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Banks Stopped from Lending to Otedola, Dantata, 417 Others

21 Sep 2012

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Mr. Femi Otedola 


  •Cross River,  Kwara, Zamfara State Governments also affected
Obinna Chima
In a move aimed at strengthening financial stability and instilling discipline in the banking sector, the Central Bank of Nigeria (CBN) has barred banks in the country from extending further credit to 113 companies and 419 directors/shareholders, including those belonging to Mr. Femi Otedola, Alhaji Sayyu Dantata, Sir Johnson Arumemi-Ikhide, former Power Minister, Prof. Bart Nnaji, Mrs Elizabeth Ebi and Dr. Wale Babalakin.

The CBN arrived at this decision as a result of the reluctance by the debtors to pay back their loans despite the purchase of the debts at an agreed price by the Asset Management Corporation of Nigeria (AMCON).

In a new circular dated September 17, and obtained exclusively by THISDAY, the central bank stated that the restriction would apply to individuals, organisations, companies as well as principal shareholders and directors of companies where the outstanding value of loans purchased by AMCON amounted to N5 billion or above as at the day of purchase, without regard to the actual amount paid by AMCON.

The circular, which was signed by CBN’s Director, Banking Supervision, Mrs. A. O. Martins, stated that “it has become necessary to stop debtors who failed to repay their loans to banks and had these loans subsequently transferred to AMCON, from further enjoying credit facilities from Deposit Money Banks (DMBs) until they fully repay agreed outstandings to AMCON.”

The circular, which was accompanied by a detailed list of the blacklisted debtors, showed that worst hit by the directive are Zenon Petroleum, owned by Otedola, which was indebted to banks to the tune of N192.4 billion; MRS Holdings Limited, which belongs to Dantata  – N119.98 billion; Seawolf Limited – N98.32 billion; Arik Air Limited, belonging to Arumemi-Ikhide  – N85.481 billion; NITEL Plc/M-Tel  – N71.547 billion; and Capital Oil and Gas Limited, which belongs to Ifeanyi Ubah – N48.014 billion.

Others include Falcon Securities, whose Managing Director, Mr. Peter Ololo, was arraigned alongside several bank executives in 2009 by the Economic and Financial Crimes Commission (EFCC) – N162.9 billion; Rockson Engineering Limited, owned by Arumemi-Ikhide – N60.475 billion; BGL Securities – N6.44 billion; Rahamaniyya Oil & Gas Limited – N46.38 billion; Bi-Courtney Limited – N20.214 billion; and Geometrics Engineering, owned by Nnaji – N19.76 billion.

The restriction also applies to: Aero Contractors Company, owned by the family of Olorogun Michael Ibru - N32.579 billion; Tinapa Business Resort – N18.509 billion; Nestoil Limited, belonging to oil and gas entrepreneur, Ernest Azudialu – N13.506 billion; Dorman Long Engineering – N9.667 billion; Ascott Offshore Nig. Ltd, belonging to former banker, Henry Imasekha and the Berkley Group – N64.728 billion; Gitto Constuzioni – N11.838 billion; and Dansa Foods – N14.880 billion, whose directors, Sani and Abdul Dangote, are the brothers of business mogul, Alhaji Aliko Dangote.

Commercial banks were also directed not to grant further credit to Cross River and Zamfara States because of the failure of the Tinapa Business Resort and Accountant General, Ministry of Finance, Zamfara to pay back loans collected respectively.
The restriction, according to the central bank, came into effect from the date of the circular and shall remain “until full liquidation of agreed indebtedness to AMCON”.

For Zenon Petroleum whose initial debt of N192.423 billion was priced by AMCON at N140.999 billion, the memo showed that “negotiations are ongoing and with fairly clear roadmap”.  It also revealed that MRS Holdings’ debt of N119.986 billion, acquired by AMCON at a price of N91.620 billion has been “restructured and is performing”.

Similarly, while the remark on Seawolf’s debt of N98.328 billion that AMCON priced at N88.496 billion was put at “negotiations ongoing,” it showed also that Arik Air’s debt of N85.481 billion which was acquired by AMCON at N62.970 billion has been “restored but there is a moratorium”.

