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CBN Gives Hope to Minority Shareholders of Defunct Skye Bank

By Dipo Olowookere

The Central Bank of Nigeria (CBN) on Tuesday said efforts would be made to ensure minority shareholders of the defunct Skye Bank Plc do not completely lose their investments in the financial institution.

Governor of the CBN, Mr Godwin Emefiele, while addressing newsmen yesterday in Abuja, disclosed that the decision to revoke the operating license of the lender was done in the interest all stakeholders.

However, the central bank chief said the minority shareholders of the financial institution, which has been nationalised to Polaris Bank Limited, would have the value of their investment “substantially whittled down.”

But Mr Emefiele did not state how the apex bank plans to compensate the small investors in the lender and the process.

Last Friday night, the central bank nationalised Skye Bank and created a bridge bank called Polaris Bank Limited.

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Hours later, the Nigerian Stock Exchange (NSE) announced that from Monday, September 24, 2018, trading on the shares of Skye Bank on its platform would be suspended following the regulatory action.

This left shareholders of the bank devastated, giving up any hopes of getting anything from the lender.

But taking questions from newsmen on Tuesday, Mr Emefiele said, “The situation with Skye Bank like you all know is that as at two years ago, when we took over [its affairs], the bank had slipped into negative capital as a result of non-performing loans (NPLs).

“At that time, we compelled the entire board and the executive management to resign and they willingly left.”

“Before we conducted a forensic audit [on its books], the hole was about N370 billion and after the audit, it came to the level that it is right now, close to about N800 billion and what we decided to do is that, having established the problem, and with the decision to invest taxpayers money in this company, though as a loan, then there was a need to let shareholders know, particularly, I repeat, particularly, those we consider to be prominent and important shareholders that they’ve lost their investments.

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“We will try just like we have done in the situation of depositors to make sure that the small investors (minority shareholders) remain protected under some arrangement, but notwithstanding that the fact that their holdings would be substantially whittled down,” Mr Emefiele said at the briefing monitored by Business Post in Lagos yesterday.

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The CBN chief explained that in order to avoid future legal issues, the name of the bank had to be changed from Skye Bank to Polaris Bank.

“The name has to be changed for legal reasons, having gotten to a point where the CBN and government have invested about N800 billion in this bank, at some points, it must be seen to be owned by the CBN until we find investor that can pay a fair value for this enterprise. That is the compelling reason the name had to change,” he said.

Business Post reports that as at the last day shares of Skye Bank were traded on the NSE, last Friday, they went for 77 kobo per share.

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Dipo Olowookere is a journalist based in Nigeria that has passion for reporting business news stories. At his leisure time, he watches football and supports 3SC of Ibadan.

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