Head of Corporate Finance, First
Bank of Nigeria Plc, Mr. Taiwo Joseph Okeowo, has stated
that the bank during the tenure of Mr. Benard Longe
as managing director would not have lost the $131.7
million it loaned Investors International (London) Limited
(IILL) in the company's bid to purchase 51 per cent
of Nigeria Telecommunications (NITEL), equity if the
bank followed its rules for granting such loans.
Okeowo testifying before a Federal High Court yesterday,
said First Bank had several opportunities to back out
from the transaction but went ahead to grant the loan,
even when the loan agreement was not executed by the
borrowing company (IILL).
The transaction, he said, was sectored into two stages.
The first phase, according to him, was to pay 10 per
cent deposit of the total bid amount i.e. about $131.7
million, thereafter, the balance of $1.185 billion was
required to be raised within 90 days.
He said three institutions namely First Bank, Kakawa
Discount House and Eko Bank were to raise the amount,
but that the promoters at a meeting did not agree to
raise the amount.
Okeowo further said when his office (First Bank) went
to the market to raise the money in a syndicate, the
banks were concerned about the pricing of the facilities
which they considered to be too low and that the security
for the loan was inadequate.
Two of the banks, United Bank for Africa (UBA) and Union
Bank of Nigeria (UBN), he said, expressed concern that
the security arrangement for the loan was not adequate.
He stated the share sales agreement between IILL and
the Bureau for Public Enterprises (BPE) stated clearly
that the 10 per cent deposit ($131.7 million) was not
refundable, but that this did not stop First Bank from
disbursing the loan.
The trial judge, Justice Regina Nwodo, has fixed May
20 for the adoption of written addresses by Longe's
Counsel Chief Rotimi Williams (SAN) and Chief Richard
Akinjide (SAN) who represent the parties in the suit.
It would be recalled that Longe had filed a suit before
a Federal High Court, to challenge the termination of
his appointment with First Bank, over a loan he granted
IILL in the botched bid.
