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E-Financial

Polaris Bank Reportedly Loses N26Bn Loans to 6 Ex-Directors without Collaterals

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Polaris Bank has lost N26.005 billion worth of loans granted to 6 ex-directors, mostly without collaterals.

Polaris Bank Reportedly Loses N26Bn Loans to 6 Ex-Directors without Collaterals

Economy Post found from the bank’s 2022 annual report that 5 out of the six ex-directors did not perfect their collaterals before receiving the loans from the bank.

Only one ex-director, Jason Fadeyi of Newcross Exploration and Production, who collected N25.442 billion term loan from the bank, perfected his collaterals.

However, the term loan given to him was recorded as “lost,” meaning that it was not recovered by the bank.

From the Corporate Affairs Commission (CAC) records, Newcross Exploration and Production was registered on July 9, 2013, with Festus Fadeyi and Bolaji Ogundare as persons with significant control of the company.

Fadeyi borrowed another N30.922 billion term loan from the bank – which has been placed on the watchlist.

Placing a loan on a watch list means that “a list (a subset) from a universe of securities, loans or other financial instruments is identified for more intense monitoring,” according to the Open Risk Manual.

Based on Polaris Bank’s records, Ibiyi Ekong of Demanta Nigeria Limited is another ex-director who took loans from the bank without repaying them.

Ekong, a former executive director of the bank who resigned in 2016, owes the bank N89 million.

The bank recorded it as loss, with her collaterals not perfected.

Collateral perfection allows a legal claim to seize assets of a payor defaults, according to Investopedia, an online investment dictionary.

She now works at the Foundation for Partnership Initiatives in the Niger Delta.

Ekong also owes the bank N4 million borrowed as a mortgage loan and another N4 million taken as an auto loan, which was not repaid.

Bank records showed their collateral perfection statuses were described as “not applicable.”

Next is Timothy A. Oguntayo, who took N100 million mortgage loan but did not pay it back, prompting the bank to report it as loss.

The bank said that his collateral perfection status was “not applicable.” When someone’s collateral perfection status reads “not applicable,” it means the person is not mandated to present collateral for a loan, experts said.

Oguntayo is a former managing director of Skye Bank (now Polaris Bank), who was earlier charged by the Economic and Financial Crimes Commission (EFCC) but later exonerated.

Oguntayo also owes Polaris Bank a mortgage loan of N100 million, which was also recorded as “lost.” It means he did not pay back both loans.

Abimbola Izu, another ex-director, got N103 million mortgage loan from Polaris Bank but did not repay it, according to bank records.

Her collateral perfection status was also recorded as “not applicable.”

Bank records also showed that Izu took a term loan of N17 million with another “not applicable” collateral status.

Izu is a lawyer and principal advisor at Portalls Advisory Services.

Theodora Amaka Onwughalu is another ex-director who borrowed N19 million mortgage loan from Polaris Bank but did not pay it back. Her loan was recorded as “lost,” with collateral perfection status classified as “not applicable.”

Onwughalu is the chief executive officer of Blueshield Financial Services Limited and was the former group managing director of Mainstreet Bank Limited.

Similarly, Dotun Adeniyi, an ex-director of Polaris Bank, borrowed N27 million mortgage loan from the financial institution but did not repay it.

The loan was recorded as “lost.” The collateral perfection status was also described as “not applicable.” Adeniyi resigned from the former Skye Bank ( now Polaris Bank) board in 2016 during a shakeup, which saw all the board members resign their positions at the bank. According to bank records, the ex-directors took these loans while they were members of the board of the bank.

Tokunbo Abiru, now a Lagos senator, was appointed the managing director of the then Skye Bank in 2016 but resigned in 2020 to fulfil his political ambition. Adekunle Sonola is the current managing director of the bank.

As of December 31, 2022, total outstanding loans owed by these ex-directors of Polaris Bank, some of which would not be repaid, amounted to N 57.473 billion.

Management contributed to collapse of Skye Bank

In 2018, the Central Bank of Nigeria (CBN) revoked Skye Bank’s license and set up a bridge bank known as Polaris Bank. Skye Bank’s problems began when it used short-term funds to buy another bank, Mainstream Bank, in 2014, according to Reuters.

The Nigeria Deposit Insurance Corporation (NDIC) had accused the former management of the bank of being major contributors to the bank’s collapse, Reuters reported.

The CBN took over the bank in 2018 and injected N1.3 trillion to recapitalise and rehabilitate it.

As of 2018, the defunct Skye Bank Plc operated 300 branches across the country, employing over 500 staff members.

The bank was accused of poor corporate governance and inept management, which are evident in the loans taken without collateral and repayment.

Strategic Capital Investment Limited emerged as the preferred bidder for Polaris Bank in 2022, paying N50 billion.

It was given 25 years to repay the N1.3 trillion injected by the apex bank into the bank.