It also showed that while Capital Oil and Gas’ N48.014 billion has been “restructured and awaiting performance,” Rockson’s debt of N60.475 billion, which was acquired by AMCON at N36.331 billion, is still “pending”.

To ensure compliance, the CBN warned that any bank that flouts the guidelines would be made to make an immediate provision of 100 per cent of total principal and interest outstanding in the account of the customer and related parties, in addition to whatever regulatory penalties the CBN may decide to impose.

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  • Why is Jimoh Ibrahim'.s name not included?

    From: Aliu

    Posted: 1 year ago

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  • See how CBN and the banks collude to channel available funds to the rich in exclusion of the petty traders and SMEs who need just very little credit facilities to survive! Note that much of the funds in banks came from governments and the over 50MILLION small account holders. Still for the sake of national development, CBN must not scuttle the completion of the critical power sector reform.Some pragmatic solution must be found for funding the power sector projects in particular, especially for the indigenous company bidders.

    From: Victor T.C. Anyanwu, Snr. Economis.t

    Posted: 1 year ago

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  • I dey laugh! Central Bank of Nigeria (CBN) has barred banks indeed! What stops the banks and these people colluding to float another companies and continue to lend to them as usual.

    From: muri

    Posted: 1 year ago

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  • Sanusi is actually failing, if by now the Banks have not been able to fully recover the little left for debtors to settle after selling the debt to AMCON since, especially, as it affect the likes of Dangote, Otedola e.t.c. This man called Sanusi killed some banks intentionally. posterity will judge you one day.

    From: Oyewale, Oyegoke

    Posted: 1 year ago

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  • Na so this place bi but you no sure say Na Otedola, case cost the problem for other because no bi today the own this money....This Country get as e bi oh.. if you too show say u them go use one policy brake you dawn this why corruption no fit go here.

    From: ken

    Posted: 1 year ago

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  • 113 Companies and 419 Directors/Shareholders! They are trully 419 people who have duped Investors in the Capital Market, Depositors in the Money Market and have combined to bring our Financial Market into shambles. Funny enough, they are friends of Government and Government Officials, donating large sums of monies for political campaigns. Black listing them is not enough, their assets should be confiscated and they should be tried and sentenced according to the Law of Nigeria. Failure to do this will bring the day of reckoning closer than imagine. The levity with which these people are being treated is absolutely disgusting and annoying.

    From: Victor Olowogorioye

    Posted: 1 year ago

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  • Sanusi is actually failing, if by now the Banks have not been able to fully recover the little left for debtors to settle after selling the debt to AMCON since, especially, as it affect the likes of Dangote, Otedola e.t.c. This man called Sanusi killed some banks intentionally. posterity will judge you one day.

    From: Oyewale, Oyegoke

    Posted: 1 year ago

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  • They fooled us then. They are still fooling some people. But all the people can't be fooled all the time. We now know how you sold fake shares to us...with no returns. All our leaders involved would not go unpurnished.

    From: Oyewale, Oyegoke

    Posted: 1 year ago

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  • The more you owe the better respect you command from the bank and the government. These listed person have national honor and award affixed to their names. They work free in the corridor of power they are friends and sponsors of the people in government. This whole exercise is just a mockery of Nigerians and insult to our collective intelligence. If government is serious they should put them on trial just like any other debtors with a view to confiscate their ill-gotten assets to help recover the borrowed funds.

    From: Oluwafemi

    Posted: 1 year ago

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  • Please can we get the detailed list of the 113 companies and their directors?

    From: Ujay

    Posted: 1 year ago

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  • kindly permit me say this, i think about one or two years a go, the RISK analyst went to the business resort city, and one of his comment was that Cross river state govt. is not owing any bank in connection with Tinapa how come Cross river state govt. is now owning, please let those bank check their record again or let big boss quit that coveted seat for giving false information to the people of cross river state and Nigeria @ large. As an expert you guide and people to the light, you don't suppose to miss lead them because of your stomach and selfish interest. God bless my country NIGERIA and make it great again.

    From: Ola-Ola

    Posted: 1 year ago

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  • I agree with you sir, Mr Victor Olowogorioye.

