Nigeria: On Trial for Graft in Nigeria, Orji Kalu Sells Own Banks in Five Countries

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(file photo).
9 September 2019

A former governor of Abia State, Orji Uzor Kalu, has sold the entire issue shared capital of his banking group, First International Banking (FIB) Group Limited, The Gambia, PREMIUM TIMES can report today.

The transaction, which has never been made public, was concluded between 2015 and 2016, documents seen by this newspaper have shown.

The documents revealing the transaction was obtained in a leaked data obtained by German newspaper, Suddeutsche Zeitung, and the International Consortium of International Journalists (ICIJ) from two offshore secrecy providers (Appleby and Asiaciti Trust) and 19 secrecy jurisdictions around the world.

The leaked 1.4 terabyte data, named Paradise Papers, consist of 13.4 million records and is no doubt one of the biggest leaks in history. PREMIUM TIMES is the only Nigerian media organization involved in that investigation.

According to one of the documents -- the term sheet reflecting the terms and conditions in relation to the acquisition of shares -- the bank was bought by a New York-based investment fund, Lilium Capital.

The Transaction

FIB Group Limited, The Gambia ("FIB") is a company engaged in providing financial services in Liberia, Sierra Leonne, Gambia, DRC and Congo.

Prior to the transaction, SLOK Nigeria Limited ("SLOK") and International Insurance Company Limited ("IICL") held 80 percent and 20 percent of the issued share capital of FIB, respectively.

Mr Kalu is the chairman of SLOK Holding.

Details of the term sheet showed that Lilium Capital acquired the entire issued share capital of FIB from SLOK and IICL for $10 million.

Similarly, it issued shares representing an aggregate of five percent of the issued preference share capital of the company to SLOK and IICL with the condition that the two firms and its owners will have no say in the running of the acquired banking group.

Lilium also proposed to make annual payment of USD1million to SLOK and IICL for a period of 5 years.

The term sheet revealed that the restructuring detail stipulated that shares held by the banking group in each of the insurance subsidiaries in countries it operates would be transferred to a separate entity that is not a part of the company.

The company had insurance subsidiaries in Liberia, Sierra Leonne, The Gambia, and Guinea.

The Parties

SLOK Nigeria Ltd is part of SLOK Holding, a wholly-owned Nigerian consortium of companies engaging in a vast array of operations with presence in the West African region.

The group operates in all sectors of the economy, mainly focusing on Oil and Gas, Banking and Finance, Media and Publishing, Real Estate, Manufacturing, Trading, Insurance, and Tourism.

Mr Kalu, the chairman of SLOK, also has investment in other businesses, including the Daily Sun and New Telegraph newspapers in Nigeria.

Simon Tiemtore, a Burkinabé, is the founder, Chairman and Chief Executive Officer of Lilium Capital, an Africa strategic investment company with targeted sectors of investment in Financial Services, Energy, Hospitality, Agro-processing and FCMG.

He founded the company after leaving Afreximbank, according to African Business Magazine.

Why Sale?

It remains immediately unclear why Mr Kalu, a businessman and politician, and other shareholders, sold the bank.

Between Thursday and Sunday, the efforts by PREMIUM TIMES to reach the senator were unsuccessful. Text messages sent to his known lines were also not responded to.

However, details seen by PREMIUM TIMES showed that the decision to sell the banking group may not be unconnected to the "faltering" status of the bank in the countries in which it operates.

Mr Tiemtore gave an insight into this in an interview with African Business Magazine in 2018.

Reacting to a question on why he was attracted to FIB group, the businessman revealed that his company looked in the direction of FIB because it fit into its investment choice of a bank "under stress".

"First of all," he said in response to the question, "we were not looking for an established bank, we were looking for a bank under stress that we could turn around, restructure and recapitalise.

"That spoke to our strengths. We were looking to recapitalise the bank, strengthening all the different areas that it operates from - credit, operation, recovery, human capital - and give it the bandwidth and the means that it needs to fulfill its mandate in the countries where we operate."

He has since gone ahead to transform the bank, re-naming it Vista Bank.

Kalu, SLOK under probe in Nigeria

Meanwhile, Mr Kalu and his company, SLOK Nigeria Limited, are under probe in Nigeria.

The former governor is standing trial alongside his former Commissioner for Finance, Ude Udeogo, and the company, Slok Nigeria Limited, on an amended 39-count charge of money laundering to the tune of N7.6 billion.

In the last week of August, the former governor and two others rested their case in the 12-year-old trial.

Mr Kalu denied allegations that he stole N7.2 billion while at the helm of affairs of the state between 1999 and 2007, saying that the state had no such funds at the time.

The politician served as the governor of Abia State from May 29, 1999, to May 29, 2007, under the platform of the then ruling Peoples' Democratic Party (PDP).

He has since defected to the ruling All Progressives Congress (APC), and now represents the people of Abia North in the senate. He is presently the Senate Chief Whip.

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