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Skye Bank Shareholders Declare CBN Action An ‘Hostile Takeover’

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Shareholder groups across the country have reacted bitterly to the takeover of Skye Bank Plc following the revocation of its operating license by the Central Bank of Nigeria, CBN, on Friday, September 21, 2018.

The CBN had revoked the operating licence of the bank and subsequently transferred its assets and liabilities to a newly licensed bridge bank called Polaris Bank Limited.

Godwin Emefiele, the CBN governor, at a news conference in Lagos said the decision was due to failure of its shareholders to recapitalise the bank.

“As a responsible and responsive regulator and in consultation with the Nigerian Deposit Insurance Corporation, NDIC, we have decided to establish a bridge bank, Polaris Bank, to assume the assets and liabilities of Skye Bank.

“The strategy is for the Asset Management Company of Nigeria, AMCON, to capitalise the bridge bank and begin the process of sourcing investors to buy out AMCON,” Emefiele said.

He, however, assured all depositors that under the arrangement, their deposits shall remain safe and that normal banking services shall continue in the new bank on September 24, 2018.

NDIC has sold Polaris Bank to the Asset Management Corporation of Nigeria, AMCON, with the mandate to stabilise the bank as well as return it to profitability for the purpose of selling it to interested investors. Consequently, AMCON will inject N786 billion into Polaris Bank to bring its net value to zero.

Miffed by the decision of the apex bank, shareholders have threatened to challenge what they described as illegality and impunity on the part of the CBN and other regulators in the financial service sector. Speaking in an interview with our correspondent, National President, Constance Shareholders Association of Nigeria Mallam Shehu Mikail, faulted the CBN’s claim that shareholders refused to recapitalise the bank.

“Since the composition of the interim board by the CBN in 2016, shareholders have been kept at perpetual suspense.  There has been no board meeting whatsoever. I recall that it was the apex bank that constituted the interim board of the bank in 2016. It also extended its tenure for another two years.  There’s no transparency in the management of the bank thus far. No due process was followed by the parties involved. We are determined to fight this to the end because we see this as undue intimidation by the CBN and other agencies of government,” he stressed.

Also reacting to the Skye Bank takeover, National Coordinator, Progressive Shareholders Association of Nigeria, Mr. Boniface Okezie, who said shareholders have been vindicated by CBN’s action, recalled that shareholder groups warned against the acquisition of Mainstreet Bank, noted that such action may have sounded the death knell on Skye Bank.

“Shareholders’ funds were used for the acquisition there was no bond raise or bond issue as the case may be. So this was what plundered the bank’s fortunes. I can assure you that shareholders are determined to speak with one voice and take up the CBN. Although we are in court already over the acquisition of Afribank and others, and we are willing to challenge this fresh illegality by the CBN in the court of law,” he stressed.

Okezie further maintained that the shareholder groups will rally all other stakeholders to challenge the decision of the CBN and other sister agencies and ensure that “justice is not only done but seen to be done on the matter.”

Echoing similar sentiments, Sir Sunny Nwosu of Independent Shareholders Association said the CBN statement on the takeover of Skye Bank smacks of insensitivity on the part of the regulator.

“The announcement of withdrawal of license and takeover of Skye Bank by the CBN sent the wrong signal out there. CBN ought to have been able to manage the situation well,”he said.

Nwosu who did not foreclose the possibility of taking legal action against the CBN and others, said, shareholders await further explanation from the regulators in order to know the next line of action.

Read more at The Nation

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