obowunmi: If the company attempts to liquidate these assets who really has money to buy the excesses of these men and women??

If I am a billionaire living in South Africa, why do I want to buy a polo team with horses or a used private jet from a former millionaire from Nigeria?

Pls let's think before we type.

See how you reason like a goat? If you put such assets on the market, they will sell in a week or less, to ready and waiting buyers anywhere in the world!!! Unless you've no clue how to market, or think because you're from Nigeria, nobody will want your wares - an extremely stup.id and ignorant idea given that Nigerians, including ordinary Nigerians, conduct international business transactions worth billions of dollars every month!!!

Rossikkk - the menace is back. Seems FOOL is the only word in your d,icktionary.

dj187: i'm sick of people commenting on things in the hope that their comment is 'liked', there are credit bureaus in nigeria

On the yellow pages you mean.

A-town:


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.

Only if your theory worked.

ProGSM: CBN should take it easy. These guys employ and pay millions of Nigerians. If anything happens to them, Millions will go without food on their table.

Please take note.

Hmm. So they employ thousands on loans and hoaxes. My dear, run for ya life.

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.

It is in place and working well. Just that most banks still ignore the reports.

Rossikk:

See how you reason like a goat? If you put such assets on the market, they will sell in a week or less, to ready and waiting buyers anywhere in the world!!! Unless you've no clue how to market, or think because you're from Nigeria, nobody will want your wares - an extremely stup.id and ignorant idea given that Nigerians, including ordinary Nigerians, conduct international business transactions worth billions of dollars every month!!!

This shows how myopic your are in the recovery effort. Most people won't want to buy those properties because of problem. Some of these debtors go as far as threatening the prospective buyers. Banks have properties to sell but no buyer. Most of the collaterals are highly priced and for specific users only.

I'm yet to see a billionaire who became one without government connections.

Rossikk:

See how you reason like a goat? If you put such assets on the market, they will sell in a week or less, to ready and waiting buyers anywhere in the world!!! Unless you've no clue how to market, or think because you're from Nigeria, nobody will want your wares - an extremely stup.id and ignorant idea given that Nigerians, including ordinary Nigerians, conduct international business transactions worth billions of dollars every month!!!

[

If he reasons like a goat then you think like a baboon!which market are you talking about? do you think debt recovery is like taking wares to oyingbo market? How many people have money to buy Aircraft or tank farm?

AMCON should have involved in management of debtors businesses rather than cutting their lifelines and force them into extinction. Management of a country finace requires a lot of patience and technical approach, Nigeria's case looks too sensational!

I wonder wat d banks balance sheet would look like if dey don't lend dis companies money. Dis companies would continue to default becos of d high interest rate, infact some of dis companies are too big to fail. Nigeria economy is set up to favor d banks, and any single default on a loan at d high rates would automatically lead to d compounding of d loan. It would be good to look at d breakdown of d loan.

My dear cross river and tinnaper, na watin happen na?
Dangote nko? Im no de owe?

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

What's the share capital of zenon oil plz I guess most biznesses including mine are geared 90% on gbese

Rossikk:

See how you reason like a goat? If you put such assets on the market, they will sell in a week or less, to ready and waiting buyers anywhere in the world!!! Unless you've no clue how to market, or think because you're from Nigeria, nobody will want your wares - an extremely stup.id and ignorant idea given that Nigerians, including ordinary Nigerians, conduct international business transactions worth billions of dollars every month!!!

Nigerian's and their level of myopic-ness my brother say they should sale better still, market assets to international investor, who would buy, an asset in nigeria where government policies change over night, where what is right is put after what is wrong, even nigerian's themselves don't have sufficient funds to invest in these properties because they would still borrow from the same banks to pay

akintun: I wonder wat d banks balance sheet would look like if dey don't lend dis companies money. Dis companies would continue to default becos of d high interest rate, infact some of dis companies are too big to fail. Nigeria economy is set up to favor d banks, and any single default on a loan at d high rates would automatically lead to d compounding of d loan. It would be good to look at d breakdown of d loan.

Interest rate is a function of other factors, e.g. inflation. It is not a making of the banks. High interest rate does not necessarily lead to loan default.

There is no company that is 'too big to fail'.

basisop:

This shows how myopic your are in the recovery effort. Most people won't want to buy those properties because of problem. Some of these debtors go as far as threatening the prospective buyers. Banks have properties to sell but no buyer. Most of the collaterals are highly priced and for specific users only.

Good comment. Some people don't know that the 'realizability' of a collateral is very important. Realizability is affected by a horde of factors, e.g. location, profile of the debtor/owner, etc.

basisop:

It is in place and working well. Just that most banks still ignore the reports.

Are you sure of this? Your statement is unfair to the banks.

Naval sadiq: Those companies abroad service and pay their debt.but the case is different in nigeria they would want to use politics to can cancel their gbesse.sanusi well done joor.after pipo weh no sabi anyfin go they criticize you.

So why do companies 'abroad' file for bankruptcy? Is there any country in the world where 'loan loss' by banks is zero? That of micro-finance banks (Bangladesh example) is said to be the lowest. Taking a loan without servicing it is very bad anyway.

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

It does not 'automatically' mean that until you see his statement of networth.

It's precisely this type of policy that makes SLS an empty barrel and portrays GEJ as too corrupt to effect changes in the society.

What type of economics or accounting is publishing debts without assets? How I am going to be sure they don't have means to liquidate the debt? What happens if they have the means but simply refuse to do the right thing? Is there no procedure to take over their business, convert their assets to settle the debt? Would you also apply same procedure to a man owning just five million without prosecution? SLS is a square peg in a round hole.

