defaulting corporate obligors, to their directors and or related interests.

    The CBN director said that any institution that contravenes the directive shall be slammed with the existing regulatory sanctions that may apply.

    Martins said the regulator had also noted with concern, the impunity with which some borrowers default on their loans in some institutions and yet are availed further credit facilities by other institutions under the same, or sometimes different identity.

    She said such practice could have the effect of triggering serial defaults and a buildup of non-performing loans which could negatively impact liquidity in the financial sector and ultimately hamper its stability.

    She explained that henceforth,  all institutions shall ensure that all returns on credit facilities granted, together with their performance status are rendered on Credit Risk Management System (CRMS) and reported to two credit bureaux.

    Martins advised lenders to always perform credit checks on a potential borrower on CRMS and from at least two credit bureaux, as part of credit appraisal process.

     

     

    She explained that where an institution fails to report a facility and or its status on the CRMS or to at least two credit bureaux, as required, it shall be considered as concealment and misrepresentation of a material fact and the institution shall be penalised in accordance with the relevant provisions of the Banks and Other Financial Institutions Act (BOFIA). Also, the Chief Financial Officer, Chief Financial Officer, Chief Compliance Officer or their equivalents shall be liable to sanctions in line with the relevant provisions of the BOFIA.

     

  • American firm threatens to sue AMCON over Mainstreet Bank

    American firm threatens to sue AMCON over Mainstreet Bank

    •’We are not party to agreement’

    An American financial and investment company, Intangis Holdings, is threatening to sue the Asset Management Corporation of Nigeria (AMCON), over what it termed actions that are detrimental to global business practices.

    Intangris Holdings said it invested in the defunct Afribank, which gave birth to Mainstreet Bank Limited, one of the bridged banks. It accused  the bad debt manager, of inadvertently broadening  its mandate, in its words, “ to the detriment of transparency and governance requirements that are essential in a global business world.”

    In a release by African Media Agency, the firm said AMCON’s wholesome acquisition of Afribank, was harmful and detrimental to shareholders including Intangis Holdings.

    It said:  “After taking participation interests in the share capital of Afribank in 2010, AMCON organised the liquidation of the banking group and subsequently transferred all its assets to a new structure, Mainstreet Bank, which it wholly owns.

    “This liquidation concluded between 5th  and 8th August 2011 with total disregard to the rules of law, harmed all Afribank’s shareholders and creditors, including Intangis Holdings.”

    The firm explained that it referred the matter to the International Court of Arbitration, on the 29th of April, 2011,  “which issued a preliminary decision in its favour in September, 2013 and took the view that Mainstreet Bank was party to the contract between Intangis Holdings and Afribank.”

    However, the firm said since that decision, AMCON has taken steps to divest from Mainstreet Bank,  “while omitting to make provision as required by the international accounting rules (IFRS) for certain liabilities of the bank, estimated by Intangis Holdings at $1.4 billion.”

    Intangis Holdings, which did not indicate whether the $1.4billion is equivalent of its investment in Afribank, is insisting that AMCON complies with the international accounting rules enshrined in the International Financial Reporting Standards (IFRS), pointing out  that it reserves the right to commence legal proceedings to assert its rights.

    It said: “AMCON has broadened its mandate to the detriment of transparency and governance requirements that are essential in a global business world. Having referred the Mainstreet Bank (formerly Afribank) case to the International Court of Arbitration (ICC) in Paris, Intangis Holdings is contemplating legal action against AMCON.”

    The firm noted that AMCON has set a September 15th date for the sale of Mainstreet Bank, warning that, “if AMCON manages to sell Mainstreet Bank after having organised such a transaction and without ensuring proper reporting of the bank’s books, we would be dealing with a huge scandal. The banking group would be jeopardised, its customers endangered and its historic shareholders and creditors would suffer irreversible damages.”

    The Senior Partner of Intangis Holdings, Jean Missinhoun, said the  firm “cannot believe that the Nigerian authorities would  tolerate such actions in contradiction to the requirement for transparency and good governance.”

