Controversy trails sale of Polaris Bank

Adebayo Obajemu

Controversy has continued to trail the sale of the  Polaris Bank. Many analysts and commentators have raised question on the propriety of selling the bank for N50 billion after government had spent trillions on it.

Only last week, the National Union of Banks, Insurance and Financial Institutions’ Employees, NUBIFIE, criticized the controversial sale of  bank , chiding the authorities for not involving stakeholders, including organized labour.

It stated that it was worried that a bank that the government expended  over a trillion on recapitalizing  could be sold for N50 billion secretly, saying “an emergency National Executive Council, NEC, meeting of the union would be convened  to deliberate on this specific issue and the decision on the next line of action would definitely be taken.

“In a statement by its General Secretary, Sheikh Mohammed, NUBIFIE said:  “As a union, we recognize that a bridge bank cannot continue to be held in trust perpetually and it is within the right of the relevant authorities to take necessary measures to get suitable investor(s) among those who have indicated genuine interest in acquiring it.

“The union has been inundated with various shades of complaints from stakeholders on the integrity of the process leading to the sale/acquisition of Polaris Bank Nigeria Limited, and the public are expecting answers from us, as a union, whose primary duty is safeguarding and defending the interests of the workers and the regular, ordinary day-to- day depositors.

“It is already public knowledge that the government, through its regulatory institutions, has sunk (or invested?) over a trillion naira of public funds on Polaris Bank in its turnaround efforts, and given the huge amount of public funds involved, the process of the transactions must not only be seen to be transparent and open, but the public has the right to know details of such transactions.

“Any claims of adherence to due process, which excludes workers and their representative, as well as the general public, fades away in the face of reason and cannot be seen to be transparent.

”The union and its members are concerned over the shrouding of entire transactions in secrecy, hiding under the guise of complying with Section 34(5) of the AMCON Act. This is a sure recipe for disaster and would ultimately be a cross on ordinary depositors and the neck of workers.“

“Casting the process of sale/acquisition of Polaris Bank in secrecy created credibility challenge, limiting fair competition, and made much worse by the fact that appropriate agency (AMCON), established to carry out the transactions, allegedly was a mere rubber stamp in the entire process.

“This development as it is in its currency now, would be made part of the agenda for discussion at the forthcoming National Executive Council, NEC, meeting of our great union, coming up soon.“

The sale of the Bank to a new core investor, Strategic Capital Investment Limited (SCIL) by the Central Bank of Nigeria(CBN) has led to speculation that the buyer may be fronting for some interest.

Ordinary, request for expression of interest was supposed to be made for intending investors to apply, then there would be a process of pre-qualification of the applications based on stated parameters, such as financial and technical capacity, and experience, before bids are invited from those already pre-qualified to determine actual winner.

However, none of this was done in the case of Polaris bank. There was no competitive bid and pre-qualification only for a winner to be announced.

This is  because serious  concerns have been raised about the obscurity and  not clear antecedents of the new owner, Auwal Lawal,  who is said to be  the in-law to the former Nigerian military ruler, General Ibrahim Badamosi Babangida (rtd).

The new owner, Auwal Lawal, is married to Halima, the second daughter and last child of the former Nigerian military head of state.

Though relatively unknown, Lawal is said to be an astute businessman, entrepreneur and a philanthropist, who holds the traditional chieftain title of “Sarkin Sudan of Gombe.’

He is also the Chairman and CEO of Nice Corporate Services Limited registered with the Corporate Affairs Commission(CAC), Nigeria since 2004, a  company that deals in real estate development, commodities trading, and supply of agricultural machinery and fertilizer.

In the same vein, the new owner announced a new board  that is expected to take the bank to a new height, grow its shareholders’ base and improve the its profitability.

The new board will be led by the existing chairman, M.K Ahmad, who will be joined will be joined on the board by six non-executive directors and three executive directors. They are to bring extensive experience in the banking and wider financial services sector in Nigeria and internationally, as well as expertise in corporate governance, human resource management, law and regulation to manage the operation of the bank.

Dr. Olufemi Omoyele, director of Entrepreneurship at Redeemers University noted that the circumstance of the sale was not so tidy, he nevertheless stressed that, “it’s better to sell the bank rather than allow the bank to go under, which could distabilise the banking system. So, its a right step in the right order.

He urged  stakeholders to give the new management so chance  to reposition the bank, saying he has faith in   M.K Ahmed-led leadership to reposition the bank.