Top First Bank directors linked to N99bn loan • Sanusi and Abdulmutallab (senior) are former heads of the bank • Sanusi signed off on the deal in his appraisal • The bank was cleared in recent banking reform audit

Top First Bank directors linked to N99bn loan
By Kingsley Ighomwenghian Finance Editor, Lagos

Despite claims by First Bank that its N99 billion loan to Seawolf Oilfield Services is performing, indications emerged on Wednesday to the contrary.



New details also surfaced, including the fact that Seawolf, reportedly floated in April 2007, got the initial $150 million facility in 2008.


A source told Daily Independent that the loan may have been insider related.


Hassan Oye-Odukale, a shareholder and Director of the bank, is Chairman of Seawolf.


It was also learnt that Lamido Sanusi, Central Bank of Nigeria (CBN) Governor, who was then Executive Director, Risk Management of First Bank, before becoming Group Managing Director (GMD), signed off on the deal in his appraisal.


The collateral was the rigs with which the facility was to be purchased, against banking practice.


A source said the loan was initially veiled as part of the bank’s equity contribution under the Small and Medium scale Enterprise initiative of the CBN.


The fund was moved from the bank through First Funds Limited, its investment arm.


But the company denied these charges on Wednesday, insisting that the loan followed due process.


Speaking on telephone, Celine Loader, First Bank Chief Marketing Officer, said the loan is performing. She also said there was nothing wrong in a “company founded in 2007 being given such facility a year after.”


“I have told you that the business is generating enough revenue and there is enough cash flow from its operations to service the loan.”


Asked why First Bank drafted an Executive Director, Oladele Oyelola, to Seawolf as Vice Chairman, she riposted, “He is not there as Vice Chairman. But even at that, there is nothing wrong in First Bank seconding its management staff to companies where it has investments.”


She however could not answer how many of the rigs are in the country and what was used as collateral for the loan.


But despite claims that the loan was properly appraised, according to the source, Seawolf, whose Managing Director (MD) and Chief Executive Officer (CEO) is Uwamu Adolor, is not known to have made any equity contribution.


With the facility, one rig said to be fairly used, was acquired and is now in Nigeria. Two others – Seawolf Oritsetimeyin and Seawolf Onome – are still being expected.


Neither the company nor its management team is known to have a “proven track record” in the drilling and oil services business.


Nevertheless, it is expected to compete against household names of European and American origin, like Germany’s Schlumberger, which is best known for rig and dredging business, Oceaneering, Transocean, Baker & Hughes, Lone Star International, among others.


Daily Independent also learnt that some former members of staff who have since left the bank and who were involved in the overdraft facility, have been invited to face the bank’s disciplinary committee.


In response to a text message, Sanusi wrote: “I have told you to go and ask (First Bank) any questions on Seawolf.


“Also, Seawolf has equity of $150 million, and it has shareholders. The loan is secured and it is performing. I supported it as Chief Risk Officer, it is documented. It went to exco (the bank’s executive committee), board credit committee and the full board. I also was reporting to a CEO.


“If you are looking for something, I am afraid you have to find it elsewhere. I am too busy running the CBN to be replying questions on an account in a bank that was approved even before I became MD.


“As you probably know, I am not bothered by what anyone publishes. I have only replied because you have had the courtesy to ask me. Kindly check your facts and dates with First Bank.


“The company owns oil rigs. The rigs are the collateral. The rigs are under contract to oil companies and payments are being made.”


First Bank would, however, not name Seawolf’s clients to whom the rigs have been contracted, as Loader only insisted that “your source of information is not correct.”


Discerning observers have, therefore, raised posers on the deal and the involvement of the various parties, including Sanusi, noting that at the point of granting the facility, there was no collateral – since the rigs, including those being expected, are the collateral.


A source wondered: “Supposing, that in the process of transporting the rigs to Nigeria, something awkward happens to the ship, what will then be the collateral?”


The source queried whether the process of granting the loan is in conformity with the risk assessment process of the 116-year-old First Bank.


“What was so special about a one-year old company that it gets loan of $150 million? The bank also has to say who the customers of Seawolf are to warrant the assurance that the loan is performing to calm stakeholders’ nerves.”


The board of First Bank in 2001 fired its GMD, Bernard Longe, over the non-refundable $131.7 million loan granted to the Bode Akindele-led Institutional Investment (London) Limited, for the purchase of the Nigerian Telecommunications Limited (NITEL).


The issue, which came to be known as the ill-fated IILL deal, was to enable the company purchase 51 per cent equity of NITEL.


The money was lost then because the bank did not follow its rules for granting such loans.