One, it's wrong to issue directive to banks to stop transacting business with some entities except it affects national security which is not the case this time. Your leverage is the bank concerned. If they gave loans without collateral, how was it Otedola's problem? Did these guys force the banks to approve the loans? Can't we for once have someone to be punished? Can't we jail someone for flouting the rules? If Banks failed to comply with rules of issuing loans, punish the banks not the borrower. You publish the borrower but refuse to publish their assets and the topnotch who approved huge loans without appropriate collateral and you expect the populace to shout hurray SLS is working. smh.

Nigeria is a joke!

bayooooooo: It's precisely this type of policy that makes SLS an empty barrel and portrays GEJ as too corrupt to effect changes in the society.

What type of economics or accounting is publishing debts without assets? How I am going to be sure they don't have means to liquidate the debt? What happens if they have the means but simply refuse to do the right thing? Is there no procedure to take over their business, convert their assets to settle the debt? Would you also apply same procedure to a man owning just five million without prosecution? SLS is a square peg in a round hole.

One, it's wrong to issue directive to banks to stop transacting business with some entities except it affects national security which is not the case this time. Your leverage is the bank concerned. If they gave loans without collateral, how was it Otedola's problem? Did these guys force the banks to approve the loans? Can't we for once have someone to be punished? Can't we jail someone for flouting the rules? If Banks failed to comply with rules of issuing loans, punish the banks not the borrower. You publish the borrower but refuse to publish their assets and the topnotch who approved huge loans without appropriate collateral and you expect the populace to shout hurray SLS is working. smh.

Nigeria is a joke!

Thanks buddie! Your post is the only one close to logical reasoning here. It is unfortunate that some of us allow sentiments and "bad belle" to becloud our judgment or maybe it is lack of information.Some people here have even criminalize borrowing like Sanusi. too bad.

All of these loans in question were not recent. They were given out when the CBN itself was running a Credit Bureau service for the Bank under its Credit Risk Management System (CRMS) and because that system operated a carrot and stick policy, most Banks failed to disclose most of their bad debts. When this became obvious, private Credit Bureaus were licenced and I think there are three of them today. Since coming into the scene of these Bureaus, Banks have become more comfortable in disclosing their bad assets and I know for sure (because I was in the system until July 2012)that those mistakes of the past cannot be repeated again i.e. giving out loans to borrowers with bad credit history. Be that as it may, most of these businesses are not more than 10 - 15years old and almost all of them got those loans for business expansion. With the uncertainty in our economy, it is pretty difficult for certain businesses to thrive. Dansa foods for example lost its vital business segment in the north because of Boko Haram. Its credit default started at about 2-3years ago. Before then, they were ok. Another factor is the lack of long term deposits to finance long term borrowings in Nigeria. Banks lend to finance projects which gestation period would normally be say 10years and give a loan tenor of 4years. Expectedly, the cash generated in 4yrs would not be enough to pay back capital and interests and then CBN comes in, say the loan is bad because customer could not meet the agreed terms and direct banks to make loan loss provisions from their equity. There are many of these loans. The point I am making here is, not all of these guys set out to be bad debtors but that is not taking away the fact that some of them are also bad managers.

Now it is a silly thing to publish names of debtors in the national dailies. These loans have been sold to AMCON and AMCON have taken possession of all the collaterals securing the loans. I was part of the process in the Bank where I worked before leaving the country in July. AMCON has all the constitutional means to deal with these bad debts and they have not said that they are incapable. In fact, the law establishing AMCON says none of these debtors can sue AMCON in a bid to prolong court cases where that is ncessary which used to be the case with Banks. So AMCON is government! Sanusi should leave them to do their job and stop whipping sentiments that could even make the job difficult. Banks don't need to be told who to lend to. There is already a CBN requirement that Banks must get satisfactory credit Bureau reports on a borrower before advancing credit to them. In fact, this is the first thing CBN examiners check for on large loans when they call at your Bank and I bet most of the Banks have learnt their lessons and would not flout that rule. Sanusi's latest pronouncement is not needful at all. It is just a show of power and perhaps cleverly aimed at diverting attention from its failed N5000 note move.

obowunmi:


You are one of those that do not want change in Nigeria. What kind of rubbish mentality is this? Are you mad? Abacha employed many people too.

I am not here to exchange words with anyone. But the fact is that to do well in business, you must get loan. No one has all the money needed to grow a big company. What I don't support is not servicing a load.

Also, please mind the way you talk. Ok

karl max: 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/

Are these individuals grater than the government..just thinking out loud

1025: the cbn and pdp led govt are all jokes and jokers. if anyone fails, why can't one rich man in nigeria be in jail? the founder of Enron, one of the biggest companies in the world died in american jail. why can't this country be truthful for once? who is even deceiving who? when the masses stood up against subsidy removal, we were shown list of the oil cabals but till date, non of these cabals is facing any serious questioning talk - less of jail terms.
today, they wanted notes that they can use to carry billions in their pockets while we use our buckets and basins to carry our coins and now that we have refused, they have come out with a list of ppl banks will not give loans again. who is fooling who. make God punish all of them.

it cannot happen because, the govt. Is the cabal

ProGSM: CBN should take it easy. These guys employ and pay millions of Nigerians. If anything happens to them, Millions will go without food on their table.

Please take note.

i continue to say it, the next administration should make sanusi the EFCC chairman or ICPC director.
This man understands only financial malfeasance nothing more, his Economics is zero.

Kudos!! All the same