In the wake of the leaked report from the Special Investigator appointed by President Bola Tinubu to probe the Central Bank of Nigeria (CBN) during Godwin Emefiele’s tenure, Titan Trust Bank Limited has issued a comprehensive statement vehemently denying any wrongdoing in the acquisition of Union Bank.
The Special Investigator’s report alleged that the acquisition, which was finalized in mid-2022, did not follow due process and insinuated that Emefiele and associates used illicit funds stolen from the CBN to purchase Union Bank.
In a detailed statement, Titan Trust Bank refuted the allegations, asserting that “the acquisition was conducted in the most professional, open, and transparent bidding process.” The bank clarified key points to address concerns raised by the report.
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“The attention of the Board and Management of Titan Trust Bank Limited has been drawn to the widely circulating report of the special investigation into the activities of the Central Bank of Nigeria wherein, among other things, an allegation of illegal acquisition of Union Bank of Nigeria Plc (Union Bank) by Titan Trust Bank Limited (or TTB, the Bank) has featured prominently.
“We are aware that our customers, shareholders, employees, and other stakeholders of the two banks will naturally be troubled by this allegation. Consequently, the Board and Management of Titan Trust Bank Limited wish to clarify the following to set the records straight,” the bank said.
According to the statement, Titan Trust Bank signed a Share Sale and Purchase Agreement (SPA) on December 18, 2021, with Atlas Mara Limited, Union Global Partners Limited, Emeka Emuwa, Standard Chartered Bank, Montane Partners West Africa Limited, TLG Africa Growth Impact Fund, and Sanlam Life Assurance Limited – the bulk shareholders of Union Bank. These shareholders collectively owned 93.41 percent of Union Bank’s issued ordinary share capital.
The acquisition process involved an extensive due diligence process with reputable firms such as PricewaterhouseCoopers Limited (PWC) for financial due diligence, Drey Law Practice (DLP) for legal due diligence, Norton Rose Fulbright (NRF) UK as legal advisers, and Citibank London as financial/transaction advisers. The bulk shareholders engaged White & Case, a prominent UK law firm, as their legal advisers.
“The bulk shareholders together owned 93.41percent of Union Banks issued ordinary share capital. The SPA was the product of a long and tortious due diligence process that involved leading financial and technical advisers,” the statement said.
Titan Trust Bank noted that the acquisition was funded through a combination of debt ($300 million) and an additional equity injection of about $190 million, contributed by the bank’s major shareholders, Magna International DMCC and Luxis International DMCC. The Certificates of Capital Importation (CCI) for both debt and equity financing, evidencing the legal receipt of funds in Nigeria, have been made available upon request.
The statement further clarified that the $300 million acquisition facility was sourced from Afreximbank and is priced on SOFR with a margin of 6.25%, totaling almost 12% per annum, with a moratorium period of 30 months. Titan Trust Bank confirmed payment of interest on the loan for three interest periods (18 months).
Titan Trust Bank stated that it sought and obtained all necessary regulatory approvals from the Central Bank of Nigeria (CBN), the Securities and Exchange Commission (SEC), the Nigerian Exchange Limited (NGX), and the Federal Inland Revenue Service (FIRS), among others.
“Following TTBs acquisition of 93.41percent controlling interest in Union Bank on June 1, 2022, a change in control was effected with the dissolution of the former Board and the reconstitution of a new Board with new leadership.”
The bank’s statement was intended to reassure its customers, shareholders, employees, and stakeholders that the acquisition had been carried out transparently and in compliance with regulatory and legal standards. Nonetheless, the potential progression of the matter remains uncertain. Analysts speculate that the investigator’s report, regardless of its outcome, could have a detrimental effect on both investor and customer confidence in the bank.