The insiders of First Bank of Nigeria who took loans in the bank with controlling interest on the board of Directors, failed to adhere to the terms of restructuring of their credit facilities, which contributed to the poor financial state of the bank.
This was disclosed by Godwin Emefiele, Governor of the Central Bank of Nigeria (CBN) in a press briefing late yesterday.
“The CBNs recent target examination as at December 31st 2020 revealed that insider loans were materially non-compliant with terms of restructure of the loans,” Emefiele said.
“For example non perfection on liens on shares and collateral arrangements that CBN had insisted on for over 3 years, despite several regulatory reminders. The bank has also not divested its non-permissible holdings in non-financial entities in line with regulatory directives.”
The CBN in a letter to the former Chairman of the Bank dated April 26th, 2021, said the bank had not complied with regulatory directives to divest its interest in Honey Well Flour Mills despite several reminders.
The bank had also not perfected its lien on the shares of Oba Otudeko in FBN Holdco which collaterised the restructured credit facilities for Honey Well Flour Mills contrary to conditions precedent for the restructuring of the company’s credit facility.
The bank had also failed to divest its equity investments from its holdings in Bharti Airtel Nigeria in line with extant regulations.