    Contacted on Intangis Holdings claims, AMCON, denied any wrong doing, saying its investment in Mainstreet Bank, has no linkage with Afribank.

    In a memo from Project DOS Advisers draft response to Intangis, AMCON explained that Intangis Holdings Limited recently wrote to AMCON’s advisers on the ongoing divestment by AMCON of its equity in Mainstreet Bank  Limited, stating that AMCON is procuring a breach of Intangis’ rights under  a Confidentiality and Non Circumvention Agreement  (CNCA)  dated 2 November, 2009  between Afribank Plc and Intangis.

    In its defence,  AMCON said it is not a party to any agreement with Intangis and that Mainstreet did not even exist at the time  Intangis signed the CNCA with Afribank. It added  that Mainstreet Bank was established following  a special’ audit of the banking sector in which Afribank was found to be “in a grave situation” along with nine other banks.

    It said Afribank’s Board and Management was then replaced by the Central Bank of Nigeria (CBN) with a view to cleaning up the bank and repositioning it. “However when it became apparent that Afribank lacked the capacity and ability to recapitalise before the  September 2011 deadline, CBN revoked  Afribank’s license. Consequently, pursuant to Section 39 of the NDIC Act, the  Nigerian Deposit Insurance Corporation (NDIC) in consultation with CBN organised and incorporated  three  “bridge banks” including Mainstreet. A Purchase and Assumption Agreement was executed  by NDIC  (as the statutory transferor of Afribank) and Mainstreet, who purchased assets and assumed certain liabilities of Afribank. AMCON subsequently subscribed for shares of Mainstreet in 2011.

  • N53.52b levy payment to AMCON irks shareholders

    N53.52b levy payment to AMCON irks shareholders

    Eight commercial banks contributed N53.52 billion to the Asset Management Corporation of Nigeria (AMCON) Banking Sector Resolution Cost Fund in 2013 financial year.

    A check by the News Agency of Nigeria (NAN) indicated that the banks were Zenith Bank Plc, Union Bank of Nigeria Plc, Skye Bank Plc, United Bank for Africa (UBA) Plc and First City Monument Bank.

    Others are FBN Holdings Plc, Sterling Bank Plc and Diamond Bank Plc.

    NAN reports that the Central Bank of Nigeria (CBN) and the banks in 2011 signed a Memorandum of Understanding (MoU) for the establishment of the fund.

    The idea of the sinking fund was to assist AMCON to meet its goals and also ensure that government will not bear the cost of financial crisis in future.

    Under the initial arrangement, the CBN contributed N50 billion, while commercial banks contributed an amount equivalent to 0.3 percent of their total assets each as at the date of their audited financial statements and annually for 10 years.

    The CBN in 2013 reviewed the contribution to upward to 0.5 per cent of the banks’ total assets and 33.3 per cent of off-balance sheet assets into the fund as against 0.3 per cent in 2012.

    A breakdown of the figures contained in the commercial banks’ 2013 annual reports obtained by NAN showed that FBN Holdings paid the highest levy of N13.85 billion during the review period.

    It was followed by Skye Bank with N10.35 billion, while UBA paid N9.67 billion.

    Also, Zenith Bank paid N4.81 billion, FCMB contributed N4.58 billion, UBN paid N4.43 billion, and Sterling Bank parted with N3.11 billion, while Diamond paid N2.72 billion.

    Speaking on the AMCON levy, Mr Boniface Okezie, President, Independent Shareholders of Nigeria, said the levy robbed shareholders of their investments.

    Okezie said that AMCON should be scrapped or be funded by the Federal Government.

    He said that shareholders should not be short-changed because of the AMCON levy to the detriment of dividends.

    According to him, some of the banks contributions were higher when compared with the dividends they paid the shareholders.

    He attributed the non-payment of dividends by some banks and the poor profile of some of the banks to the “fraudulent AMCON’s levy”.

    Mr Adebayo Adeleke, Secretary, Independent Shareholders Association of Nigeria, also described AMCON as a disincentive to the nation’s investment terrain and a major setback to the nation’s retail investors.

