Financial Trust seeks presidential intervention over liquidation of 2 banks

By Emeka Anaeto, Business Editor Financial Trust Group (FT Group) has appealed to President Bola Ahmed Tinubu to intervene in its 30-year dispute with the Nigeria Deposit Insurance Corporation (NDIC) over issues surrounding the accounting for assets realised from the liquidation of Financial Merchant Bank Limited and Republic Bank Limited, as well as the payment of any outstanding liquidation surpluses and dividends due to the estate of its late founder, Otunba Olufemi Ajayi.

Financial Merchant Bank was taken over by the Central Bank of Nigeria (CBN) in January 1994 while Republic Bank was taken over in June 1995 and both institutions were immediately handed over to the NDIC for liquidation. In a statement at the weekend, the Group said it is seeking the immediate release of comprehensive, independently verifiable and audited accounts of the assets realised from the liquidation of the two banks, including details of liabilities settled and any residual funds available for distribution to legally entitled parties.

FT Group noted that Otunba Ajayi had significant interests in both institutions and maintained that a transparent accounting of their liquidation proceeds is necessary to establish whether any outstanding entitlements are due to his estate and other shareholders. The Group, therefore, urged President Tinubu to direct the NDIC to address the matter in accordance with applicable laws, its statutory obligations and the principles of transparency and accountability underpinning the Federal Government’s Renewed Hope agenda.

“Financial Trust Group calls upon the management of the NDIC, under the Renewed Hope agenda of the Federal Government, to uphold transparency, discharge its statutory obligations and ensure the payment of all verified liquidation surpluses and dividends due to the Estate of Late Otunba W.O.O. Ajayi without further delay,” the Group said. The Group estimates that the two banks could be entitled to approximately ₦2 billion from the recoveries and assets realised by the NDIC, subject to proper verification and reconciliation of the relevant accounts.

The Group is calling for a detailed accounting to establish the actual proceeds realised from the liquidation of the two banks, the liabilities settled, the amounts distributed to eligible claimants and any remaining balances legally available for distribution. It maintained that the prolonged absence of what it considers a satisfactory accounting raises questions about regulatory accountability, the protection of shareholders’ rights and the treatment of indigenous entrepreneurs who contributed to the development of Nigeria’s financial services industry.

Citing relevant statutory provisions and NDIC annual reports, FT Group argued that any residual assets remaining after the satisfaction of depositors’ and creditors’ claims should be dealt with in accordance with the applicable legal framework. The Group alleged that repeated efforts to obtain a comprehensive account of the liquidation proceeds have yet to produce a satisfactory resolution, leaving the Ajayi family and associated legacy entities seeking clarity on their potential financial entitlements.

Giving the background to the closure of the two banks, FT Group said its appeal also draws attention to the political and business circumstances surrounding the closure of the two institutions during Nigeria’s military era. It stated that ‘‘Otunba Ajayi was a businessman, pro-democracy advocate and publisher of The Republic newspaper. He openly supported the late Chief Moshood Kashimawo Olawale Abiola’s Hope ’93 presidential campaign’’.

FT Group alleged that the military administrations repeatedly proscribed Ajayi’s publications and adversely affected his business interests, culminating in the revocation of the operating licences of the two banks. The Group further claimed that proposals to rescue or acquire the affected institutions were under consideration around the time of their closure.

It believes that the circumstances surrounding the revocation of the licences and the subsequent administration of the banks’ assets merit renewed scrutiny and transparent documentation. FT Group said the passage of three decades makes it imperative to establish a clear, verifiable record of the liquidation process and determine the status of any funds that may remain available for distribution.

To bring the dispute to a conclusive resolution, FT Group is seeking three specific actions including: Publication of audited accounts, and immediate release of comprehensive, independently verifiable and audited accounts of the assets realised from the liquidation of Financial Merchant Bank Limited and Republic Bank Limited, including liabilities settled and distributions made; A formal and transparent reconciliation process involving the relevant records to establish whether any outstanding liquidation surpluses or dividends are due to the estate of Otunba Ajayi and other legally entitled parties; and payment