Published On: Tue, Aug 15th, 2017

The Rape of Skye Bank:

FELIX OLOYEDE|

Skye Bank has never been lucky, right from its inception in 2005, the financial institution has been serially plundered by its key management figures. Until recently, however, the bank had plodded along impressively keeping its nose as clean as whistle. But with a new and younger board that took over from the sagely Musiliu Smith, a former Inspector General of Police and Chairman of the Bank, things started to turn a dark corner. The ascent of Tunde Ayeni, a parvenu oil and gas magnate to Chairmanship of the bank ushered in an era of derring-do, dodgy financial gymnastics and kamikaze deposit plundering. In a recent letter to the Acting President the new Central Bank of Nigeria- appointed Board the bank has alleged that Ayeni was indebted to the bank by a staggering and largely unrecoverable N150 billion.
kye Bank has never been lucky, right from its inception in 2005, the financial institution has been serially plundered by its key management figures. Until recently, however, the bank had plodded along impressively keeping its nose as clean as whistle. But with a new and younger board that took over from the sagely Musiliu Smith, a former Inspector General of Police and Chairman of the Bank, things started to turn a dark corner. The ascent of Tunde Ayeni, a parvenu oil and gas magnate to Chairmanship of the bank ushered in an era of derring-do, dodgy financial gymnastics and kamikaze deposit plundering. In a recent letter to the Acting President the new Central Bank of Nigeria- appointed Board the bank has alleged that Ayeni was indebted to the bank by a staggering and largely unrecoverable N150 billion. If any Nigerian bank in contemporary times had ever been thoroughly ravaged and assaulted by its board Skye takes the lead.
The tortuous but darkly epic story of Skye Bank is closely, and inextricably linked to that of its erstwhile Chairman, Akintunde Ayeni, a bolshie business figure who eventually became the bank’s nemesis, after playing romantic mascot for a brief period .Skye Bank Plc was the product of a shotgun merger of five relatively shaky banks that had relationships with the then governor of Lagos State Bola Ahmed Tinubu. Two of the larger banks in the 2005 merger where EIB bank owned by the Lagos State government and Prudent bank run by Sola Akinfemiwa , a close Tinubu financial confidante. The Central Bank of Nigeria-inspired banking sector consolidation of the time afforded Tinubu and his banking-sector associates consolidate their interests in a bigger, and what they hoped to be a more stable institution.
The consolidated banks were Prudent Bank Plc, EIB International Plc, Bond Bank Limited, Reliance Bank Limited and Co-operative Bank Plc. Ironically, Ayeni was instrumental to the more recent evolution of the bank, as he was said to have used various bank loans to buy Mainstreet Bank for N135 billion from the Asset Management company of Nigeria (AMCON)and merged it with Skye bank to form a bigger franchise.
Ayeni, a constant, but highly influential presence in former President Goodluck Jonathan’s government, had spiritedly leveraged on his closeness to Jonathan, the later former governor of Bayelsa State Deprieye Alamaesiagha and Diezane Alison-Madueke, former petroleum minister to make significant economic gains for himself through ruthless takeovers and deals, either as a proxy for the alleged triumvirate or as the main deal maker.
For instance, he allegedly purchased Nitel/Mtel at $252 million, a cost well below the actual value of the moribund parastatal. According to reports, he owns the consortium that bought over Ibadan Electricity Distribution Company as well as the Yola Distribution Company, at also prices well below their intrinsic valuation.
In 2012, he became the chairman of Skye Bank and significantly leveraged on his position on the board to pillage the bank to fund a bohemian lifestyle, often using the bank’s funds to make oil sector investments with uncertain prospects; a situation which a source that preferred not to be mentioned in print confided had depleted the Bank’s general reserves by a whopping N48bn.
Little wonder his speculated N2 billion donation to the President Goodluck Jonathan reelection campaign caused so much anxiety among Skye Bank customers who, for fear of safety of their savings, went on panic withdrawals when the news broke.
Recently, the Management of Skye Bank Plc has reportedly written to Acting President Yemi Osinbajo, detailing how Tunde Ayeni, Chairman of the bank between 2010 and 2016, wrecked havoc on the institution.
In a deluge of letters and documents, the Management listed details of how Ayeni allegedly used his office to perpetrate illegality and fraud that nearly brought the bank to its knees.The apex bank had watched the Skye Bank saga with bated breath, but after several warnings, the Central Bank of Nigeria (CBN) took over Skye Bank on July 4, 2016.Godwin Emefiele, governor of CBN, said at the time that the action followed the failure of the lender to meet the regulator’s minimum key liquidity and capital adequacy ratios.
Ayeni had resigned following the development, and CBN announced the appointment of Muhammad Ahmad as the new chairman, while Adetokunbo Abiru took over from Timothy Oguntayo as group managing director (GMD).
In a letter signed by Abiru and Ahmad, the bank presented in graphic details how Ayeni allegedly used loans from the bank to acquire major government companies. The letter was unsparing of the debauchery committed at the bank under Ayeni’s controversial chairmanship.
“Upon the assumption of duty by the new board, one of the immediate concerns that needed to be addressed was to ascertain the true state of the affairs and financial position of the bank and the credibility of the IT and information systems of the bank,” the letter read
“To this end, the following were undertaken: engagement of PWC does to half-year audit as of June 30, 2016. This was later extended to cover the full year to December 31, 2016.
“The engagement of KPMG to do a forensic audit of the bank’s IT platform and management information systems; and
“The forensic audit revealed that the bank operated two sets of financial books and this was responsible for the regulators/auditors inability to detect the massive losses and infractions, particularly the balance of N280bn in suspense accounts.