    Adeleke said that “AMCON collects 0.5 per cent of banks total assets every year, while banks and their shareholders are struggling to survive”.

    He said that profits declared by some of these banks were lower compared with levies paid to AMCON.

     

  • AMCON levy stops when N5.6tr debt is paid, says Chike-Obi

    AMCON levy stops when N5.6tr debt is paid, says Chike-Obi

    •N800b for repayment by August

    Collection of the 0.5 per cent Banking Sector Resolution Cost Fund (Sinking Fund) from banks’ total assets, will end when N5.6 trillion debt incurred in the resolution of banking crisis is fully settled, Managing Director, Asset Management Corporation of Nigeria (AMCON), Mustafa Chike-obi, has said.

    Chike-Obi who made this known yesterday at a media parley in Lagos, said the Corporation paid N1 trillion of the debt last year, with another N800 billion scheduled for payment by August.

    He explained that by the end of this year, the Central Bank of Nigeria (CBN), which holds N3.6 trillion of the AMCON bonds, would be the only creditor to AMCON.

    Chike-Obi said the Sinking Fund collection is expected to end before the expiration of AMCON’s 10-year operational mandate.

    He said the levy collection has not in any way impacted on banks’ profitability as claimed by some shareholder groups, explaining that the AMCON fee is one of the nicest things that happened to the banking sector.

    “I challenge any bank that was doing better before AMCON, to come up and tell me that it is making less profit because of AMCON’s levy,” he said.

    The sinking fund that was created by the AMCON Act of 2010, mandated banks to contribute 0.5 per cent of their total assets to it on yearly basis. The initial contribution was 0.3 per cent, but it was raised to 0.5 per cent in August last year.

    He said that although the levy is tasking on the banks,  they have to pay because it is based on the agreement establishing AMCON. He said tye earlier the bonds are repaid, the sooner it would take  AMCON to wind down.

    He said the ongoing amendment of the AMCON Act, that is now over 90 per cent completed, will incorporate payment of  the AMCON levy remittances.

    He said AMCON has brought stability to the financial services sector, adding that such a role should not be trivilised.

    He said the sale of Enterprise Bank Limited and Mainstreet Bank Limited will be concluded by September, adding that Keystone Bank’s sale will commence afterwards.

    “AMCON does not see the possibility of buying new non-performing loans till it winds up by 2022, as the banks are now stronger,” Chike-Obi said.

    AMCON was set up in 2010 to buy bad debts from banks and save the industry from collapse, as lenders reeled in bad loans brought about by stocks’ speculators and price fluctuations experienced by fuel importers.

    The agency spent N5.6 trillion in 2011 to acquire non-performing loans and took over three of the eight banks it rescued with about N620 billion.

  • AMCON objects to Ibru’s move to regain forfeited assets

    AMCON objects to Ibru’s move to regain forfeited assets

    The Asset Management Corporation of Nigeria (AMCON) has objected to a suit filed by convicted former Managing Director of the defunct Oceanic Bank Plc, Mrs. Cecilia Ibru, seeking to regain the properties she forfeited to the Federal Government on her conviction in October 2010.

    She was, upon a plea bargain arrangement, convicted by a Federal High Court in Lagos, which sentenced her to six months imprisonment. She was made to forfeit assets worth N191 billion comprising 94 choice properties across the world including the United States of America, Dubai and Nigeria to AMCON.

    Ibru, who sue for herself, the Ibru Group and three others, is by her suit seeking, among others, to stop the Attorney-General of the Federation and AMCON from further taking any steps towards implementing the terms of the plea bargain and settlement agreement leading to her conviction.

    She equally wants an order directing parties to return to status quo prior to November 12, 2013, when AMCON obtained an ex-parte order in respect  of the properties.

    Other plaintiffs are Sidochem Industries Ltd., Edgar Sido and Dr. Francis Sido.

    Ibru alleged that AMOCN “mischievously obtained an ex parte order from the court” on November 12, 2013, without disclosing material facts in the plea bargain agreement.

