Some newspapers had reported that the Group Managing Director/Chief Executive Officer of Spring Bank Plc, Mrs Sola Ayodele, and key officers of the bank had been charged to court for allegedly defrauding Strand Capital Partners Ltd of the sum of N5.2 billion, for which the GMD/CEO of the bank had been declared wanted.
But the CBN, in a letter dated Tuesday, September 14, 2010, to the Principal Solicitor, Legal Resources Alliances, who are legal advisers to Strand Capital Partners, stated that Strand Capital’s claims to N5.2 billion from Spring Bank could not be established.
The statement, signed by the Director of Banking Supervision of the CBN, stated as follows: “At the meeting of the CBN examiners with the petitioner on January 19, 2009 and the subsequent meeting held with the directors of banking supervision of CBN, on February 23, 2010, your claim that Spring Bank’s offer letter of July 7, 2008, extending a N5.208 billion underwriting line facility to Strand Capital Partners Limited is an irrevocable underwriting agreement, in accordance with the enabling statutes between Spring Bank Plc and NSL, could not be established, because you failed to provide a copy of an executed underwriting agreement between the bank and NSL.
“Your assertion that the offer of an underwriting facility could be construed and treated in a similar manner as an underwriting commitment could not also be substantiated, while your promise to provide evidence as requested by the CBN has not been complied with up till time of writing this letter.”
The statement, entitled “Spring Bank Plc Underwriting Commitment/Agreement in Respect of National Sports Lottery Plc Public Offer,” which was a response to a petition by Legal Resources Alliance, on behalf of Strand Capital Partners Ltd, further stated that:
“Strand Capital Partners Limited, on July 3, 2008, wrote to Spring Bank Plc, requesting for an overdraft and/underwriting line of up to N5 billion, to part finance its operations and enable it to act as underwriters to public and private security/stock offerings. The tenor was to be determined on a case by case basis, subject to a minimum of 90 days, with rollover options, while the security pledged were shares/stocks purchased with the facility.
The management of Spring Bank Plc, in a letter dated July 7, 2008, offered an underwriting line facility of N5.208 billion to Strand Capital Partners Ltd to partially underwrite the IPO of NSL Plc subject to some conditions precedent to draw down.
The facility was for 90 days and was to expire on October 12, 2008.
The source of repayment was to be proceeds of the offer of NSL or a lien on 336 million ordinary shares of NSL, which was yet to come into existence.
Based on Spring Bank’s offer letter, the board of directors of Strand Capital Partners Ltd passed a resolution at its meetings of July 7, 2008, authorising the company to accept the credit facility/banking accommodation of N5.208 billion from Spring Bank Plc.
There was an internally transferred credit of N5.208 billion into NSL offer proceeds account number 001203910002101 of Spring Bank.
“The statement of account referred to above, which you claimed was your client’s money, was, in fact, an “Account Payable/suspense” account that was created by Spring Bank. The account was an internal account of the bank that was non-operating and maintained for record keeping purpose. It was not meant for disbursement as one of the management’s directives was that there should be no outflow of funds from the account. The two credit entries that made up the N5.208 billion were reversed by the bank on January 19, 2009. We noted that the account was opened on September 11, 2008, after the offer had closed and, as such, could not have been credited to the customer on the day the offer opened, which was July 14, 2008. Also NSL Plc did not direct the bank to open the account, and thus it cannot lay claim to it.”
NSL Plc suit number M/610/2008 was filed in the high court of Lagos State on November 5, 2008, making claims of N5.208 billion underwriting commitment among other prayers.
However, it was noted that the firm of Oghogho Ayauru & Co, lawyers to NSL, filed a notice of discontinuance at the high court of Lagos State on February 19, 2009.
On April 24, 2009, the firm of Silas Ukaro & Co filed a statement of claim in respect of the issue under consideration against the bank on behalf of Strand Capital Partners Ltd in the high court of Lagos State. The case was yet to be determined.
The bank was not registered by the Securities and Exchange Commission (SEC) as an underwriter and could, therefore, not underwrite an issue of shares.
Some of the conditions precedent to drawdown, which included the following, were not met:
Opening of an account by Strand Capital Partners Limited with Spring Bank for the domiciliation of all proceeds of the public offer Counter indemnity of Strand Capital Partners Limited. Approximately N110 million, which was realised out of the public offer of N12 billion was used by NSL in the company’s business.
After its detailed findings, the apex bank further counselled that since the case was before a competent court, NSL should allow the court process to run its course.
It is also important to note that contrary to claims in some quarters, the GMD/CEO is not on the run, but has vowed to frustrate every effort by the smear campaigners to fraudulently take away N5.2bn from the vaults of the bank.
Already the bank has secured an order of court restraining the Police from further harassment of the GMD and others mentioned in the matter.
| Posted: at | |
bafyguy
TRENDING GISTS 
Yoruba Nation: Akintoye, Sunday Igboho Write Open Letter To Tinubu, Seek Exit From Nigeria
Pres. Tinubu Set To Embark On Fresh Trip To Netherlands And Saudi Arabia
Two Soldiers Dismissed By Nigerian Army For Stealing Dangote Refinery’s Cables
Arsenal v Chelsea: English Premier League Match,Team News,Goal Scorers and Stats