Titan Trust Bank Limited (TTB) has issued a press release in response to a circulating report of a special investigation into the Central Bank of Nigeria (CBN), which includes allegations of TTB’s illegal acquisition of Union Bank of Nigeria Plc (Union Bank).
In its press release, Titan Trust Bank provided a detailed account of the acquisition process to clarify the situation and set the records straight.
Nairametrics summarized the key details of the press release below
- Share Sale and Purchase Agreement: Titan Trust Bank Limited (TTB) signed an agreement on December 18, 2021, with Atlas Mara Limited and other shareholders to acquire a 93.41% stake in Union Bank.
- Extensive Due Diligence Process: The acquisition was preceded by a thorough due diligence process involving reputable firms like PricewaterhouseCoopers, Drey Law Practice, Norton Rose Fulbright, and Citibank London.
- Transparent Acquisition Procedure: TTB emphasized that the acquisition was conducted in a professional, open, and transparent manner.
- Funding and Financial Details: The acquisition was financed through a combination of $300 million in debt from Afreximbank and an equity injection of about $190 million by TTB’s major shareholders.
- Regulatory Compliance: TTB obtained all necessary regulatory approvals from the Central Bank of Nigeria, the Securities and Exchange Commission, the Nigerian Exchange Limited, and the Federal Inland Revenue Service.
- Board Restructuring Post-Acquisition: Following the acquisition on June 1, 2022, there was a change in control at Union Bank, with the dissolution of the former Board and the establishment of a new Board.
- Certificates of Capital Importation: TTB provided Certificates of Capital Importation as evidence for the legal inflow of funds into Nigeria for the transaction.
Read Titan Trust Bank Issues Official Statement refuting ‘CBN Special Investigation Report’
“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.”
“On December 18, 2021, Titan Trust Bank Limited (on the buy side) signed a Share Sale and Purchase Agreement (SPA) 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 on the sale side (otherwise referred to as the bulk shareholders).
“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.
“Titan Trust Bank engaged reputable firms like PricewaterhouseCoopers Limited (or PWC) for the financial due diligence, Drey Law Practice (DLP) for the legal due diligence, Norton Rose Fulbright (NRF) UK as Legal Advisers and Citibank London as Financial/Transaction Advisers. The Bulk shareholders engaged a prominent UK Law firm, White & Case, as their Legal Advisers on the transaction.
“The acquisition was conducted in the most professional, open, and transparent bidding process. The acquisition was funded by a combination of debt ($300 million) and an additional equity injection of about $190 million, which was contributed by TTBs two major shareholders Magna International DMCC and Luxis International DMCC.
“The Certificates of Capital Importation (CCI) for both the debt and the equity financing evidencing the receipt of these funds into Nigeria by legal means have been made available where requested.
“The $300 million acquisition facility is sourced from Afreximbank and is priced on SOFR with a margin of 6.25% (all together, almost 12percent pa) and a moratorium period of 30 months. TTB has paid interest on the loan for three interest periods (18 months so far).
“TTB sought and obtained all necessary regulatory approvals from its primary regulator 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.”
What next?
Following Titan Trust Bank’s response to the allegations presented in the leaked ‘CBN Special Investigation Report,’ the situation remains dynamic and uncertain.
- It’s important to note that the leaked report may not be the final version that could lead to an indictment.
- If it does lead to legal proceedings, the government will face the responsibility of proving beyond a reasonable doubt that a fraud was committed.
- This proof will require a detailed examination of the acquisition process, and the burden of evidence will be substantial.
- The legal and regulatory implications of this situation are complex and could lead to further investigations by regulatory bodies such as the CBN and SEC, as well as potential legal challenges in the courts.
Meanwhile, the controversy surrounding these allegations could have a significant impact on Union Bank, particularly concerning customer confidence and market perception. Union Bank, which holds over N1.6 trillion in customer deposits, could face reputational challenges as the controversy continues to attract public and media attention.