Experts call for strong corporate governance

Financial experts have urged other financial institutions to learn lessons from the defunct Skye Bank and strengthen their corporate governance structures.

“Some banks still have issues with corporate governance. It is obvious, from what you have said, that there was a total collapse of corporate governance at the defunct Skye Bank,” said an Abuja-based financial analyst, Uko Amadi.

“I guess the CBN was a bit late and did not act fast. However, banks should begin to examine themselves to ensure that things are done transparently. They are custodians of people’s money but should not act as if the deposits are theirs,” he noted.

An ex-bank worker, Chinyere Ogundamisi, said there was a need for regulators to pay a closer attention to activities of financial institutions.

“I am not for over-regulation because I think there is already over-regulation of the banking system. But I am saying that if you are regulating, get experienced people who know where loopholes should be to do the monitoring. Some persons at the CBN never worked in banks, and cannot detect some sharp practices. So, get people who worked in banks and allow them to do the monitoring.”

Bank keeps mute

Bolarinwa Rasheed, head of Corporate Communications, Polaris Bank, did not respond to questions regarding why the loans were lost even though the people were still alive.

He promised to get back to us but did not do so as at the time of going to press.

Credit: Economy Post


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E-Financial

EFCC Recovers Funds Lost to CBEX Fraud

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Ola Olukoyede, chairman, Economic and Financial Crimes Commission (EFCC), has announced that the body has recovered lost funds from the CBEX fraud scheme.

EFCC Recovers Funds Lost to CBEX Fraud

Olukoyede did not announce the amount recovered, but he assured Nigerians that the EFCC is taking action against the promoters of the scheme.

The EFCC Chairman emphasised that the suspects found are facing prosecution.

“We have found a lot of people culpable. Those who promoted that scheme are within our jurisdiction and have been arrested. So, at this moment, they are being prosecuted. And we can also say that money has been recovered, even though the process is still ongoing for us to finally forfeit it,” he said.

Olukoyede also urged Nigerians to exercise caution when investing their resources into online platforms.

“Ponzi schemes remain one of the most pervasive threats facing unsuspecting investors. The CBEX case is a clear example. We all remember the outcry that followed the collapse of the scheme, but these unfortunate situations are preventable. Nigerians must begin to conduct due diligence before committing their resources to such platforms,” Olukoyede said.

He also stressed that the body remains committed to fishing out the culprits and recovering the lost funds.

“It was only when the bubble burst that people wanted EFCC to perform magic and recover their money. In the case we investigated in Lagos, which we dubbed Operation Flush, we arrested a large number of foreigners involved in various cybercrimes, including CBEX. I want Nigerians to know that as of today, we have secured close to 150 convictions. Some of them are already serving their jail terms. And when they are through with that, we are going to send them back to where they came from. So we are monitoring them,” he added.

He urged the public to stay vigilant, assuring them that the body will see the case to the end.

“We are no longer the EFCC that drops cases halfway. Whatever we start, we will finish. Nigerians should trust us and believe in our capacity to do justice. Some of these cases are complex and may require cross-border investigations, but we are up to the task,” he said.


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E-Financial

Financial Fraud in Nigeria Surges by 45 Percent, 70 Percent of Losses Linked to Digital Platforms – CBN

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Central Bank of Nigeria (CBN) has raised the alarm over a significant rise in financial fraud cases in the country, revealing that fraud surged by 45% within one year, with 70 Percent of the resulting losses traced to digital channels, particularly unregulated virtual asset platforms.

Financial Fraud in Nigeria Surges by 45 Percent, 70 Percent of Losses Linked to Digital Platforms – CBN

Olayemi Cardoso, governor, CBN,

This was disclosed by Olayemi Cardoso, governor, CBN, in a speech delivered on his behalf by Muhammad Sani Abdullahi, deputy governor for Economic Policy, at a public lecture organized by the Economic and Financial Crimes Commission (EFCC) on Thursday in Abuja.

He added that findings from the CBN’s Financial Stability Report 2024 reveal a sharp increase in fraud.

“The CBN Financial Stability Report 2024 reveals a 45% surge in financial fraud cases, with 70% of losses linked to digital channels, including unregulated virtual asset platforms. Furthermore, over 30 Ponzi-style investment schemes exploiting digital currency narratives have been flagged by the SEC and other agencies.

“These developments pose major risks, including loss of consumer confidence, weakening of financial integrity and reputational challenges for Nigeria in the global financial system.

“In Nigeria, over $56 billion in crypto-related transactions were recorded between July 2022 and June 2023, making us Africa’s digital transaction leader. But this growth is not without consequences,” Cardoso stated.

Cardoso noted that while digital innovation has enabled broader financial inclusion, it has also introduced complex regulatory and security challenges.