    Shortly after the case was filed in April, trial judge, Justice Ahmed Mohammed on April 29, 2014, granted an interim injunction restraining the two defendants (AGF and AMCON).The judge also ordered the defendants to appear in court to show cause why the order to maintain status quo should not be made.

    Yesterday, the AGF was not represented. But AMCON’s lawyer, Ademuyiwa Balogun urged the court to dismiss the suit for lack of jurisdiction.

    Balogun also opposed an application by Ibru’s counsel, Mr. Ade Okeanya-Inneh (SAN) seeking preservative order restraining the defendants pending the hearing of the suit.

    “We are opposed to that application for preservative order, the reason being that we are challenging your Lordship’s jurisdiction. With the greatest respect, your Lordship’s jurisdiction is only limited to the deciding whether or not the court has jurisdiction to entertain the suit,” Balogun argued.

    He said there was no urgency requiring the court to make any preservative order.

    “The cause of action arose in November 2013, the plaintiff only approached this court in March 2014, it is a clear admission that there is nothing urgent to protect,” he said.

    Justice Mohammed agreed with Balogun and said he would not make any preservative order when his jurisdiction to entertain the suit was being challenged. He adjourned to June 22 for the hearing of the notice of preliminary objection by AMCON.

  • AMCON receives 25 EoI for Mainstreet Bank

    AMCON receives 25 EoI for Mainstreet Bank

    The Asset Management Corporation of Nigeria (AMCON) has announced the successful completion of the submission of Expressions of Interest (EoI) phase of the divestment of its shareholding in Mainstreet Bank.

    In a statement signed by its Head, Corporate Communications, Strategy & Research, Kayode  Lambo, said sequel to the earlier comment made by the corporation that the time frame given was adequate for serious interested parties to submit all requested documents, a total of 25 EoIs were received.

    He said this spanned a diverse group of interest which included local and foreign banks, and local and foreign investment groups.

    ‘’It is worthy of note that the number of requests received for this advertisement exceeded expectations and the corporation is impressed with the profiles of the entities,’’ he said.

    He  stated that the bidding process has not yet begun, adding that all successful EoI applicants will be required to submit further information in order to enable the advisers perform due diligence on them.

  • Test run’ not verb!

    THE Guardian front and inside pages of May 12, 2014, preface this week’s edition with two headline howlers nurtured by juvenile sloppiness: “Stakeholders oppose AMCON’s deadline on (for) bank’s acquisition”

    “Govt test runs (sic) American building system in Kuje scheme” ‘Test run’ is a noun—not a phrasal verb! Just use ‘tests’, which is brief and concise. These Nigerian etymological creations vitiate contemporary English.

    Usage note: Customs (plural)—The Customs and Excise (British: now Her Majesty’s Revenue and Customs since 2005 when the department was merged with Inland Revenue). Also: US Customs Service just like Nigeria Customs Service which the incumbent Comptroller-General, Abdullahi Dikko Ande, has so revolutionized with a catalytic touch that you would think there had been no CG before him—the NCS now posts, unprecedentedly, N100bn revenue yearly! Britons apply plural verb (The Customs have seized….) while Americans use singular verb. The choice is yours! For me, to the extent that it is a government AGENCY, I will support Americans on this for once! What do you constructively think?

    DAILY Sun EDITORIAL of May 12, 2014, and other sections of the medium take over the baton from the erstwhile ‘flagship of Nigerian journalism’: “It is high time (also it is about time) all the contentious issues in SWF are (were) resolved now (sic) in the interest of the economy and the country.”

    “Attempt by the APC to elect officials has led to cracks in its rank (ranks)”

    “There are intractable crisis (crises) between….”

    “The demeanour of majority (a majority) of the contenders….”

