CBN Orders First Bank To Recover Loans From Honeywell Flour Mills
The Apex bank in Nigeria on Friday turned down First Bank of Nigeria’s (FBN’s) loan request for Honeywell Flour mills and subsequently directed the bank to recover the loan already granted the company immediately.
The sum of the loan granted the company could not be ascertained but the flour mill is the business enterprise of Mr Oba Otudeko who was sacked alongside some other directors from the board of FBN Holdco on Thursday.
Recall that Dr Adesola Adeduntan was removed on Wednesday by the board of the bank without prior notice of CBN and in return he was reinstated yesterday following the intervention of the apex bank.
Following the dissolution of the company’s board, the share price of FBN Holdings (FBNH) Plc dropped to N6.90 on Friday at the Nigerian Exchange Limited (NGX)
The Nation had report that Honeymill Flour Mills“is required to fully repay its obligations to the bank within 48 hours failing which the CBN will take appropriate regulatory measures against the insider borrower and the bank.”
The apex bank is said to be shocked that “after four years, the bank is yet to perfect its lien on the shares of Mr. Oba Otudeko in FBN Holdco which collaterised the restructured credit facilities for Honeywell Flour Mills contrary to the conditions precedent for the restructuring of the company’s credit facility.”
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Otudeko had used the shares accruing to him in FBN Holdco as collateral for the loan facility extended to his company, Honeywell by First Bank.
If he fails to offset the loan within the next 48 hours issued by CBN, he stands the risk of losing his shareholding in FBN Holdco.
The apex bank is said to be upset with the First Bank for alleged non-compliance “with regulatory directives to divest its interest in Honeywell Flour Mill despite several reminders.”