    From: Bobby

    Posted: 1 year ago

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  • Honor role that is our leader. Is good we are been enlighten, if not i will rather say we don't need this information what will be the out come will you be there when they will collect the next loan?. In the past you hear of national AWARD once in a blue moon now is every three month as if they just finished semester examination and they are ready for their result, looting continue, may God deliver us from this govt that is using hard earned tax payer money to award pen rubber

    From: Ola-Ola

    Posted: 1 year ago

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  • I actually think this is the beginning of good things in Nigeria. If we these guys who have shown financial recklessness can be stopped from borrowing from banks, it will reduce the financial recklessness in the polity. This is the ideal thing in developed economies.

    From: PETER

    Posted: 1 year ago

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  • Dangote (dansa foods) that one no be true oo.. It is dansa energies that need to pay the marginal which is not a big deal because every company has that.. So I do not understand why Dansa FOODS is there..

    From: unknown

    Posted: 1 year ago

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  • Banks should check their records properly.. DANSA energies not foods owed marginal and now it is not owing any money. Few months ago they said it was only marginal and there is nothing to worry about because the government needs to even start over looking it so why is DANSA foods here? Banks should really check their records..

    From: anonymous

    Posted: 1 year ago

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  • it is a shame that most of these debtors are the so called movers n shakers of the Nigerian economy.In other words,they are the one destroying the economy of this country. and this is the reason the fall over themselves to sponsor any promising aspirant. This has nothing to do with a particular party they flock around all the political parties shame on them all

    From: festus omogui

    Posted: 1 year ago

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  • i really wonder why when government agencies/parastal and their officials position themselves to uproot the bad eggs in our economy we the people begin to cast aspersion at them!and the powerful among us begin to play and make dirty comments and statements we the people of this great nation Nigeria allow them continue to plunder the economy dry and give them a covering!!! can one really believe the staggering amount and sums of huge monies mentioned that is being stolen and owed!!!This Country and its people are indeed wonderful people...

    From: Kokoliko

    Posted: 1 year ago

    Flag as inappropriate

  • The world over, business borrow to strenghten their operations, increase profitability and create employment. Some of these businesses have done just that. But not being in-debt to the banks and not wanting to pay back or make a payment-plan is out rightly CRIMINAL. I was not disappointed when I saw the list as I have always questioned the business model of investors in Nigeria especially the ones in the oil/gas upstream

    From: OLU O

    Posted: 1 year ago

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  • This is very, very serious and disgusting. How can criminals strive more than clean and hard working people? As youths we went to school, graduated with degrees, and have gone to bank as an engineer or agriculturalist with good proposal to do business but I lacked collateral hence the bank refused me loan. I am now looking for govt jo which is not available the companies are not employing yet they go to banks and are given money without paying back. Please if now I take to arm robber or got to join boko haram or Niger Deltans to face Nigeria,can you blame me? my parents and our leaders do something to us before it is too late. We are trained engineers and we know how to use science and make dangerous weapon that kills, let us not derailed do something now.

    From: A. A. Yusuf

    Posted: 1 year ago

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  • In the business world, there is nothing abnormal with owing debt in as much as you can service it. The size of the debt is equally irrelevant once you meet the terms of the loan.

    It is either the Economy of the country is not thriving at all or the so called business men have only shown their greedy nature by deliberately defaulting on their loan terms.

    How do you explain oil companies not been able to service their debt!

    Also the central bank needs to look into interest rate as this is too high (18%) i wonder how much money those companies make that they can afford to service their loans at that rate.

    From: Ayo

    Posted: 1 year ago

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  • This is craziness at the highest level. How can banks be giving out huge loans without proper collateral security?. Our beloved country is gradually turning into a failed state where only the rich can get loans to develop their businesses and flamboyant lifestyles while the poor and the middle class languish in abject poverty. If an ordinary citizen owe any bank in Nigeria

    From: john

    Posted: 1 year ago

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  • This is scandalous!!!

    Please note that most of these companies and individuals are equally owing on fuel subsidy saga. What is the worth of the individuals and assets of their companies to warrant such level of indebtedness. What was this money used for because I don't see any asset in this country worth the amount of this bad debt?