    “The compendium is the first single national publication that will feature all the custodian (the entire custodians) of Nigeria’s cultures….” (Full-page advertisement by Daily Trust)

    Let us move from Daily Trust to THISDAY of May 12, 2014, which circulated all manner of blunders: “Stop by the nearest Access Bank branch for our Cross Border Transfer (cross-border transfer) service.” (Full-page advertisement)

    The next two faults are from THISDAY EDITORIAL of the above edition: “…the last thing the public needs (need) now is to rub salt in (into) their wounds.”

    “Population, urbanisation driver (drivers) of investment into (in) Africa”

    “This is a cost effective (cost-effective) way of banking.”

    “A hearty cheers” (Full-page congratulatory advertisement by the Chrome Group) Why not ‘Hearty cheers?

    “…on the occasion of his Birthday Anniversary (sic).” (Full-page advertisement by Mainland Oil & Gas Co. Ltd)  ‘Birthday’ and ‘anniversary’ cannot co-exist because the former implies the yearly anniversary (celebration/marking/commemoration) of an epochal event (birth/discovery/wedding/memorial et al) in the life of an individual or an organisation. This faux pas keeps recurring daily! Is it that we do not read or are we just raucously careless? We have ‘wedding anniversary’.

    “Although sports betting have (has) been around for a long time….”

    Finally from the Back Page of THISDAY under focus where a guest columnist offered readers just an executive takeaway: “Now that they have attained those standards, I hope they will not let it (them) drop again.”

    The PUNCH of May 12, 2014, joins the language-poverty club with the following inaccuracies: “I ran to the two of them and they would borrow (lend) the state money.”

    “Glo Borrow (Lend) Me Credit” (Full-page advertisement by glo Unlimited) What is this schoolboy mix-up of ‘borrow’ and ‘lend’?

    “Risk averse (Risk-averse) Nigerian banks lag behind peers—Report”

    For the first time, let us welcome THISDAY Style to this stylish column. Its May 4 and 11, 2014, editions lacked grammatical etiquette on three occasions: “…my experiences here has (have) been a big part of my music. From the onset (outset), my music has (had) always been about me being a Nigerian.”

    “Put your phone on silent (silence)”

    From THE NATION ON SUNDAY COMMENT Page Headline of May 11 comes the next boyish infraction: “Nigeria: Giant with a feet of clay” You mean nobody in the production team could detect this mistake? Get it right: ‘Nigeria: Giant with clay feet—not ‘a feet of clay’!

    “…Happy Birthday my sweetheart & congrats for (on/upon) being a Digital grandma.”

    “Travel expert…said Nigeria needs (needed) a national or flag carrier with….”

    The Guardian of April 25, 2014, nurtured some misunderstandings right from its front page: “The meeting, which started at about 12.10 p. m. at (in) the Council Chambers, was attended by….” No cloudiness about timing: exactitude is the word or clear guess game (at 12.10 p. m. or about 12.10 p. m.—if unsure). In formal writing, ‘at’ and ‘about’ cannot co-function when timing.

    “Taraba CAN blames acting gov over (for) killings, aide disagrees”

    “Since August, I have been remitting money into (to) my husband’s account….”

    “Chioma, you are not 50, you are 18 with 32 years (years’) experience”

    The Guardian Front Page of April 24 was conscienceless: “With this resolution, the committee said local councils will (would) no longer be a third tier….”

    “Ejigbo commissions (inaugurates) fire service station, other projects”

    The Guardian Editorial of April 24, 2014, fumbled scandalously with five kindergarten mistakes: “What is absolutely incorrect is the celebration of same (the same) figures as some achievement in the face of Nigerians’ gnawing poverty.”

    “…which shows that majority (a/the majority) of Nigerians still live below the poverty line….”

    “…offering a competitive edge over other economies in (on) the continent….”

    “…the turnover shows a reap-off (rip-off) of consumers and low quality service in return.”

    “The exercise is how to maximize those potentials (potential or potentialities).”

  • AMCON and Mainstreet Bank sale

    AMCON and Mainstreet Bank sale

    • Friday deadline raises pertinent questions of due diligence and fairplay

    Barring any change of mind, the deadline set by the Asset Management Corporation of Nigeria (AMCON) for prospective investors in Mainstreet Bank to turn in their Expression of Interest (EOI) expires tomorrow. Convinced that one week was sufficient for any serious investor to turn in their EOIs, the corporation had set the one-week limit for the exercise.

