By Kelechi Mgboji
Assistant Business Editor
The first fund the Bank of Industry (BOI) managed was the NAC Fund under former President Olusegun Obasanjo. The CTG Fund was inaugurated under President Musa Yar’Adua and the BOI was also appointed to manage it.
President Goodluck Jonathan initiated the Cement Technology Institute of Nigeria (CTIN) Fund of about N9 billion which the Federal Executive Council (FEC) also approved BOI as its manager.
Now, Muhammadu Buhari’s administration has appointed BOI to manage the N140 billion Growth and Empowerment Fund (GEF).
Recently, the CTIN Fund generated furore following a petition to the Economic and Financial Crimes Commission (EFCC) by CTIN Chairman, Aliko Dangote.
What are the issues in dispute over which the EFCC visited the BOI head office in Lagos? What was Dangote’s involvement and how were the issues resolved?
These and more were the crux of an interaction between acting BOI Managing Director and Chief Executive Officer, Waheed Olagunju, and financial journalists in Lagos.
Assistant Business Editor, KELECHI MGBOJI, captures details.
I’m not on the run
It’s very unfortunate that some news report said that I evaded arrest by EFCC. Given my profile, I cannot hide in any place in the world, let alone in Nigeria.
If I board a flight to Heathrow, Nigerians will find me there. In Dubai, they will see my face and pick me out. Even in Beijing, I will be spotted. So it doesn’t make any sense for me to run away.
On Monday, June 20, the Minister of Industry, Trade and Investment, Okechukwu Enelamah, was in Lagos.
Many stakeholders were invited to a stakeholders’ forum on the Nigerian automotive industry titled “Setting an Implementation Agenda for the National Automotive Industry Development Plan (NAIDP)”.
This took place between 12.30pm and 5.30pm at Oriental Hotel, Victoria Island, Lagos. However, it was extended beyond the time schedule.
So I was there up till 7.30pm.
One of the reasons why the BOI was invited is that it manages the NAC Fund. It was the first fund the BOI started managing.
The fund was enunciated in 2003 when Kolade Jamodu was the minister of industry.
The … FEC approved that the BOI should manage the NAC Fund which was levies paid by those vehicle importers.
It was thought that in order to develop the automobile industry towards self-reliance, it needs the BOI to manage the fund and lend to entrepreneurs in the sector. That was how the BOI started lending to entrepreneurs in the automobile industry since 2003.
So the BOI is one of the vital stakeholders in the automobile industry and that was why BOI was invited to the forum. And I had to attend the event.
That was where I was when operatives of the EFCC came to BOI on [June 20]. I did not know why they came. There was no tip off. I am a responsible Nigerian. If am invited, I will honour the invitation.
EFCC invitation to BOI
Last week, we received a letter from the EFCC, stating “Investigation Activities Re: Collection and Remittances of Cement Levy into the Cement Technology Institute of Nigeria (CTIN) Account.”
This letter does not talk about properties or shares. It is clear on the issue as to why the BOI was invited. I was in Abuja last week on national assignment, so I couldn’t go.
I asked some of my colleagues to go to the EFCC, and they went. They were asked to provide documents which they did. And when they were leaving, the leader of the team had to be admitted on bail.
They were there on Thursday and Friday. On Friday, they were asked to go and bring more documents and also tell me to see them on Monday.
I gave directive that they should take those required documents and let them know that I would see them on Tuesday because I had to attend a crucial event on Monday.
The event was very crucial and couldn’t be postponed. As managers of the fund, we had a responsibility to attend. We were given about N18 billion of the NAC Fund to manage.
So I couldn’t have failed to attend the event because I am managing the fund. We manage more than 20 funds and all of them are independently audited on an annual basis.
The automotive policy has generated a lot of debate in the country, and [Enelamah] said let us have a roundtable on the way forward. Coscharis, Toyota, CFAO, VON, all the key stakeholders, were there.
I couldn’t have delegated any other person to represent me. This much I told my colleagues to explain to the EFCC, and that I would unfailingly be there on Tuesday.
We have managed the account since 2010, and if you have been doing a business for six years and you are asked to bring documents covering that period of six years, it will definitely take some time to put together all the documents.
My colleagues explained to the EFCC my whereabouts and I appealed to them to wait, that I would return to the office later in the evening because we had a management meeting that was broken midway to enable us to attend the event.
We were to reconvene the meeting in the evening after we had returned. But the operatives couldn’t wait. They left and dropped a message that I should report on Tuesday.
When I returned from the event at Oriental Hotel, we reconvened our management meeting as planned and were in the meeting until 12.30am on Tuesday. Later that Tuesday morning, I went to EFCC office, and I wrote a statement.
Dangote’s connection to dispute
I wasn’t the managing director in 2010 and I wasn’t a line executive director either when all those transactions took place.
But management is a continuum. The EFCC told me they received a petition from CTIN regarding the fund and they showed me the petition. Dangote is the chairman of CTIN.
I explained to them that we are aware of the petition, and that all the issues had been resolved with Dangote and CTIN.
One of my priorities when I assumed office in February was to look into our partnerships and reaffirm our relationships with our partners within and outside the country.
I was briefed that there were issues regarding the CTIN, and that the CTIN was not happy with BOI. I said that shouldn’t have happened between BOI and Dangote; it was unfortunate anyway.
