Anxiety in Polaris Bank over $32 million owed NNPC
AGF, NNPC, Unity, Sterling, Keystone and Fidelity banks to appear before Reps committee next week
BY ROTIMI DUROJAIYE
There is panic among shareholders, board, and management of Heritage Bank, as the House of Representatives has threatened to authorize the Central Bank of Nigeria for the takeover of the financial institution.
The lawmakers made this threat on Thursday amidst Heritage Bank’s inability to pay the federal government what it owed.
According to the Reps’ ad hoc committee on the assessment and status of all recovered loots (movable and immovable assets) from 2002 to 2020 by agencies of the federal government for effective efficient management and utilization, Heritage Bank’s about $32 million debt to the federal government is more than its entire share capital.
Issuing the threat, the chairman of the committee, Adejoro Adeogun, at an investigative hearing in Abuja, maintained that the financial institution cannot owe more than its share capital.
His words: “If Heritage Bank is owing Nigeria more than its share capital, we will not hesitate to ask the National Assembly to write to CBN to take over Heritage Bank.
“They cannot be owing more than their share capital, sit on it and feel too big to respond to invitations from the National Assembly. Clerk, you have to write them, give them till Wednesday next week. That is the last time we are going to give them.”
In 2012, the core investor, IEI Plc, through IEI Investments Limited, acquired the Societe Generale Bank of Nigeria license from the CBN.
Having fulfilled all required criteria, the bank returned 100% of existing SGBN account holders’ money to their owners.
Heritage Bank Plc is a large financial services provider in Nigeria.
Currently licensed as a National Bank, it offers banking and financial services in the country, including the South, West, South East and the North.
As of December 2015, the total asset valuation of the bank was estimated at about $1.7+ billion (N483.4 billion).
Its shareholders’ equity is worth at least $88 million (N25 billion), the minimum capital requirement by the CBN for national banks.
The Reps committee has also threatened to issue a warrant of arrest on the managing director of Polaris Bank for non-appearance to account for over $32 million unremitted funds it owed the Nigerian National Petroleum Corporation.
A representative of Polaris bank who identified himself simply as head of legal services had told the committee that the money was remitted to the government and evidence of payment tendered to the CBN.
But Umar Ajiya, chief financial officer of NNPC, denied this and said it is yet to receive any payment from the bank.
The chairman of the committee subsequently accused the bank of “falsehood”.
“You can’t stand for Polaris. We can’t stand your falsehood; your bank has been constantly failing to appear before this committee.
“You can’t keep government funds, and you will be playing games with it. NNPC has written to us that they have not received the remittance.You can’t speak for your bank. If your bank continues with this level of unseriousness, I will issue an arrest warrant against the MD.
“You did not tender any evidence, you wrote letters to NNPC saying that you have directed CBN to make payments. Directing CBN does not mean you have paid the money.
“You directed CBN to use your reserve and if they make that payment from your reserve, it will fall below the regulatory requirements and so, CBN has rejected your advice.
If you keep acting like you are bigger than the National Assembly, we will issue warrant of arrest against your MD. I think we are getting to that.
“We don’t accept this gentleman’s representation, and we are going to adjourn your (Polaris) hearing to Wednesday next week. Get your MD to come.
“You are owing $32 million; this money is supposed to be remitted to the federation account to fund the 2022 budget and you can’t continue to hold on to the federal government’s money.
You have between now and Wednesday next week to appear here with evidence of payment, not instructions to CBN that has not been honoured,” Adejoro said.
The panel has also given the accountant general of the federation, NNPC, Unity, Sterling, Keystone and Fidelity banks one week to appear before it.
