Before Ayade Comes, CR’s N190m May Go Up In Smoke

CRS logoWith just days to the end of the Liyel Imoke era, www.calitown.com can reveal that they are desperate moves to effect a debt/equity proposal worth N153m by government agents.
The swap, stems from a portfolio of equities worth N190.04m, handed over to Lagos based Option Securities Ltd, to manage on behalf of the state in 1999. While the portfolio was valued at N239.1m in 2005, Options Securites Ltd, with a certain Reuben Ogiri as CEO, is said to have been instructed to sell some of the shares, earning the state a princely N125m.

In 2008, government injected the sum of N100m in the portfolio but the capital market crash of 2009 is believed to have brought down the value of the investment from N225m to N97.5m. While a letter was written to Options Securities Ltd authorising the company to trade with the shares, a guaranteed annual return payable to the state was negotiated. In a letter written to the company in 2010, the CRSG requested for the payment of N29m as return on investment due the state as agreed with the company but only a paltry N5m was paid.

Findings revealed that the inability of the company to pay was because it had without the state’s consent, used the portfolio as collateral to obtain an overdraft facility of N241, 884, 225 from Guaranty Trust Bank. When it could not pay back the money, which had risen to N272, 705, 359, the bank approached the Federal High Court in Lagos arguing to “recoup cash
flow to repay outstanding obligations”, which was granted by the court in June, 2010.

After a series of meetings with the CRSG and representatives of the company, Olakunle Agbebi & Co., it was discovered that the company was now in no financial position to pay the state the value of the shares. The company eventually proposed that the sum of N153m being value of the shares and the payments, accumulated overtime, be converted to enable her commence business and also meet her financial obligations to the state. The company is said to have also requested a moratorium of 18 month “to enable it stabilize before it commences payment”.

In a letter dated May 5, 2015 with refence number COM/MF/S/21/VOL.IX, Takis Caiafas, Imoke’s Finance Commissioner, is praying that Imoke “…approve the debt/equity swap proposal made by Options Securities Ltd for the sum of N153m owed to the CRSG to be converted to redeemable preference shares in the company under the terms suggested”.

One financial expert told www.calitown.com that, “this transaction it appears will benefit more, the company which traded off the state’s equities with the active connivance of a few government officials who looked the other way while the transaction went on. It is also phoney that the company proposes to commence the repayment of the principal sum from July 1, 2016 after the expiration of the 18 months moratorium. What we need to question further is why all of these is happening in the last days of this administration and if we sit back and let it happen, it will not be well for this state”.

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