CBN denies any wrongdoing in sales of Polaris Bank

The Central Bank of Nigeria (CBN) has denied any wrongdoing in the sale of Polaris Bank, noting that the divestment was executed based on the relevant laws, global best practices for bank resolutions, and requisite regulatory approvals.

This follows claims by an online publication that CBN overlooked a bigger offer.

Recall that the Central Bank of Nigeria and AMCON announced the completion of the sale of Polaris Bank’s entire shares to Strategic Capital Investment Limited (SCIL), a company owned by Auwal Lawan Abdullahi, a son-in-law to former military head of state, Ibrahim Babangida.

SCIL paid the upfront transaction fee of N50 billion, and in accepting the terms will repay fully the sum of N1.305 trillion being the consideration bonds injected by the CBN over 25 years.

Responding to the criticism, CBN described the accusation as “spurious, malicious, and misleading.

The apex bank stated this in a statement, stressing that “the divestment was executed based on the relevant laws, global best practices for bank resolutions, and requisite regulatory approvals”.

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According to the statement by the Director of Corporate Communications Osita Nwanisobi, the CBN had to correct the inaccuracies contained in the said report “given the potentially grave implications for the stability of the bank, financial sector and the Nigerian economy”.

It added: “For the records, the public is referred to the statement dated October 20, 2022, by CBN & AMCON announcing the sale of 100% equity in Polaris Bank to a new core investor, Strategic Capital Investment Limited (SCIL), wherein it provided copious details of the process by which the sale was conducted.

“Contrary to claims in the aforementioned online publication, the divestment from Polaris Bank was supervised by a Divestment Committee (Committee) comprising senior representatives of AMCON & CBN and supported by reputable legal and financial advisers. “In addition, the divestment mode, process and decision received requisite board and regulatory approvals.”

It added that “At no time did any other party make a higher purchase offer as falsely claimed by the online publication. The entity in question, Fairview Acquisition Partners, had indicated an interest in acquiring two banks, including Polaris Bank, for a total sum of N1.2 trillion, an indicative offer which significantly discounted the existing N1.305 trillion debt owed by Polaris Bank to AMCON and so represented a material loss to the Federal Government”