“The present era of rapid technological transformation has made the adoption of digital financial services in Nigeria, including cryptocurrencies and tokenized investments, increase exponentially.

“The surge in digital innovation has brought benefits, such as greater financial inclusion and also given rise to complex challenges, such as fraud and money laundering,” he stated.

Emomotiti Agama, director general, Securities and Exchange Commission (SEC), emphasized the growing risks posed by virtual asset fraud to investor confidence and market integrity.

“Corruption remains a significant impediment to Africa’s economic growth, social development, and investor confidence.

“Today, as digital innovation transforms financial systems, we face new challenges, particularly the rise of virtual asset fraud and sophisticated investment scams, exploiting unsuspecting investors.

“These threats undermine market integrity, erode trust, and divert resources meant for sustainable development,” he said

Agama reiterated the SEC’s dedication to enhancing investor protection through increased education and awareness on how to identify and avoid fraudulent schemes.

He also emphasized the Commission’s efforts to update regulatory frameworks in response to emerging risks in virtual assets and digital investments, while promoting international cooperation to tackle corruption and illicit financial flows.

Malam Lanre Issa-Onilu, director general, National Orientation Agency (NOA), commended the EFCC for its efforts in combating financial crimes. He warned that the human cost of fraud extends far beyond the financial system.

“Experience has shown that deception is foundational to fraud, and if its impact goes far deeper, it undermines citizens’ confidence in their country. Every Naira lost to fraud causes far-reaching effects.

“It is about a child pulled out of school, a livelihood ruined, and an enterprise destroyed. These crimes are not abstract. They affect people, and our country pays dearly for it.”

He said the NOA had launched a nationwide campaign against the “get rich quick” mentality among Nigerians.

“At the National Orientation Agency, we believe that value orientation is our most powerful tool. That is why we launched a nationwide campaign several months ago against the spread of get-rich-quick syndrome. The initiative is helping all Nigerians, especially young people, to understand that lasting success comes from honesty and hard work, and it takes time.”

Hussaini Ishaq Magaji, registrar general, Corporate Affairs Commission (CAC), stressed the need for regulators, institutions, and stakeholders to remain vigilant and proactive in addressing emerging threats such as fraud, money laundering, and financial manipulation.

Magaji noted the CAC’s ongoing collaboration with the Securities and Exchange Commission (SEC) and other sector-specific regulators to strengthen corporate governance and enforce compliance, ensuring transparency and accountability within Nigeria’s financial ecosystem.

 


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E-Financial

SEC DG Decries Digital Assets Fraud as Inimical to Market Integrity

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Emomotimi Agama, Director General, Securities and Exchange Commission (SEC) has expressed concern over the growing threat of digital assets fraud, warning that it poses a significant challenge to market integrity and undermines investor confidence.

Speaking in Abuja at an event to mark African Union Anti-Corruption Day, themed “Understanding Virtual Assets and Investment Fraud”, Agama noted that corruption continues to be a major obstacle to Africa’s economic growth, social development, and attractiveness to investors.

He stated: “Today, as digital innovation transforms financial systems, we face new challenges, particularly the rise of virtual asset fraud and sophisticated investment scams exploiting unsuspecting investors. These threats undermine market integrity, erode trust, and divert resources meant for sustainable development”.

He explained that the SEC, as a frontline regulator, remains committed to “strengthening investor education on recognising and avoiding fraudulent schemes.; Enhancing regulatory frameworks to keep pace with evolving risks in virtual assets and digital investments; and Fostering cross-border collaboration to combat corruption and illicit financial flows”.

He stated that the Investment and Securities Act (ISA) 2025 introduced key provisions to regulate virtual assets (cryptocurrencies, digital tokens, and other blockchain-based assets) in Nigeria, with Commission as the primary regulator for virtual assets classified as securities or investment products.

Agama stated that all Virtual Asset Service Providers (VASPs) (exchanges, custodians, brokers) must obtain SEC approval and meet capital, governance, and cybersecurity standards.

On risk disclosures, the SEC DG noted that all platforms must warn investors about volatility, fraud, and regulatory risks, warning that there are stiff penalties for market manipulation, insider trading, and Ponzi schemes.

“The ISA 2025 provides a comprehensive legal framework for virtual asset regulation, balancing innovation, investor protection, and financial stability. The SEC will continue to issue guidelines to ensure compliance while fostering a secure digital asset ecosystem.

“We urge all stakeholders—governments, private sector players, civil society, and citizens—to join forces in promoting transparency, accountability, and ethical practices. Together, we can build resilient markets that drive Africa’s prosperity”, he added.

In his remarks, Ola Olukoyede, Chairman of the Economic and Financial Crimes Commission (EFCC) described virtual asset fraud as a fast-evolving threat to national economic security. “Another rising criminal engagement that has a potential to outpace, even money laundering, on the continent is virtual assets and investment scam”


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