    However, this decision appears to have been largely, badly received by investors and other stakeholder groups who consider the time given for the exercise as being too short for any meaningful evaluation and due diligence to be done on the bank.  Asides, some were of the opinion that AMCON should actually tarry to allow the Central Bank of Nigeria (CBN)-governor designate, Godwin Emefiele, settle down before commencing the sale.  They also pointed to unresolved labour issues in other transactions and the need to address them before the conclusion of the sale.

    To start with, we share in their concerns that any rush by AMCON to sell the bank would negate the lofty ideals of fairness, openness and transparency which the corporation had advertised as its guiding principle. The investors certainly have a point when they insist that the process requires enormous work on their part. Of course, in the circumstance, their demand for extension of the time to do a thorough work of evaluation would not only seem fair but reasonable. Moreover, given that the CBN governor-designate is expected to take over by June 1, we do not see anything wrong with the call to tarry.

    Be that as it may, we cannot entirely discount the fears of the corporation, particularly the risk of rendering the exercise not only open-ended but an all-comers affair. AMCON boss, Mustafa Chike-Obi may not have been altogether too cynical when he noted that an earlier exercise on Enterprise Bank, produced in all, 26 so-called investors, a number of whom he described as “spare parts dealers”, particularly as he claimed that over 30 investors are being expected this time around – a number he considers apparently unwieldy to go into the bank to do due diligence.

    With due respect to the AMCON chief, there is clearly no guarantee that the short time-frame for the investors to turn in their EOIs would produce his expected class of serious investors. There are in fact real possibilities that investors regarded as “unserious” might actually be the ones that would show up in the event of an adverse timeline.  This is certainly not what AMCON wants.

    Having said that, we do not see how a short extension would hurt the process. Indeed, we see much to be gained by a thorough and deliberate process which seeks to balance the fears of a possible laissez-faire process with the requirement for a process that is inclusive. That is the only way to assuage the fears of the concerned stakeholders that there are no underhand dealings; it is the surest way to enhance the credibility of the process.

    How much time do the investors need for their due diligence? We believe that this could be worked out between AMCON and the investors. With proper engagement and good faith on all sides, we believe a mutually-agreeable time-frame can be worked out. Our understanding is that the investors need basic information on the bank to be able to make informed bid just as it is the responsibility of AMCON to assist the investors in all the way it can. Having come this far, we cannot afford anything of a botched process.

  • Ministry, BPE to revive steel rolling mills

    The Ministry of Mines and Steel Development on Monday said it was partnering with the Bureau for Public Enterprises (BPE) to revive the Delta Steel Company and other steel rolling mills.

    The Director, Steel and Non-Ferrous Metals Department in the ministry, Mr. Also Abdullahi, made this known in a chat with the News Agency of Nigeria (NAN) in Abuja.

     

    Abdullahi said it was necessary to revamp the companies, including the steel rolling mills in Jos and Osogbo, to boost steel production and create jobs.

    He said the ministry and BPE were discussing with owners of the mills to address issues delaying commencement of operations nine years after they acquired the companies.

    He disclosed that the Federal Government sold 80 per cent of its equity in Delta steel to Global Infrastructure Nigeria Limited, which initially pledged to bring in foreign investments.

    According to him, Global Infrastructure, an Indian company, instead, took a loan of over N30 billion from some Nigerian banks which it is unable to repay.

    The director said the banks had since “sold the loans to Assets Management Company of Nigeria (AMCON) and that enabled AMCON to take over Delta steel company.”

    He said the ministry, BPE and AMCON had been discussing with new investors who had indicated interest to acquire the company.

    On Jos Steel Rolling Mill, now Zuma Steel, Abdullahi said it was bought by a consortium of Nigerian and Ukrainian companies, but had been bogged down by disagreements and litigation.