    Nigerians have been completely defrauded by a gang of criminal bankers and their friends masquerading as business men or company executives. Soludo's CBN is most responsible and that man has been writing on how Nigeria can be better when he has already wrecked the financial sector out of ignorance or by collusion. Though Sanusi unearthed this fraud but steps taken so far that he is also confused on this matter. If AMCON acquired the debt over two years ago how come their still negotiation with the debtors on payment terms? Are their no collateral for the debts and how come companies owing more than their net worth are still allowed to continue operation and pile up more debt for Nigerian tax payees to bail out? Now that they have been barred from further loans the question remains that how will they fund their operations to now be in position to repay their debt?These individuals and companies are certainly not in the position to pay back. I think what AMCON should pursue is winding up the companies and disposal by sale of their assets. Anything that can be grabbed should be grabbed for the poor depositors and Nigerian tax payers! Company directors should be in jail and the colluding bankers including CBN staff must not go scot free!

    The banks that gave these people all this money must be prosecuted. CBN must immediately proceed

    From: COLE

    Posted: 1 year ago

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  • Rather coming too late; and what happened to the collateral of these loans? were the CBN surveilance/regulation depts, sleeping all this while? more measure of punishment for this colossal debtors, no wonder these so called business men and women have private jets and yatch at the expense of the poor depositors and Govt. I am disappointed in them; ethics and integrity thrown to the wind all the name of competing for a slot in the Nigeria billioneire`s list.

    From: Amien

    Posted: 1 year ago

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  • woe to the wicked. it will not be well with them all.i watched on AIT a couple of weeks ago about a young man sentenced to over 20years imprisonment cos he defrauded the public of an amount less than 2million naira.i do not encourage any activity that is against the public interest but,what is good for the goose should also be good for the gander. All this crooks are suppose to spend there remaining days in prison with what they have done to depositors money.Majority of them send their employees to jail for stealing 20000, now see what they are doing. Heaven will judge you all including the man on guard.

    From: kayode

    Posted: 1 year ago

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  • Jimoh Ibrahim is NICON

    From: sani

    Posted: 1 year ago

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  • I actually think being corrupt is d way forward in nigeria. If that is not d case, y would d same people we have given national honours to be found in places of dubious acts and fraudulent business? Young nigerians would grow up to believe that crime pays bcos it actually seem so. Finally, that man called sanusi thinks he is the only economist in this country that he can wake up one morning and decide to ride us, he will never go unpunished and one day will be revealed for all the evil he has done to our economy. Long live nigeria.

    From: lord Barry

    Posted: 1 year ago

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  • This is a welcome move by the CBN but albeit somehow late. Most of these customers are recalcitrant in their dealings. Many believed in financial recklessness and impunity. It is only unfortunate that many of them are unwilling to take the window of opportunity availed to them by AMCON. The Corporation has done so much by granting forbearance and generous concessions to willing debtors. In my dealings with AMCON, i can say for sure, that they are more interested in helping genuine businesses to survive by repositioning their outstanding indebtedness by way of debt restructuring.
    Abinito, some of these loans were badly structured with skewed collaterals. Many of these securities are very inadequate with Force Sales Value almost zero. Good cases are the margin loans whose values of pledged shares have been completely eroded. Whereas, other types of loans with tangible collaterals are embarrassingly lacking in documentations thus making realization almost impossible.
    Gazzetting these loans should in the immediate serve two purposes- stop the flow of good monies to bad customers but more importantly, checkmating the culture of impunity among the elites.
    On the flip side, the move without doubt, will significantly affect many going concerns sharing common promoters/ownership with the blacklisted companies. But in all, this country must move forward and we must find an acceptable ground to forge ahead.

    From: Dare

    Posted: 1 year ago

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  • Welldone SLS! One day history will remember and judge you faily for your role in confronting corruption in Nigeria.

    From: Biodun

    Posted: 1 year ago

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  • What's important is not d info you 're giving but your sincerity and ability to implement it

    From: Charles obodoechina

    Posted: 1 year ago

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  • By the time this matter drags on, the affected culprits will tell the nation how much of these money was donated for PDP to fund election campaign from 1999 to date. I am sure this is why they have the gut not to pay.

    From: Olu Ogunde

    Posted: 1 year ago

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