Emefiele Optimistic of Peaceful Resolution of MTN, Banks’ $8.1bn Crisis
Governor of the Central Bank of Nigeria (CBN), Godwin Emefiele, on Tuesday, assured Nigerians and the international community that the apex bank would resolve the $8.1 billion forex repatriation dispute involving MTN and four commercial banks amicably, so that all parties involved and the Nigerian government will be pleased in the end of it all.
He also revealed that Skye Bank’s name change to Polaris Bank was in compliance with legal requirements for a commercial bank embroiled in crisis and being repackaged for fresh acquisition by willing investors. He said Polaris Bank was duly registered with the Corporate Affairs Commission and licenced by the CBN.
Speaking in Abuja at a press briefing after the 263rd Monetary Policy Committee meeting, Emefiele said it was important for the public to know that the $8.1 billion is the dollar equivalent of MTN’s naira generated from its profit.
“So I would neither call it a fine or a penalty. What CBN sought by asking MTN to return that money is that we want a reversal of that transaction because it was not finally authorised by the CBN. And because the Fund moved through these four banks, the quantum of dollars that passed through the banks is what we said the banks needed to remit back, or the company needed to remit back to the CBN through the banks.”
It did not mean that these were the banks’ obligation and we understand that there was some interpretation in some quarters that aside from the naira penalty, that there were some conclusion that those dollars attributed to have been remitted by these banks on behalf of MTN were indeed the liabilities of the bank and that is why we provided a clarification to the banks when they called us that the liability is that of MTN and not theirs and that the CBN was not in any position or in any way going to debit the bank for the dollar because it was not their liability.
“We will go through the pain again to invite the banks and MTN to prove their case, because it is normal that we should allow them to clear themselves and that is what we are doing and I believe that in due course we should make a final call on this subject” he said.
On Skye Bank, the CBN Governor allayed fears of other banks being unhealthy.
“The strategic health of the Nigerian banking system remains sound. In every chain, there will always be strong point and weak points, but what we will continue to do is to make sure that that chain remains strong in all aspects of it and that is what we did with Skye bank. We don’t want to throw about 5,000 staff of the bank into the labour market.”
“I will love to see a situation where banks are not liquidated, that we have to think outside the box to see how much we can ensure that we have more banks in the country than have less number of banks in the country, and that is what we are doing”, he explained.
Emefiele said Skye Bank’s journey to crisis began two years ago when the news broke that the bank had slided into negative capital as a result of Non-Performing Loans.
“At that time, we compelled the entire board and executives to resign and they did.”
After that, before we conducted an internal audit the hole (financial gap) was about N370 billion. After the forensic audit, it came to the level it was today, which is almost about N800 billion.
“So, what we did was to say that having established a hole at this level, tax payers money will be invested in this bank as a loan.”
“So, we decided that there is a need to let shareholders know, particularly those that have lost their investments. We will try to make sure that small investors remain protected.”
“It is for this reason that the name had to be changed from Skye bank to Polaris Bank. The name had to be changed for legal reasons, having gotten to the point where the Central Bank of Nigeria has invested close to N800 billion in this bank. At some point, it must be seen to be owned by the CBN until we find investors that can pay a fair price for the bank”, he noted.
At Newswire, we present the world of law and the issues that engage them. This edition is yet again, ‘Mind-blowing’. Go get your copy(ies) Now!
