The Central Bank of Nigeria (CBN) has sacked the Boards of Directors and management teams of Union, Keystone, and Polaris Banks.

The board and management dissolution is with immediate effect.

All the managing directors and executive directors of the three banks are affected with the dissolution.

Sources at the apex bank told The Star that the decision to sack the boards was taken at a meeting chaired by Governor Yemi Cardoso on Wednesday in Abuja.

The managements and boards of the affected three banks and the CBN Special Investigator were in attendance.

How Emefiele acquired Union Bank, Keystone Bank – CBN Investigator

The apex bank, in a statement issued by Mrs. Sidi Ali, Hakama, Ag. Director, Corporate Communications, “this action became necessary due to the non-compliance of these banks and their respective boards with the provisions of Section 12(c), (f), (g), (h) of Banks and Other Financial Institutions Act, 2020.”

According to the CBN, “The banks’ infractions vary from regulatory non-compliance, corporate governance failure, disregarding the conditions under which their licenses were granted, and involvement in activities that pose a threat to financial stability, among others.

“The CBN assures the public of the safety and security of depositors’ funds and remains resolute in fulfilling its mandate to uphold a safe, sound, and robust financial system in Nigeria. Our Banking system remains strong and resilient.”

The development was consequent upon the recommendation of the Special Investigator, Jim Obazee, appointed by President Bola Tinubu to probe CBN activities.

The report had indicted the immediate past governor of CBN, Godwin Emefiele, of using cronies to purchase some of the banks without evidence of payment.

Also, Obazee said the purchase of some of the banks didn’t follow due process.

Emefiele reportedly used proxies to acquire Union Bank of Nigeria for Titan Trust Bank (TTB) Limited, as well as Keystone Bank.

The report of Jim Obazee, the special investigator appointed by President Tinubu to probe the CBN, revealed that there was no evidence of payment for the banks by the new owners.

In some instances, Emefiele approved interest-free loans for cronies for the purchase of the banks, the report said.

In a December 20, 2023 memo to President Tinubu, titled, “Report of the Investigation of the Acquisition of Union Bank of Nigeria by Titan Trust Bank,” the special investigator recommended the reversal of the sales and recovery of Union Bank and Keystone banks for the Federal Government.

TTB, the new owners of Union Bank, is owned by Luxis International DMCC and Magna International DMCC, said to be based in Dubai, United Arab Emirates.

The two firms are reportedly owned by Vink Corporation Middle East FZC and controlled by Cornelis Vink.

In a memo to President Tinubu, the investigator stated that: “When carrying out our investigation, we discovered that some persons were used as proxies by Mr. Godwin Emefiele to set up Titan Trust Bank and acquire Union Bank, all from ill-gotten wealth. We were able to secure some documents, and investigation reports will lead to the forfeiture of the two banks by the federal government.

“We have completed our investigation on this acquisition and have also held meetings with relevant parties except for Mr Cornelius Vink (currently hospitalised in Switzerland). We are on the verge of recovering these two banks for the federal government.”

In another report titled, “Report of the Investigation of the Acquisition of Keystone Bank,” the special investigator stated that Keystone Bank was acquired for free.

The late Alhaji Ismaila Isa Funtua, an ally of former President Muhammadu Buhari, alongside Emefiele were fingered in the acquisition of Keystone Bank and another bank.

Based on preliminary report, the investigator stated that some persons were used as proxies with the connivance of Emefiele and the CBN to acquire the bank without evidence of payment.

It stated: “AMCON MD moved N20 billion to Heritage Bank as placement sometime in 2010. On the back of that, Heritage Bank granted a loan of N25 billion to the promoters of Isa Funtua/Emefiele group’s acquisition vehicles to buy Keystone Bank.

“The loan was further backed by the shareholders of the bank. Upon acquisition, Keystone Bank returned the N20 billion back to Heritage Bank as placement. Thereafter, Heritage Bank repaid AMCON from the cash flow created.

“When the loan granted by Heritage Bank to Isa Funtua/Emefiele’s acquisition vehicles matured with outstanding balance, the MD of Heritage Bank (which was then in serious liquidity crisis), called for repayment. Unfortunately for the shareholders of the bank, the Isa Funtua/Emefiele Group could not repay.

“Consequently, the MD of Heritage got his lawyers to write to the bank on two occasions, threatening to take over Keystone Bank based on the shares they had pledged as security.

“After much pressure from him, Keystone Bank created internal loans of about N50 billion between June and October 2019 and moved the proceeds to repay Heritage Bank on behalf of their group. However, the MD of the bank at that time had resigned due to consistent pressure from him and the shareholders to comply. The internal loans so created are not being serviced and have gone bad.

“The special investigator has commenced the interrogation of the MD of AMCON to clarify the situation of the acquisition of another bank and Keystone banks beside Arik Air, Aero Contractors and the financial reporting by AMCON.”

Obazee said a preliminary review of the case showed that “Keystone was acquired for free as did Polaris Bank and the special investigator should liaise with the CBN to recover these two banks to the Federal Government of Nigeria.”

The Star