Chairman of Titan Trust Bank, Tunde Lemo, has insisted that the acquisition of Union Bank of Nigeria Plc followed due process and met all regulatory requirements, including that of the Securities and Exchange Commission and the Central Bank of Nigeria.
Lemo, a former deputy governor of the Central Bank of Nigeria, spoke in an interview with Sunday PUNCH following the release of the report of the special investigation into the activities of the CBN and other related entities.
The final report, submitted to President Bola Tinubu on Wednesday, accused the immediate past governor of the CBN, Godwin Emefiele, of using ill-gotten wealth to acquire Union Bank and Keystone Bank through proxies.
However, Lemo insisted that the establishment of Titan Trust Bank and subsequent acquisition of Union Bank were transparent and duly verified by the relevant regulatory bodies.
“The core shareholders and the banks will respond appropriately. Due process was followed in the establishment of Titan Trust Bank and every process that led to the acquisition of Union Bank was verified by the CBN, SEC and other regulators. The core shareholders will respond to the specific allegations against them,” he said.
Lemo warned that the publication of unverified information on banks could have adverse effects on the banking industry.
“I sincerely recommend caution in the publication of unverified information about these financial institutions as they are both deposit-taking institutions. The good news is that the banks are healthy and stable,” he added.
The special investigator, Jim Obazee, said, “When we carried out the investigation, we discovered that some persons were used as proxies by Godwin Emefiele to set up Titan Trust Bank and acquire Union Bank therefrom, all from ill-gotten wealth.
“We were able to secure some documents and investigation reports that will lead to the forfeiture of the two banks to the Federal Government. We have completed our investigation on this acquisition and have also held meetings with the relevant parties except for Cornelis Vink, who is currently hospitalised in Switzerland.”
In a separate statement by its Corporate Communications Department, Titan Trust Bank said on December 18, 2021, it signed a Share Sale and Purchase Agreement with Atlas Mara Limited, Union Global Partners Limited, Emeka Emuwa, Standard Chartered Bank, Montane Partners West Africa Limited, TLG Africa Growth Impact Fund, and Sanlam Life Assurance Limited.
The bulk shareholders, according to the statement, together owned 93.41 percent of Union Bank’s issued ordinary share capital.
It said, “The SPA was the product of a long and tortuous due diligence process that involved leading financial and technical advisers. Titan Trust Bank engaged reputable firms like PricewaterhouseCoopers Limited for the financial due diligence; Drey Law Practice for the legal due diligence and Norton Rose Fulbright, UK, as legal advisers; and Citibank London as financial/transaction advisers. The bulk shareholders engaged a prominent UK law firm, White & Case, as their legal advisers on the transaction.
“The acquisition was conducted in the most professional, open, and transparent bidding process. The acquisition was funded by a combination of debt ($300m) and an additional equity injection of about $190m, which was contributed by TTB’s two major shareholders – Magna International DMCC and Luxis International DMCC. The Certificates of Capital Importation for both the debt and the equity financing evidencing the receipt of these funds into Nigeria by legal means have been made available where requested. The $300m acquisition facility is sourced from Afreximbank and is priced on SOFR with a margin of 6.25 percent (all together, almost 12 percent pa) and a moratorium period of 30 months. TTB has paid interest on the loan for three interest periods (18 months so far).
“TTB sought and obtained all necessary regulatory approvals from its primary regulator – the Central Bank of Nigeria, the Securities and Exchange Commission, the Nigerian Exchange Limited, and the Federal Inland Revenue Service, among others.
“Following TTB’s acquisition of 93.41 per cent controlling interest in Union Bank on June 1, 2022, a change in control was effected with the dissolution of the former Board and the reconstitution of a new Board with new leadership. TTB proceeded to conduct a Mandatory Takeover Offer, which was legally triggered by the acquisition of 93.41 percent of Union Bank by TTB, bringing the percentage float of Union Bank shares to less than 20 percent. The purpose of the MTO was to give the minority shareholders the opportunity to offer their shares on the same terms as was offered to the bulk shareholders. The MTO was conducted after all due regulatory approvals were obtained.”
“On allegations relating to the ownership of Titan Trust Bank, the Board and management provided the special investigators with the share ownership structure in TTB, including the holdings of Magna International DMCC and Luxis International DMCC owned by Rahul Savara and Cornelius Vink. These individuals are prominent global entrepreneurs and have thriving businesses in Nigeria and several countries around the world. The shareholding structure is also verifiable at the Corporate Affairs Commission.”
The bank urged its customers, shareholders, and stakeholders to remain calm as it would do everything legal to ensure that the current misunderstanding was clarified.
