By Olalere Ojedokun
This statement is false and is basically based on a lack of understanding of accounting principles and a convenient neglect of denotative dates and notes to the accounts. The story was based on the audited accounts and report for the year ended December 31, 2022. The report was approved on March 20, 2023. De accordance with the general format of the comparative and accrual accounting report, the bank submitted the prestige report for last year, ended December 31, 2021 and the year ended December 31, 2022. The two comparison charts were obviously marked and also seem to have been noticed throughout the tale.
While the 2021 Internal Credit Status Report indexed 8 servicers with an overall notable loan of 25. 827 billion naira, the 2022 benchmark year prestige report updated that 4 servicers had fully paid off their loans, one director had partially paid off their loan while two servicers had partially paid off their loan. He noticed a build-up in his loan against their names. The 2022 prestige report showed a total of 31. 646 billion naira in internal allocations similar to those of the remaining 4 former administrators. The 2022 report obviously indicated that Abimbola Izu, Dotun Adeniyi, Tokunbo Abiru, and Theodora Onwughalu had repaid their loans and as such were not indexed in 2022.
The 2022 report is obviously indicative of the bank’s adjustments and compliance with prudential rules and the Banks and Other Financial Institutions Act (BOFIA).
A former director, with a similar stake in Newcross Exploration and Production, Jason Fadeyi, whose loan of N25. 442 billion in 2021 represented 98. 5% of the total notable loans initiated in 2021, saw his overall notable loan rise to N30. 922 billion million naira. . in 2022, due to accrued and accrued interest due to the currency conversion rate (Forex), since the loan is a loan denominated in a foreign currency (US dollar). It is undeniable that it is coherent to conceive that the exchange rate is a mediating thing. in loans denominated in foreign currency. Closing exchange rates could sometimes be checked on the Central Bank of Nigeria (CBN) online page. The Naira/US Dollar exchange rate was 424. 11 Naira consistent with the US Dollar for the year ending December 31, 2021 and N461. 1 per US Dollar for 2022. It was 400. 33 Naira per US Dollar in 2020 All those pieces represented the year in part. Evolution of the loan over a year. Meanwhile, Newcross Exploration/Fadeyi’s N30. 922 billion accounted for 97. 7 per cent of the total notable loan originations in 2022.
Interestingly, as the article rightly reports, this loan, of 30,922 million naira, has the best guarantee, an obligation on the company’s assets. Another audit indicated that the Newcross Exploration/Fadeyi loan is a syndicated loan through 8 banks with trustees of the NBF as trustee administering the collateral on behalf of all lenders. Jason Fadeyi was subpoenaed for the loan under general insider trading principles that state that circle members, relatives, and affiliates are privileged people. As the article rightly points out, the Corporate Affairs Commission (CAC) records shows that Newcross Exploration and Production was registered on July 9, 2013, with Festus Fadeyi and Bolaji Ogundare being the Americans who had significant control over the company.
The first domestic loans in 2022 report a loan of 535 million naira credited to Mr. Tunde Ayeni, approximately 1. 7% of the total loans. This was rated as “in force. ” Overall, Newcross Exploration/Fadeyi’s secured and syndicated loan and Ayeni’s “current” loan accounted for approximately 99. 4% of the total notable loans initiated in 2022. All these elements were obviously indicated and were evident in the table consulted. through the journalist, but it did not come to fruition due to a misinterpretation and a false impression of the format of the report.
Claim 2: As of December 31, 2022, the general notable loans owed through the former administrators of Polaris Bank, some of which would be repaid, amounted to 57. 473 billion naira.
This statement is false and stems from the first statement, it shows the false impression of the comparative reporting base (going concern). To arrive at his claim of 57. 473 billion naira, the journalist has just added the remarkable general loans initiated in 2021 from N25. . 442 billion to the notable general loans initiated in 2022 of N31. 646 billion. The reporter conveniently ignored the year-end discrepancy and the fact that the two tables, like other segments of the annual reports and accounts, were provided for comparison purposes. The reporter ignored the indicative narrative that it appeared that the Newcross Exploration/Fadeyi loan was the same loan, moving from one reporting year to another reporting year.
Implicitly, this story raised Newcross Exploration/Fadeyi’s loan to 56. 364 billion naira, or 98. 1 percent of its remarkable total claimed amount of 57. 473 billion naira.
This claim is false. The 2022 audited report, on which the story was based, showed that Izu was not indebted to the bank, having settled last year’s prestige report.
Claim 4: Fadeyi borrowed a term loan of N30. 922 billion from the bank, which has been placed on the watch list.
This is false. This is due to an erroneous impression based on comparative information (financial year, going concern). This statement undermined the credibility of the entire story, clearly demonstrating that the journalist had no education or understanding of monetary news/journalism. It also subjects the story to an analysis of reason, as the journalist did not adhere to a trend of errors, but instead zigzagged between erroneous claims to arrive at unsubstantiated claims. For example, although he doubled that of Fadeyi, Hitale kept Oguntayo’s loan of N100 million unchanged during the comparative years, but interestingly, he reported Ekong’s loan at N89 million (notable end of the year 2022) and Nfour million , Nfour million (two loans in 2021). While the 2021 report showed that Ekong owed a total of N108 million (not one hundred million through Demanta, Nfour million, Nfour million), and in 2022, those debts were reduced to 89 million, after clearing the two million naira, four million non-public. loans and cut the related loan from one hundred million naira to Demanta to 89 million naira. An error plan would have simply added Ekong-related loans from N108 million in 2021 to N89 million in 2022 to arrive at a false assumption like Fadeyi’s. The story, a selection of figures, has just reported N89 million and adds the two private loans of four million naira each to Ekong as the final prestige of the reporting year.
