Home Business Banking & Finance CBN denies allegations on Polaris Bank sale

CBN denies allegations on Polaris Bank sale

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The Central Bank of Nigeria (CBN) has denied any wrongdoing in the recent sale of Polaris Bank. It also described claims that a higher offer was made during the bidding process to buy the Bank as spurious, malicious, and misleading.

In a response to an online publication that another party made a higher purchase offer than what the apex bank eventually accepted, CBN’s Director of Corporate Communications, Osita Nwanisobi described claims as “spurious, malicious, and misleading”.

In the statement issued in Abuja on Wednesday, the CBN spokesman said: “The attention of the Central Bank of Nigeria (CBN) has been drawn to a spurious, malicious, and misleading online publication, which made several false claims concerning the recent sale of the Federal Government’s interest in Polaris Bank Ltd. Given the potentially grave implications for the stability of the bank, financial sector, and the Nigerian economy, the CBN is constrained to correct these inaccuracies.

“For the records, the public is referred to the statement dated 20th October 2022, by CBN and AMCON (Asset Management Corporation of Nigeria) announcing the sale of 100 percent 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.

“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”.

The statement also addressed accusations that it did not consider the application of other potential bidders.

It continued: “Notwithstanding, along with twenty-four (24) other parties, Fairview Acquisition Partners was invited by the financial advisors to participate in the sale process via the execution of a Non-Disclosure Agreement (NDA), the first stage of the process.

“The financial advisors informed the Committee that Fairview Acquisition Partners neither executed nor returned the NDA despite verbally confirming receipt of the agreement and after follow-up from the financial advisors.

“Therefore, Fairview Acquisition Partners did not take the opportunity to update their offer by participating in the divestment process and thus did not make a binding purchase offer for Polaris Bank.

“The divestment was executed based on the relevant laws, global best practices for bank resolutions, and requisite regulatory approvals. The Committee, along with its legal and financial advisers, conducted a rigorous technical and financial evaluation of the purchase proposals, assessing promoters’ fitness and propriety, offer price received vs. reserve price, funding structure and financial capacity, strategy and growth plans, amongst others”.

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