Banks Stopped From Lending To Otedola, Dantata, 417 Others

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.


http://www.thisdaylive.com/articles/banks-stopped-from-lending-to-otedola-dantata-417-others/125575/

God punish the banks. When u go to them for just a little over draft them go hala mountain upon mountain reasons why it should be personal loan and at the end of the day dribble you up and down till you get frustrated. They would rather go begging the big men for them to advance billions of loans to .....I say GOD PUNISH DEM FADA x1000000000000000

imagine all these people we celebrate as Billionaires. All their wealth are nigerian's money.
God help us.

ben4ever: imagine all these people we celebrate as Billionaires. All their wealth are nigerian's money.
God help us.

^^^It's either loans from banks, or blatant stolen wealth through their connections in gov't or through funds they've laundered for their friends in gov't. Like i've said before, there's hardly any billionaire in Nigeria deserving of respect. Nigeria is just their plaything....their 'spoils of war' if you like.

Good one cbn.
better to chase big men debtors than pushing N5000 down the throat of the masses.

Gbese Gbillionaires!
Mu he he he he he

Lets watch and see how they would survive without bank loans. All these one man biz that dont think about their companies growth or future but how to divert funds and live large. Soon the companies will start folding.

This is why the country needs a credit bureau through which you can ascertain a company or individual debt profile before you decide whether to advance such entity more loan or not.

can you imagine the billions, nawoooo for naija, how can things work here

How come PDP is not listed here? Wey dem dey thief all dem money from?

GOD 'll help the common man.
In fact, hmm... am just speechless... well...

ben4ever: imagine all these people we celebrate as Billionaires. All their wealth are nigerian's money.
God help us.

You're just finding out? The fastest way to be a billionaire in Nigeria is to take billions of Naira in loans from banks. Maintain friends in government and never repay the loans.

A formula several people have replicated. We need to checkmate these guys.

lozanni:

This is why the country needs a credit bureau through which you can ascertain a company or individual debt profile before you decide whether to advance such entity more loan or not.

We have credit bureaus in Nigeria. Stop publicizing your ignorance

Let us see how else they will sponsor their children's weddings.....

BellaNaija take note, your exclusive wedding features about to go downhill.

The few that have access to Bank loans are called "billionaires" but we know that their wealth isn't real.

Next thing we know, Forbes will feature some of these buffoons on the front page. How can a company with little to no assets be owing this much money?

Indeed, something is wrong with Nigeria.

Why Otedola just spoiled our Yoruba record for Christ's sake. If not for him, you wouldnt have seen any Yoruba person there. Group of debtors.

Are dey no paying it back after collecting the loan?

lozanni:

This is why the country needs a credit bureau through which you can ascertain a company or individual debt profile before you decide whether to advance such entity more loan or not.

i'm sick of people commenting on things in the hope that their comment is 'liked', there are credit bureaus in nigeria

ben4ever: imagine all these people we celebrate as Billionaires. All their wealth are nigerian's money.
God help us.

All/Most business owe money. The only reason banks even exist is because these businesses/businessmen are there to borrow money so that they can pay interest. The only time this arrangement becomes a problem is if the business/company is unable to or stops servicing the loan. Even the biggest companies in the world owe billions. That's why these companies have assets that can be liquidated in case of a deliquiency.
A bank would rather borrow a company that is worth 10 billion, say 1 billion than to give an average guy that is worth 1million, 100,000 naira because they expect to earn more from the business. The only issue i have is when these companies default, and the banks collect bribe rather than liquidating assets.

"Gbese" is not a new phenomenom. If you ever dream of becoming "wealthy", you must borrow at some point, whether you like it or not.

If Zenon oil ,which Otedola directly own , owes N192.423 billion debts to the banks , it technically means that he does not has up to N100,000 as a personal money .

OK. If they see this one all the way I'll give it to GEJ and SLS. That said many I move hath started and died a natural death under GEJ. Remember the Subsidy probes, its entered the courts and now its suddenly outta the news circle. When I think of it sef, GEJ doesn't harm us like the media does when they divert attention from pertinent issues.

I am also sure these guys are not the only major borrowers from these banks but they are the major defaulters. AMCON should repo some serious assets to prove they mean business, after all it won't take a min for them to shout 'bailout' if they get tired of the grind.

And SLS believes that Nigeria problems would be solved by wasting 40 billion on 5000NGN note? I mean this is simply misplacing ones' priority! This govt can hardly boast of serious minded individuals running its affairs!

This na another scam from CBN trust me.

This are the exact people Nigerians are meant to be cursing anytime there's a major downsizing in the banking sector and other sectors of the economy instead of blaming sanusi for the misfortune.

Nigerians should get educated!!!

santa62: This na another scam from CBN trust me.

You are an illiterate so I don't expect youto understand.

Am not surprise.....next!

"Banks Stopped From Lending To Otedola, Dantata, 417 Others" Oh they're 419 in total?! iSee!

acidtalk: This are the exact people Nigerians are meant to be cursing anytime there's a major downsizing in the banking sector and other sectors of the economy instead of blaming sanusi for the misfortune.

Nigerians should get educated!!!

Indeed. How does one borrow to a company that has little to no asset? How can you give money only based on name and connections? With no assets, how do you expect the person to pay back? Doesn't make sense. Let them start selling their private planes and polo teams. #rubbish.

I saw crossriver state blacklisted as a debtor state that means civil servants in the state are in deep shit.this what abandonment of tinapa could cause

And these are the ppl forbes 'll list as the richest in Africa mstcheeeeew.

Good move coming from CBN aleast it will help curtail their movement.

This is a bad move cos more people will lose their jobs while the owners of the companies involved will not be affected.