“The bank’s total exposure to Ayeni as of the date is about N70bn. It is clear that he used his position as the chairman of the bank to obtain inside loans well above the regulatory thresholds for the acquisition of the following government enterprises: Ibadan Electricity Distribution Company, Yola Ibadan Electricity Distribution Company and Nitel/Mtel. All the facilities are presently seriously challenged.
“As of today, Ayeni’s total industry indebtedness, covering both Nitel and the Electricity Distribution Companies (Discos) is estimated at about N150bn, and little, if any, of these obligations are being adequately serviced, it is doubtful that he will ever be in a position to service these loans satisfactorily.”
The expository letter also hinted at another N33billion traced to Ayeni, with strong suspicion that out of this amount, N7 billion was spent on the re-election campaign of former President Goodluck Jonathan.
“The sum of N7bn was disbursed without due process to various individuals and corporate organisations on the request of Godknows Igali, a former permanent secretary of the federal ministry of power,” it read.
“The monies appear to have been spent essentially on the Jonathan-Sambo electoral campaign in 2015. That sum remains outstanding as at today.
“There is ample evidence that he (Ayeni), among others, received large amounts of cash, totaling N29.5bn, from the bank, which appears to be connected to the purchase of Mainstreet Bank Limited, but which has not been accounted for.
In the face of this monumental rape, the Management has appealed to the government to assist it to seize Ayeni’s assets.
“The former chairman should be brought to account for his central role in many of the identified infractions,” it read.
“We have been able to perfect the debenture on the fixed and floating assets of Natcom, the vehicle that was used for the acquisition of Nitel and Mtel with asset estimated at N282bn (Open market value) and N183bn (forced sale value) by Knight Frank in 2014.
“This will put us in a position to place the company into receivership for recovery. However, in order to come to fruition, this approach will require strong and unyielding support from the regulatory and political authorities in the country.”
The management also indicted AkinsolaAkinfewa, KehindeDurosinmi-Etti and Oguntayo, all former GMDs of the bank.
Other individuals listed in the petition for various acts of infraction are Femi Otedola, chairman Forte Oil Plc, Festus Fadeyi and Jide Omokore.
Recall that agents of the Economic and Financial Crimes Commission (EFCC) had in the past arrested and detained Tunde Ayeni, Skye Bank’s erstwhile Chairman, over allegations that he bribed a former minister of the Federal Capital Territory (FCT), Bala Mohammed, to acquire 54 plots of land in Abuja, the Nigerian capital.Two EFCC sources informed Business Hallmark at the time that during the arrest he was initially reluctant to cooperate.
He had earlier been investigated for playing various roles in different business deals involving former First Lady Patience Jonathan and a former head of state, Abubakar Abdulsalam, who co-owns a telecommunications company with the former bank Chairman.
Already, the Management of Skye bank is reportedly seeking to take over some oil wells belonging to JideOmokore, a businessman involved in a number of corruption cases within and outside Nigeria.
The bank said Omokore is indebted to it to the tune of N110bn at an exchange rate of $1/N315.
The loans in question were said to have been obtained through three companies namely: Atlantic Energy Drilling Concepts (N56 billion), Cedar Oil and Gas Ltd (N22.4 billion) and Real Bank Ltd (N31 billion).
The new management of Skye bank has claimed that the repayment of two major obligations of the oil companies is tied to the controversial strategic alliance agreements (SAAs) with the Nigerian National Petroleum Corporation (NNPC).
Atlantic Energy was awarded SAAs by the Nigerian Petroleum Development Company (NPDC) Ltd, a subsidiary of NNPC, to develop and finance production from OMLs 26, 42, 30 and 34 – four oil blocks in all – in 2011.NPDC valued its stake in the oil wells at $1.8 billion then.
The Economic and Financial Crimes Commission (EFCC) has frozen the assets of Omokore over suspicion of money laundering and procurement fraud.
In the letter to the Acting President, Skye bank has appealed that the federal government grant it access to the assets that were funded with loans from the bank.
“We will require assistance for the extrication of the real estate assets that were fully funded with loans from the bank from the assets of Omokore presently under the forfeiture order from the court,” the letter read.
“This will enable us have access and rights over these assets and put the bank in a position to realise the assets that form the collateral for the loans granted to Real Bank limited.”
The bank also sought assistance to take control of the oil assets of Omokore.
“We will require some political intervention working with the NNPC to be able to bring this matter relating to Atlantic Energy to a quick resolution,” the letter read
Skye Bank is struggling to survive, but analysts doubt its capacity to stay afloat given deep depositor suspicion of its solvency, its high and rising interest expenses relative to interest income and its evidently narrowing net interest margin. Victor Ukpai, Research Analyst at Focus Bank, points out that a critical problem at Skye Bank was the apparent weakness of corporate governance, ‘ those that should have given oversight integrity and corporate direction were the wolves at the gate’, he notes. According to Ukpai, ‘the regulatory bodies need to be a lot more thorough and circumspect in approving board positions of banks, detailed security checks and other ancillary means of intelligence gathering should be conducted before the approval of board members, only recently two prospective members of the board of an anti corruption agency were found to be under investigation by that very same agency!’. Skye Bank may not topple over but the outlook appears bleak as the two Kogi state indigenes of Tunde Ayeni and Jide Omokore, have dealt severe blows to the banks underlying liquidity and its supporting business capital.

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