Dangote is also our partner. We have a N10 billion MSME Fund. We are partners in that fund. So I said to my colleagues that he (Dangote) is a brother, a partner and a friend, let’s go and meet him.
We met Dangote and he explained his grievances to us. He said sometime in 2013, a letter was issued to the BOI to transfer the Cement Fund to the CTIN account with First Bank, and that the BOI didn’t obey the ministerial directive.
And that he tried to get the money transferred to CTIN account but could not effect the transfer for two years. He said that was why he petitioned the Presidency in November last year.
We apologised, and sought the way forward. He said they wanted their money. I tried to let him know that the CTIN does not own any bank, but he replied that they have an account with a commercial bank.
Resolution for BOI to manage N9b fund
Then I said to him (Dangote) that ours is a development finance bank owned by the federal government.
I appealed to him that it’s better for us as a partner to keep the money and manage it for him rather than him taking the money away and keeping it with a privately owned commercial bank.
He asked whether we are sure we could do it. I replied yes, and that we could do it the same way as a commercial bank would.
We agreed on February 20 that the money should be paid to the BOI, and that we would manage it for them on mutually agreed terms.
Dangote said it was okay, and that we should keep the money for the next 90 days.
So we kept the money and managed it for them from February to June, and he said the money we lent to manufacturers, we want them returned to CTIN. I said no problem.
We did book entry and reverted them. So all those loans in our risk assets, the BOI will take over those assets. Then we returned their money to the CTIN account in the BOI.
The principal money it is supposed to bear over time is N9.6 billion, and we agreed to apply a flat rate of 8 per cent interest retroactively. The funds were transferred to the BOI and 8 per cent was applied.
As of December 2015, we had about N12 billion in that account which we had already reported. We managed the N12billion from February to June.
In June, we met Dangote again and told him that the 90 days had elapsed. He said they wanted rate increase, and we promised to get our treasurer shop around for it.
They wanted us to invest the money in the money market. So after shopping around, we reported 9 per cent to him.
In fact, he had travelled to Saudi Arabia for a lesser hajj. I sent him a text message to convey the outcome of our effort, and he replied to convey his acceptance and urged us to go ahead and apply 9 per cent interest rate.
We agreed to do a formal letter conveying the 9 per cent interest rate, with his instruction to the effect that he had accepted.
This was conveyed to us just on Monday morning [June 20] in our management meeting and I told my colleagues that our partnership was waxing stronger as Dangote has asked us to roll over the fund for the next 90 days.
I have gone into this narration to explain to you that the issues between BOI and CTIN had long been resolved since we met Dangote on February 20. But the petition was submitted in November 2015.
When this matter came up again, I called him and reported to him that the EFCC had invited us over the petition by the CTIN. He told me that he was going to let them know that all the issues had been resolved.
Before going to the EFCC’s office, I went to Dangote’s office and he gave me a letter to the EFCC, saying he had settled with the BOI and there are no more issues between CTIN and the BOI. They submitted the letter to the EFCC through his own office but he gave me a copy.
So I went with a copy and showed the EFCC that the matter had been resolved between the BOI and CTIN. But they must still do their job, and they asked me questions and I wrote a statement. It was a cordial and friendly interaction we had.
BOI and its mandate
BOI was set up to help this country, and we have also set out in our own space to build a great country for the present generation and those to come. So there is no rancour, no acrimony between us and CTIN.
We have lost many years of development as a country and right now we are working so hard to do a lot of catching up. Our customers are out there expecting so much from us and we have to support them.
We support them to create jobs. It is only when they create jobs that our people will have improved quality of life and living standards.
For all our interventions, we are not only talking of financial viability, we are also talking about social and economic development. So we are aware and alive to our responsibilities to this country.
We will not do anything to undermine this country. We will continue to do our work professionally and diligently.
EFCC as development partner
We have had a lot of troublesome customers. The EFCC help us pursue them to recover our debts.
The EFCC and BOI are partners because we have a few customers who forged C of Os [certificates of occupancy] and we have handed them over to the EFCC. They have helped to recover monies from those customers.
And when we are going for a meeting with some of our troublesome customers, they (EFCC) give us some of their staff to go with us and negotiate at those meetings.
So they are really our development partners. We have no issues with them at all.
Assessment of BOI by ratings agencies
Each fund owner appoints own auditors. Because we have to disclose those funds in our financial report, we must ensure they are audited. Where fund owners do not have auditors, we appoint Ernst and Young to audit those accounts.
So, we are transparent and we are pursuing our mission to be Africa’s leading world class development finance institution operating with global best practices. We are a very responsible organisation.
We are mindful of our ratings, the standard we set, the confidence and positive perception we have in the minds of the public and our customers.
Fitch rated us AA+; Moody’s rated us BA3; Agusto A+.
For Fitch, we are the second best rated bank in Nigeria, and in terms of ownership structure, we are the best wholly owned Nigerian bank.
We won’t do anything that will tarnish our reputation. We will not do anything that will shake the confidence of our shareholders and development partners.
Confidence is the most important asset of financial institutions, and when you talk of confidence, perception comes in to play.
No country can develop without viable financial institutions that exude a lot of positive perception.
The BOI is the only financial institution that has appetite for investing in the real sector. Other financial institutions shy away.
