REVEALED: Oba Otudeko’s N70bn non-performing loan behind First Bank crisis

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About eleven years after he was retired as chairman of First Bank of Nigeria Ltd., echoes of Oba Otudeko’s controversial loan is still dragging the bank backward.

Otudeko, a billionaire philanthropist and chairman of multi-faceted Honeywell Group, is reportedly indebted to the bank to the tune of about N70 billion.

According to findings, the current confusion rocking the bank is not unconnected with the humongous debt which sources said is in the book of the tier one lender as a non-performing loan because Oba Otudeko has refused to service it even as it was disclosed to have projected Gbenga Shobo, as the Managing Director/Chief Executive Officer of the bank, so that he could help him realise his alleged plan to get loan written off by the bank under the table as a bad debt.

This move was conspicuously rejected last week by the Central Bank of Nigeria and other stakeholders who believe that Mr. Shobo is being positioned by Otudeko to win over the control of the bank.

The Central Bank expressed concern that First Bank “has not complied with regulatory directives to divest its interest in Honeywell Flour Mills despite several reminders.” The apex bank also expressed worry over the need to restructure credit facilities to the company.

In the midst of the furore, the Chairman of the Honeywell Group, Oba Otudeko, was removed as the Chairman of FBN Holdings Plc, the parent company of First Bank Nigeria Limited.

In the same vein, Ibukun Awosika was also removed from office as chair of First Bank, alongside all the board members of the bank.

The decision, the regulator said, was made “to protect 31 million customers and minority shareholders of First Bank of Nigeria Ltd”.

The CBN also announced the immediate appointment of Tunde Hassan-Odukale as Chairman of the bank. Mr Hassan-Odukale, until his appointment, was the Managing Director of Leadway Assurance Company.

The alleged loan, which was dubiously acquired about 11 years ago with his status as the Chairman of the bank, has remained un-serviced till date, an insider claimed, stating that non-performing loan is currently putting the bank and its management in tension as the economic hardship facing the country bites harder on all financial institutions.

The Central Bank has turned down a loan restructuring for Honeywell Flour Mills and subsequently directed the bank to recover the loan granted the company immediately.

Honeywell Flour Mills “is required to fully repay its obligations to the bank, failing which the CBN will take appropriate regulatory measures against the insider borrower and the bank.”

It was reliably gathered that more pressure is now on the re-instated Managing Director of the bank, Adesola Adeduntan to take a drastic step against Otudeko over the non-performing loan.

Recall, Oba Otudeko and Honeywell is in court with Ecobank over the N5.5 billion loan he took form the bank and the case is presently now at the Supreme Court.

In another development, a financial analyst has described Oba Otudeko as a
chronic debtor who is not always ready to pay back his debts citing what he is doing with Ecobank and currently with First bank.

Meanwhile, Honeywell Group in its reaction said it has a strong track record of mutually beneficial successes with its local and international financiers based on honouring obligations and delivering returns to all shareholders.

The statement said since 1972, Honeywell Group and First Bank of Nigeria have had a professional business relationship that preceded its investment in the bank over a decade later.

The Honeywell Group has said that it is servicing loan facilities obtained from First Bank of Nigeria Limited and other financial institutions across the country.
Stating that like most companies, it utilises its own equity and borrows from banks and other financial institutions to carry out its operations.

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