THE Senate Tuesday resolved to investigate the management and utilization of the $1.2 billion loan facility obtained by Etisalat (Nigeria) from 13 Nigerian banks.

The upper chamber mandated its Committees on Banking, Communications, Capital Market and National Security and Intelligence to probe the deal.

It also asked the joint Committee to make recommendations on ways the country’s Financial Governance Structure could be strengthened by legislations to prevent any future similar reoccurrence of such crisis.

The Senate urged relevant financial intelligence agencies of the Federal Government to investigate the management of Etisalat (Nigeria) and hold the defaulting parties accountable for their actions.

The resolutions followed the adoption a motion on “the need for Senate’s intervention in the recent ETISALAT (Nigeria) $1.2 billion debt crisis” sponsored by Senator Solomon Adeola (Lagos West)

Adeola in his lead debate noted that Etisalat Nigeria, a Telecommunication Company operating in Nigeria has in recent times been in the public eye over it’s $1.2bn loan crisis.

The lawmaker said that he is aware that the syndicated loan was acquired in 2013 as a medium-term, seven-year facility to fund expansion of the network from a consortium of 13 Banks in Nigeria.

He said that Etisalat ownership comprises of three shareholders, the United Arab Emirates Sovereign Wealth Fund through Mubadala Development Comp Abu Dhabi (45 /u), Emirates Telecommunications Group Company (40%) and Myacinth (15%) through Emerging Markets Telecommunications Services.

Adeola said that as of 2016, the company had started defaulting on its $1.2 billion loan obligations leading to a few bailouts from its Parent Company in Abu Dhabi.

He noted that only about 42% of the loan has been repaid, remaining an outstanding debt of $696 million representing 58% of its Capital, which Etisalat has failed to service since 2016.

He said that “since this year, the Banks have been moving to take over the Telecommunications Company in order to recover their funds.”

The Lagos West senator said that the Nigerian Communications Commission (NCC) and the Central Bank of Nigeria (CBN) have intervened and raised issues of regulatory compliances in trying to prevent a takeover by the banks, but the intervention has failed to produce an agreement on the debt restructuring.

He observed that all UAE shareholders of Etisalat Nigeria, including state-owned investment fund Mubadala, had exited the company coupled with the resignation of top key management officers of the Company the Chief Executive Officer Mr. Matthew Willsher, Chief Financial Officer Mr. Wole Obasunloye, Director and the 3rd Shareholder/PartnerMr. Hakeem Belo Osagie;

Adeola regretted that although it should ordinarily not be the duty of the Senate of the Federal Republic of Nigeria to wade into individual debt crisis of private sector businesses; but the Senate is convinced that if this situation is not pr0perly handled, it will have negative implications for the Nigerian Business Environment and on Foreign Investments in Nigeria in general

He also regretted that a loan of this magnitude has the capacity of setting off another Banking crisis in Nigeria, with Banks looking for bailout funds once again.

Believes the Nigerian Business Environment must be protected and insulated from all forms of fraudulent dealings in order to advance the Government’s drive towards promotion of genuine investments in Nigeria;

Regrets that about 4000 jobs are at stake as a result of these suspicious dealings;

He noted that the decision of the core investors to pull out of Nigeria raises issues of suspicion, on the intent of a Company in obtaining a loan facility, defaulting and then pulling out of the country, hoping that their shares would be used to write off the debts.

He said that he is aware of allegations that the loans have been diverted to other uses not related to the business for which the huge loan was obtained, as there was no evidence of what the Company did with the loans,

Senate President, Abubakar Bukola Saraki, said that the Senate must do what it could to protect jobs in the country and work to ensure that the right thing is always done.   –  The Nation

– Oct 24, 2017 @ 15:59 GMT |