$223m NNPC Deposit: Fresh facts about Polaris Bank’s role

Obinna Chima writes on issues surrounding the $223 million lodged in Polaris Bank by the Nigerian National Petroleum Corporation

The most essential ingredient in the relationship between a bank and its customer is trust. That is, all customers expect that their financial institution would do the right thing, day in and day out.

That is why since its creation, the management of Polaris Bank has ensured that its commitment to deliver on its mandate to all stakeholders remains its focus.

That is why the bank has continued to explain its role on issues surrounding the $223 million lodged in it by the Nigerian National Petroleum Corporation’s (NNPC) since 2012.

Fresh fact on the matter are contained in a letter titled: “Re: Invitation to Investigative Hearing in Respect of NNPC Deposit of $223,862,000 with the Bank,” dated June 21, 2021, seen by THISDAY yesterday.

This followed the disclosure by the Acting Managing Director of the bank, Mr. Innocent Ike, while appearing at a public hearing before the House of Representatives ad hoc committee on assessment and status of all recovered loots from 2002-2020 last Thursday.

The letter sent to the chairman of the Ad-Hoc Committee on the Assessment and Status of Recovered loots, Hon. Adejoro Adeogun through the office of the bank’s General Counsel Mr. Segun Tawoju, provided insight into the alleged controversial deposit.

The letter which had 10 annexures copiously provided details and revelations on the issues surrounding the transaction.

The Committee had during the sitting queried why the money had spent seven years with the bank without any action, adding that the bank must have thought the money had been forgotten.

Speaking while grilling the bank CEO, Adeogun had said: “You have about six years when this deposit was in your custody. It is impossible to forget $300 million; were you thinking it has been forgotten?”

He had also accused the bank of exhibiting carelessness when it comes to money deposited by the federal government.

But the financial institution had through the letter seen by THISDAY explained that following the regulatory Intervention of Central Bank of Nigeria’s (CBN) in the defunct Skye bank on July 4, 2016, the new board and management immediately set out to address the various irregularities and shortcomings, chief of which was the inability of the Bank to remit the NNPC deposits which had been in its custody for several years, to the Treasury Single Account (TSA), as directed by the federal government due to liquidity issues.

Ike explained that the said money which was lodged with the bank by the NNPC was at no time hidden from any public or government agencies, noting that the bank interacted and fully co-operated with several agencies including the Economic and Financial Crimes Commission (EFCC), Inspector General of Police Special Investigation Panel, the Department of State Security (DSS), Presidential Panel on Recovery of Public Property, Senate Committee on Banking, House of Representatives Ad-Hoc Committee on Treasury Single Account etc.

He noted that in each case, the bank had satisfactorily explained that it was simply not in a position to remit the money as whole as it has been lent out to various customers by the previous management of the bank.

In the course of the process, he explained that the bank had kept the Central Bank of Nigeria (CBN) abreast of all development on the matter by copying the Governor all correspondences with the various agencies.

“The bank has remained open and transparent about the NNPC account balances in its custody,” he insisted.

Furthermore, the Acting Managing Director explained that part of the strategy adopted in payment of the deposit was to remit it to the CBN and then give the apex bank instruction to credit the NNPC.

He stressed that the money should not be classified as looted fund.

“Permit me to conclude that the money deposited at Skye Bank and Polaris Bank was at no time hidden from any government agency and, therefore, we do not believe that it should be classified as looted funds at all,” Ike added.

Corroborating the process leading to the final payment, the bank in the letter explained: “Sometime in December 2018, the federal government, through the now-disbanded Special Presidential Investigation Panel for the Recovery of Public Property, instituted a suit: Federal Government of Nigeria Versus Polaris Bank Limited (FHC/ABJ/CS/1424/18) against Polaris Bank Limited for the recovery of $223,862,000 belonging to NNPC.

“The Bank instructed the law firm of Falana & Falana Chambers to represent it in the suit. In February 2019, as a demonstration of good faith, the bank made a proposal to commence installment payment of the sum of $10 million monthly into the NNPC TSA account with the CBN, and began doing so immediately.

“Eventually, the federal government being satisfied with the bank’s transparent and diligent conduct in remitting the monthly funds without fail, entered into Terms of Settlement with the bank for the continued monthly remittances of $10 million to the TSA.

“The Terms of Settlement were filed and adopted as consent judgment by the Court on 10th October, 2019, eight months after remittance commenced by the current management (see attached consent judgment as Annex 3)”

Investigations also showed that the initial sum deposited at the time of opening the account in 2012, was about $30 million which grew over time with subsequent deposits amounting to $224,324.958.75 at the point the CBN intervened in the bank in 2016.

Before then however, the troubled account had remained relatively active with payments and withdrawals.

Ike further disclosed in the letter that the interest of the sum kept with the bank since 2012 was dully paid, saying this could be seen from the statement of account submitted to the Committee.

“We are pleased to state that as at today, the total sum of $224,324.958.75 which was the outstanding balance in the account as at February 2019 has been paid while the figure of $32,041,010.83 still reflecting in the account statement is the entry yet to be passed to nil off the balance remitted through cash lodgment (see correspondence with CBN in March 19, 2021 as annex 9)”.

Following queries that the NNPC was yet to confirm the receipt of the money paid into the CBN’s account, Ike stated that they were expecting the NNPC to write and confirm payment, stressing that Polaris Bank had written to the apex bank to that effect Since March 19, 2021.

One of the petitioners, Tosin Ojomo, a lawyer who appeared before the committee, had faulted the submissions of Polaris Bank stating that arrests were made before the bank confessed that the money was truly in its custody to which the Chairman overruled noting the need to stay on the issue before the panel.

The committee in its show of good faith later discharged and acquitted Polaris Bank of allegations and charges in respect of the said NNPC deposit. They however, asked the Bank to furnish the Secretariat with evidence that the Bank has fully repaid the money.

Polaris Bank has achieved significant milestones since its inception in September 21, 2018.

Ike, while comment on the bank’s recently released full year 2020 financial statement, had explained that the financial institution has since grown to earn the confidence of the banking publics, offering quality banking services at the cutting edge of technology.

“2020 was arguably the most challenging year that the world has faced in decades owing to the negative impact of COVID-19 on businesses and the economy. Yet, the current result demonstrates the importance of the deployment of appropriate strategies, technology and effectively validates our recent investment in technology solutions and digitization of our products and processes,” he added.

He explained that the bank’s subsisting three -year corporate transformation strategy has recently been reviewed in line with the changing operating environment and trend dynamism for sustainable value creation. He equally noted the acceleration of the digital transformation journey which is one of the potent strategies to strengthen balance sheet, control cost and process.

The bank’s aspiration is to be known for ease, accessibility of its services and for empowering youths, SMEs, women and the underserved through digital platforms.

Owing to this, Polaris Bank recently unveiled The VULTe, a digital banking platform. As a digital tool, VULTe is a convenient, easy and quick self-service digital solution from Polaris Bank, which allows users (New and Existing) access to range of banking services which includes; open account & wallet (NGN and USD), airtime & data top-up, fund account, funds transfer, bills payment and other banking operations.