Indictment 5: According to Polaris Bank records, Ibiyi Ekong of Demanta Nigeria Limited is a modeling director who borrowed from the bank without repaying them. Ekong, the bank’s chief executive modeler who resigned in 2016, owes the bank 89 million naira. Ekong also owes the bank borrowed 4 million naira in the form of a loan and another 4 million naira in the form of a car loan, which have not been repaid.
This claim is false. As explained above, the journalist incurred a practical variety of figures, due to his poor experience in financial journalism and lack of fidelity, even in his erroneous claims, although his claims based on the year of the report ended on December 31, 2022 were false post-filing events showed that Demanta, which was the only notable Ekong-related domestic credit in 2022, had been paid in February 2023, before the signing and final approval of the account in March 2023. The story: Polaris Bank Loses 26 Billion-Naira Loans Made to 6 Former Unsecured Managers, was first reported via an EconomyPost on October 27, 2023, and republished through an International Research Reporting Centre (ICIR) in Nigeria. As of October 31, 2023, there were obviously other reporting periods for which they may have only requested updates on adjustments after the end of the year.
Claim 6: Theodora Amaka Onwughalu is a former director who borrowed a loan of N19 million from Polaris Bank but was unable to repay it.
This claim is false. The prestige for the 2022 reporting year indicated that Onwughalu was not indebted to the bank. Its total debt of 19 million naira in 2021 was paid off in 2022.
Claim 7: Similarly, Dotun Adeniyi, former head of Polaris Bank, borrowed a loan of 27 million naira from the monetary establishment but was unable to repay it.
The story was sensationally posed “no guarantees” and revolved around this theme along with a variety of characters to paint a picture of unusual, unfavorable or clandestine dealings. In addition to ignoring the fact that 98. 5% of total insider-related credit highlights in 2021 and 97. 7% in the 2022 report had the best collateral, and that 1. 7% of credit prestige of 2022 were “profitable”, a guaranteed total/stage prestige. up to 99. 4% in 2022; Hitale has conveniently ignored global banking practice, and as it also applies in Nigeria, that secured and unsecured loans are not unusual in banks’ loan portfolios. Credit threat assessment and banking regulations allow banks, beyond guarantees, to approve and grant loans to a certain extent (depending on each bank’s internal rules), based on subjective evidence. This is available information and one of the bases of financial journalism courses. Loans, in terms of collateral, are divided into double-secured loans (secured) and unsecured loans (unsecured). Secured loans are so called due to the presence of collateral, a physical asset securing the loan, which the lender has the right to take in the event of default.
The unsecured loan is so named because of the absence of physical assets, but in reality credit risk assessment and credit, it is secured through non-public goodwill and reputation, a subjective case-by-case assessment of a customer’s creditworthiness and loan. amount. . In all cases, the lender has the option of going to court to obtain the “unsecured loan” in the event of default.
In a February 24, 2022, report titled “Here Are the Banks Offering Unsecured Loans,” Business Day (businessday. ng), a leading business and business daily, reported increased demand for “unsecured loans” among Nigerian deposits. – Borrowing Banks (DMB). The newspaper reported that “as the latest data from the Central Bank of Nigeria (CBN) shows, demand for unsecured loans is higher but lower than pre-COVID demand. 19 years old. ” The article cites as many as 8 banks that offer “unsecured loans” to the general public, adding the 4 largest banks in Nigeria. In view of its reputation as an appropriate banking/lending practice, BOFIA has included provisions governing Unsecured Loans.
In addressing domestic lending, BOFIA states that a bank shall not lend “more than five per cent of its paid-up capital to any of its directors or to any of its shareholders, provided that the bank’s overall exposure to all of its managers and shareholders. “shall not exceed 10 per cent of its paid-up capital or such other percentage as the Bank (CBN) may prescribe. “Polaris Bank does not violate any lending principles or legal limits.
CBN prudential rules state that a line of credit is considered delinquent when interest or principal is due and not paid for 90 days or more. The rules state that a loan would possibly be deficient, doubtful, or lost. deficient when the principal or notable interest remains unpaid for more than 90 days but less than 180 days.
A general examination of the hitale subjects the journalist to a “motive investigation,” especially with his convenient infidelity to facts and figures and his multiple “patterns of error. “Was the report blackmail aimed at achieving a predetermined perception of characterization, which would be a professional investigation of the monetary report?Was the component of the story an unpleasant, grant-seeking report through a segment of the media that sought to demonize entities in order to offload funds?It was evident that the journalist had conscientiously “mixed” the facts and provided no basis for highly successful hypotheses and assertions. While the journalist made extensive reference to unrelated activities and existing positions of former administrators, he did not make similar efforts to reach out to affected administrators in a spirit of justice.
“In addition, the facts must be presented accurately. Facts are sacred. When it comes to sources, documents, databases and the Internet, it is not enough to cite the data correctly, but efforts must be made to identify its accuracy. Whenever possible, check your data again and again from other sources.
“CIRI is committed to fairness and accuracy. That’s why, when we make a mistake, we fix it quickly. If the right type is important, we’ll replace it and explain why. Also, if there is a story update, we will provide clarifications. And if the entire report is questionable or doesn’t meet our moral standards, we’ll provide clarifications signed by the editor. “With all of this, it would be fair to expect CIHI to correct its mistake by republishing the misleading history, given the many factual, operational, and textual errors cited above. The story is below average and unseemly in relation to the ideals professed by CIRI.
In conclusion, the story that “Polaris Bank loses 26 billion naira in loans to 6 former directors without collateral” is false and misleading; The bank lost cash due to loans from former directors, as the publication inappropriately claims.
Ojedokun is a freelance journalist and analyst in Lagos.
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