The Central Bank of Nigeria must put on hold it’s proposed sale of Polaris Bank, the House of Representatives, has ordered.
The directive came following reports that the Godwin Emefiele- led CBN was trying to sell the bridge bank for a paltry N40 billion.
The apex bank has already spent over N1.2 trillion to revitalize the bank after it transformed from the defunct Skye Bank.
The Polaris Bank has denied report that it has been put up for sale.
Last week, rights activist, Femi Falana, a Senior Advocate of Nigeria, SAN threatened to go to court if the CBN failed to release details of it’s proposed sale of the Innocent C. Ike-led Polaris Bank.
Ruling on the matter on Wednesday, following the adoption of a motion of urgent public importance sponsored by Henry Nwabuba, a lawmaker from Imo, the House of Representatives said the CBN must not go ahead with the sale.
The planned sale of the bank should be put on hold until the CBN, Nigeria Deposit Insurance Corporation, NDIC and the Asset Management Corporation of Nigeria, AMCON, all the required procedures, the Reps said.
Leading the debate, Nwabuba said the CBN should ensure that the transaction is handled transparently.
He said so much has been invested in the bank to build confidence in the banking public after it inherited the assets and liabilities of Skye Bank, adding that the sale must be done in public interest.
According to him, “Given the need to ensure that the divestment in the bank does not jeopardise the core reason for the CBN intervention in the bank in the overall public interest, the divestment should be done most transparently following the required due process.
“This is necessary to avert public outcry and untoward reaction from critical stakeholders in the economy, foreign business partners banking community, depositors, correspondent banks — as it is also crucial to avoid the shortcomings of the previous similar exercise undertaken in the past.
“Polaris Bank is borne out of the bailout of the defunct Skye Bank PIc that failed due to poor corporate governance and non-performing loan for which a whooping sum of close to a trillion naira of public fund was committed to resuscitating the bank.
“The sale of the bank for a purported N40 billion amounts to just about four percent of public funds invested in the bank. The proposed sale is shrouded in secrecy and is opaque and requires that it is done with transparency and accountability to eliminate insinuations of corruption.
“The transited defunct Skye Bank was a systemically important bank with a large pool of employees, customers, and other stakeholders for which the failure of the bank, without a bailout, would have had a serious contagion effect on the economy and global perception/reputation.
“The resuscitation of the entity through the formation of Polaris Bank to acquire the assets and certain liabilities of the defunct Skye Bank was aimed at returning the value that will upset the public fund injected into the bank as capital, protect jobs and continue to contribute to the economic development of Nigeria.
“In addition, the brand equity and public confidence have been enhanced with the relative stability of the bank.”
The CBN had last week assured that the details about the proposed sale will be made public while responding to a letter written to the apex bañk by Falana demanding transparency.
Meanwhile, the House has set up.an ad hoc committee go “review the total outlay by the federal government of Nigeria in Polaris Bank and account for the entire financial input in the bank by the federal government of Nigeria.”
The committee has 21 days to submit its report.
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