News
CBN Orders First Bank To Recover ₦5.5bn Loan From Honeywell Within 48 hours
- The CBN alleged that Honeywell Flour Mill is enjoying unethical protection from First bank
The Central Bank of Nigeria has given First Bank Nigeria Limited 48 hours ultimatum to retrieve loans given to Honeywell Flour Mill.
The CBN said the move became imperative due to first bank failure to adhere to its orders.
Ekohotblog had on Thursday reported the sacking of the Ibukun Awosika-led board of the bank following the controversy that trailed the unethical removal of the bank’s managing director, Adesola Adeduntan
In a letter dated April 26 and addressed to the now ousted Chairman of First Bank, Ibukun Awosika, the CBN vows to crack the whip if loans given to Honeywell are not recovered in shortest possible time.
The apex bank ordered Honeywell to fully pay its borrowed loan to First bank within 48 hours, or else appropriate measures will be taken against the insider borrower and the bank.
Oba Otudeko, the Chairman Honeywell Group, had also served as Chairman of FBN Holdings PLC until he retired in 2010.
The apex Bank disclosed that First Bank had been warned previously to do what was appropriate and comply with the regulator’s directives to disentangle itself from Honeywell.
The CBN alleged that Honeywell Flour Mill is enjoying unethical protection from First bank despite the bank’s feeble balance sheet and precarious situation.
It stated that the practice was against the conditions for the restructuring of the company’s credit facility and payment structure.
The letter stated that Honeywell will now have to pay its loan immediately, since First bank refused to follow the regulatory condition, the restructuring is considered invalid.
“We are concerned that the bank has not complied with regulatory directives to divest its interest in Honeywell Flour Mills despite several reminders.
“We further noted that after four years the bank is yet to perfect its lien on the shares of Mr Oba Otudeko in FBN Holdco which collateralised the restructured credit facilities for HoneyWell Flour Mills contrary to the conditions precedent for the restructuring of the company’s credit facility.
“Given the bank’s failure to perfect the pledge and satisfy conditions for regulatory approval, the restructuring has thus been invalidated and the credit facilities now payable immediately.
Read Also: First Bank Crisis Deepens As CBN Fires Directors, Reinstates Adeduntan As MD
“Consequently, the company is required to fully repay its obligations to the bank within 48 hours failing which the CBN will take appropriate regulatory measures against the insider borrower and the bank,” the letter read.
Furthermore, the apex bank asked First Bank to forward evidence involving the divestment of interest in Honeywell Flour Mills groups and Bharti Airtel Nigeria Ltd within 90 days in line with CBN regulations.
Otudeko obtained N5.5 billion loans from Ecobank in 2013. The loan later became a matter of litigation and the case is still in the pending before the Supreme Court.
The CBN discovered that Otudeko’s shares in Airtel were used as collateral for the loan in Ecobank while the same asset was also used to obtain a loan in First Bank.
Advertise or Publish a Story on EkoHot Blog:
Kindly contact us at [email protected]. Breaking stories should be sent to the above email and substantiated with pictorial evidence.
Citizen journalists will receive a token as data incentive.
Call or Whatsapp: 0803 561 7233, 0703 414 5611