The amount represented the first phase, or 10 per cent deposit, after which it was to pay the total $1.185 billion balance within 90 days.


However, IILL failed to raise the amount from the international market.

You do realize, don't you, that for you to claim 'nepotic banking' by Sanusi you have to establish that the beneficiaries of the loan are closely related to Sanusi?

Some of you just sling around words without knowing their meaning.

texazzpete:

You do realize, don't you, that for you to claim 'nepotic banking' by Sanusi you have to establish that the beneficiaries of the loan are closely related to Sanusi?

Some of you just sling around words without knowing their meaning.

Did you not read that the Chairman of the recipient company is a director of First Bank which brings him into direct relationship with Sanusi, who it was that signed off on the loan as head of FBN risks mgt? However, it is not just about the beneficiaries. It is about the fact that no one mentioned this particular loan during the bank purge by Sanusis, and that FBN (btw I am a fairly strong shareholder in this bank) was not sanctioned for this bad loan like the other banks. How else do you define nepotism, Mr knower of the definition of nepotism?

Mekusxyz:

It is not about the beneficiaries. It is about the fact that no one mentioned this particular loan during the bank purge by Sanusis, and that FBN (btw I am a fairly strong shareholder in this bank) was not sanctioned for this bad loan like the other banks.

So this is not a case of nepotism then but of ineptitude or malpractice.

Nepotism is favoritism granted to families and close relations without regard to their merit.how many of the beneficiaries are sanusi's close relation or family members.get your facts well before you start running your mouth. abeg mekus,change this topic and stop embarrassing yourself.my bad,i get it,you want some tribal bashing tonight.yeye phd holder.

4 Play:

So this is not a case of nepotism then but of ineptitude or malpractice.

Who is Mutallab and who is Sanusi? Who nominated the later as CBN gov? Do the math and factor in nepotism. If you do not know the relationship between Sanusi and Mutallab, please do well to find out. Why was Mutallab not investigated like others? Why did Sanusi cover himself up? He was the FBN MD when the loan was granted while Mutallab was the chairman.

~Bluetooth:

Nepotism is favoritism granted to families and close relations without regard to their merit.how many of the beneficiaries are sanusi's close relation or family members.get your facts well before you start running your mouth. abeg mekus,change this topic and stop embarrassing yourself.my bad,i get it,you want some tribal bashing tonight.yeye phd holder.

Unrepentant illiterate

Olodo,he doesn't even know the meaning of what he posted.lwkmd

~Bluetooth:

Olodo,he doesn't even know the meaning of what he posted.lwkmd

Bloody illiterate. What is the meaning of nepotism? Sanusi is friends (and colleagues) with Mutallab, and Mutallab it was who recommended him to Yaradua for the CBN job. First Bank defaulted like other banks under the watch of Mutallab and Sanusi. CBN under Sanusi covered up for Mutallab and Sanusi (and other big men in FBN), while indicting the heads of other banks with similar offence. So which part of nepotism is difficult for you to understand? I shake my head for this half-baked commentator wannabe, Bluetooth

You have been able to establish a case of fraud or misappropriation of fund but you have not established that money went to mutallab's pocket, crimes are treated on a crime level not tribe.if the police can establish that fraud was committed with any evidence available,they should prosecute the offender.

~Bluetooth:

You have been able to establish a case of fraud or misappropriation of fund but you have not established that money went to mutallab's pocket, crimes are treated on a crime level not tribe.if the police can establish that fraud was committed with any evidence available,they should prosecute the offender.

What then was your angst with my use of the word nepostism? Was it clear or not that Sanusi and Mutallab were/are close (friendship/ business-wise) and that both went scot-free despite the bad loan they gave out as did other banks whose heads were indicted? What sort of illiterate are you, half or full-baked?

deleted

Whether it's nepotism o or tribalism o or genderlism o or Northernitism o or wickedilism o, Islamitism o, I don't care but why is he punishing others for the same crime he committed?. I'll repeat one more time, most of  the charges against Akingbola are not true. Sanusi should come out of the closet and explain to other Nigerians the reasons behind his actions.

The only dividend I'm seeing from his actions is massive layoffs in the banking industry. It's easy for us to come here and spray saliva because none of us is affected but when you hear the gory tales of the affected people, you will surely have a rethink.

There is no financial industry that is 100% sound and all Sanusi needs is just 1% reason to destabilize any financial industry. If he can ask Ovie, Elumelu, etc to resign, why didn't he do the same to Ibru and co without the melodrama that brought down their banks causing a ripple effect of massive layoffs?.